Prosperous soul embraces creativity & mortgage neutrality

Tahlullah.H

The views of the hills are absolutely stunning.  They just really place you and ground you.  Something about their size and stillness that helps you re-establish your roots in the world.  Difficult to explain.  Looking at a mountain range always moves me more than looking at the sea!  Enjoy and rest.

Four_Seasons

Oh Tahlullah I quite agree I live by the sea but love the mountains.

savingholmes

Thanks MF, @SuperSecretSquirrel and @powerspowers

I had a nice time around Windermere yesterday - and did around 5500 steps. When I got back - I got sucked into the mortgage overpayments calculator - and the pensions board - looking at how early I could retire / be financially independent - what my likely tax and ni liability on payments would be etc. Loving the visual nature of the Vang'd calculator... So playing the what if game...

I've been looking at my DB scheme rules around buying extra pension. I have a couple of different options if I stick with them as the provider. One is to buy added years directly - the risk though is that if I died young - the kids wouldn't really benefit much from that. It would however be guaranteed income for my lifetime.

Alternatively - I could go down the linked AVC option - and choose later if I wanted to buy added years/pension with it versus use it all as a 25% tax free lump sum. That would seem to offer the best of both worlds - with the main downside being I can't access the AVCs independently of my DB pension like I could if I went with a purely private scheme. (Although I could partially get around that by transferring it out - it would lose some of the benefits of having it in the first place).

I don't think I get a TFLS option with my current DB pension - and the £12 lost pension for £1 lump sum commutation multiplier isn't worth it anyway (for me) - so AVCs would be a way of giving me a lump sum - and of 'guaranteeing' that the whole amount I put in would be tax free - which it wouldn't be on other schemes. However, if I wanted to buy added years as well as or instead of the lump sum from AVCs - that's only an option if I take my pension immediately rather than deferring when I'm ready to leave. 

I assume that my DB pension would be valued at 20 x the annual pension amount for calculation of the 25% purposes but I'm not sure. Need to check into that. I'd also need to consider what the impact would be - if a reduction was applied to my DB pension for taking it early - what that would mean for my AVC pot. Perhaps @mark55man could help otherwise I'll post on the pensions board? Do I add the AVC and DB pot together to work out the 25% value? I assume I do...

As an example - if I was able to pay £300 pcm into it for the next 3 years (age 52-55) - and got tax relief (or increased it to the value if salary sacrifice) - I would have pre growth / losses £13.5K as a tax free lump sum in my AVCs.  Because of the uplift of tax relief that offers much better value than putting the same £ directly into my mortgage. (It's directly inheritable by my kids tax free unless I die after age 75 too). Obviously the longer I left it before retiring - and the more I was able to put in - the bigger the pot should be - barring the impact of market fluctuations.

I'm still working through what that would mean for my downsizing requirements, annual income etc but this is already a long enough post so I will add it before I lose it.

savingholmes

Tahlullah.H said:

The views of the hills are absolutely stunning.  They just really place you and ground you.  Something about their size and stillness that helps you re-establish your roots in the world.  Difficult to explain.  Looking at a mountain range always moves me more than looking at the sea!  Enjoy and rest.

I love the sea - but it can easily become featureless. I love looking at the hills, mountains, valleys - they are sturdier I suppose. I get that they ground you. 

Four_Seasons said:

Oh Tahlullah I quite agree I live by the sea but love the mountains.

I would be happy to live near either. 

My other fave what if game is plugging different areas into RM and seeing the relative prices of housing. I'd have to move if I want to retire early barring any sudden windfall - but there are places I could move to based on today's pricing that would allow me to either be mortgage free or low mortgage in a few years time. I just hope they haven't all disappeared by the time I'm next in a position to seriously look.

I'm also enjoying watching a magpie fly in and out of its nest... Simple pleasures.

Had a light lunch of a (tinned) salmon sandwich with spinach, tomatoes and spring onions. Definitely a feeling blessed day. I may even move off the couch at some point!!

I've been reading the what's my number thread again on the pensions board. If I didn't have a mortgage and wasn't putting extra into my pension - allowing for tax and NI - I think I'd need around £23K p.a. based on costs for my current house etc. If I can find a solution to the mortgage issue - and if I could transfer my older DB deferred pension - then early retirement would be an option. If I could transfer the older DB to a flexi drawdown type scheme - then I could release the 25% TFLS and use that for a few years to help cover the mortgage - while working part time which could give me the best of both worlds. I don't know whether how well I'd cope if I had no structure around my life.

During my second week off while I'm at home - I plan to do lots of decluttering again - to release space in either the garage or the fourth bedroom for art. I can transfer some stuff to DS's old room and hide it in his wardrobe - just haven't done that yet. I still need to let some stuff go &/or sell it too. The shed has been getting clearer. I need to shift the leftover chemicals and try and sell some bits and bobs in there.

doingitanyway

Beautiful photos. I feel relaxed just looking at them. 
Have a wonderful time. Sounds like just what you need.

mark55man

The 20x is how much your DB pension is "valued" at in terms of your Lifetime Allowance (LTA) not to do with your lump sum.  That is dependent on the rules of the scheme - some DBs have a must take cash element and allow extra commutation, others are commutation only. 12:1 is poor unless you really need the money early

but pop a question up on the pensions board and you will get the fuller picture.  Depending on which scheme you are in you have different extra years rules as well, but I understood it was a given that you would always get that money back either via a minimum payout (eg most schemes guarantee 5 years of payments).  That said using AVCs as you suggest is regarded as worthwhile if not ideal and certainly better than 12-1 commutation 

ETA: In terms of AVC and acturial reduction then I am afraid I can't ne sure as I have never looked at AVCs.  As above I suggest you just put a question up and see what happens 

savingholmes

@doingitanyway

Some photos from yesterday

This moss was amazing.

I enjoyed my duvet day today and with views like this who wouldn't?

Thank you @mark55man I think you are right on the five years but it didn't seem to match the cost. Will think of how best to word my question. May try emailing the pension people first. I only have spare £ to invest if I get regrade and preferably PIP as well. Currently just dreaming / scheming

savingholmes

Had a more active day. 7500 steps. 

savingholmes

Had a chippy lunch while I was out - about £6. Parking was £3.50 at the lake and toilets 80p!! Then spent £7 on the way back on groceries - which included £4 of strawberries. Managed to spill half of the strawberries getting out the car - but have washed them off and having as kind of 'tea' with lemon cake slice and artic roll (cheapest ice cream available) with coffee. It's very tasty.

I had thought I would have more spare brain capacity at this point to write my book or even do art - but had very little thinking power for either. I must have been pushing myself too hard for a while and my brain has gone back to saying 'nope - we're on strike!' Best listen. The chairs at the dining table are also really uncomfortable so that hasn't helped.

I'm also still processing my divorce. I came to K'w'ck in the past for a couple of epiphanies - the first because I'd realised I was autistic (2 years prior to diagnosis) and wanted to process and the second while sat in a cafe there I suddenly realised I wanted a divorce. It hadn't even been on my radar as an option before but as soon as I thought it - nothing else would fit. I'm still struggling with guilt - as Ex and DD feel I blew their lives up - where I feel I got mine back. I've been dreaming repeatedly about ex-MIL this week but I think it's because she cut me off - so there wasn't even a goodbye but Ex is still seeing my wider family - so it feels surreal and unfair. It felt quite freeing 'not to have to' go and see ex-MIL but when I pick DD up from her house and she won't even come to the door it feels bizarre.

It's also confronting being away alone - as although I went to a couple of cottages last year without Ex that was for MH reasons and last minute - whereas this is the first week away on my own since the divorce. On top of that - while I've been on short trips to the Lakes with Ex and/or as a family in the past - most of my recent trips to the Lakes over the last few years were spur of the moment - on my own day trips. Since the 'blinders' came off last summer - I've realised that I went on quite a few day trips alone - either because I needed the space or Ex wasn't interested / couldn't get time off that easily. Any trips to see my far flung relatives were without him even if I took the kids. Ex was only ever interested in my parents and the sis and BIL I see most often.

Ah well that was maudlin enough. Practically I've realised that while choosing cottages based on their views is understandable - it might be worth checking whether or not they are down single track roads or not in future - as I find them quite stressful and am a rubbish reverser. I think unless it's summer - I will also give a miss to any on Ec 7 type heating as without the elec  blanket I brought with me I'd be frozen. However that view.... still calls me. I keep turning my head to look at it again. Lovely watching birds nesting in a nearby hedge too.

MovingForwards

Savour the views, let your brain recharge and don't feel like creativity has to flow at this moment, it will return when things are more settled.