Investing in things to reduce outgoings in retirement

cfw1994

A retired pal of mine told me a few years ago to get major house expense items done before stepping away from the monthly wage.  It is very good advice👍

• Already bought into solar back in 2011 - that was an investment that paid back within 7 years and now returns over 2k each year under the FIT scheme.  We are close to getting a home battery too, but for those without either, it is VAT-free to install both together.  The battery thing has got expensive over the past year….but I feel has a similar 5-10yr payback.  Of course you can always try to lower energy costs other ways, and the standing increases have made even battery tech a little less appealing.
• We completed extension works & replacement nice quality windows 5 years before I stopped.  New front door the year before: that all made quite a difference when the wind blows 🌬
• Not a “saving” investment, but we had some landscaping done which increases enjoyment of our garden for us.  Similar to putting in a projector and screen in the lounge film room - an investment in life 🤣
• Gas boiler is about 6 years old, efficient enough for now🤷‍♂️
• Moved from the big people-eater SMax to a Kona EV.  Now 40k miles into that, an utterly brilliant car for us😇

EVs are hellishly expensive to buy - I would say £10k or more than the equivalent ICE, but we do 80% of our miles in it, and when you can “fill up” on cheaper overnight energy, it makes a big difference.  Less useful if you have to charge at public chargepoints - the ‘fuel’ is then only perhaps half as much as petrol/diesel - ours is less than one tenth the cost - we can fill up about 75-100 miles worth overnight for just over a pound 💪

@Scrudgy said:

Saw a very interesting video recently where a company were stripping CO2 out of the atmosphere, and had found a way to chemically bind the carbon with hydrogen obtained from sea water, the resulting hydrocarbon can fuel engines but without the impurities present in crude oil products. The surplus oxygen I am sure can be found a home somewhere.

Who knows, EV and hydrogen vehicles might be a failed experiment if synthetic hydrocarbon fuels with carbon capture schemes are scalable and cost effective.

Anything is possible - technology always moves us forward.  I suspect we are quite a few years from that tech being widely usable & available.   Of course things will improve and change: probably EVs are just a stepping stone, not a destination.  Driving an EV is a very different experience to an ICE car: when we get back in the big Volvo (kept for moving stuff about, tip runs and the long drive to skiing!), it does feel like stepping back in time - the instant power of even our little Kona just feels like driving the future!

In summary: as a ‘strategy’, always invest in your future….invest in furthering yourself and networking while you work, and invest in planning for your future  😎👍

SouthCoastBoy

I'm pretty relaxed about major house expenditure in retirement, if you can't afford it I would argue you are not ready for retirement from a financial perspective 

BPL

pensionpawn said:

BPL said:

pensionpawn said:

In order of savings, for us:
1.Solar panels (£1100 tax free FiT pa with a 25% reduction in electricity bills)
2. ...with a solar divert. (gas boiler switched off May - October)
3. New windows (25% - 33% reduction in energy demand)
4. New gas boiler (next week. 45% reduction in gas usage compared to our 26 year old boiler)
5. Powerwall (next Spring, at present, although it was supposed to be next week. No electrical import March - Oct inc, E7 rate throughout Nov & Feb)

No EV because we don't do the mileage to recover the additional cost, let alone save on an ICE vehicle.

Everyone is different however so go for your 'low hanging fruit'. Good luck.

Did you compare your ROI with just investing in SIPP isa gia?

That's a good point and yes I did. Throwing the cost of my solar installation into my pension would have netted me £2k straight away and then that would grow, along with the original capital I thus didn't spend, over the RoI period (7.5 years) for the solar instal. Now what swung me toward solar were four issues.
1. First, my pension pot was already doing well without the extra investment meaning that besides the TFLS, I would be paying tax on the way out on the extra investment. So the real gain is effectively the 25% TFLS after 7.5 years. Around £4k - £4k5 depending on the rate of growth.
2. Which leads to the second issue, the rate of investment growth is not guaranteed whereas the FiT is guaranteed for 20 (25 for early adoptors) and rises each year in line with the CPI. Those early adoptors are now getting around 60p / kWhrs on around 3500 kWhrs pa. That's around £2k pa tax free, which for them is about 20% each year for 25 years, which means it becomes a tax free cashpoint after 5 years.
3. Point three being that not only is investment growth not guaranteed, I had a sneaking suspicion all those years ago that with the drive (no pun intended) to a greener economy energy prices would rise on the back of not enough generating capacity. Thus the benefits of solar, and I installed a much larger array than most, with consequently a lower FiT (playing the long game), were going to give me a 20 year indexed link "annuity" plus a reduction in bills and plenty of spare Mwhrs for when batteries become fiscally viable.
4. Finally, although not an eco warrior I'll do my bit for the planet when I can, and this felt the right thing to do.

That is a well thought out analysis. So many seperate financial and material investments and don't do the maths on the material stuff. I'm not staying in my current house so can't really make any changes but will be looking to move into a low tech near passive one with solar in an area that has all amenities within walking distance cycle paths railway station. 

pensionpawn

Krakkkers said:

You are saving over 100%, well done.

Lol! Of course this is incrementally and not accumulative. Shall I elaborate...?
1. 25% saving on electricity demand before solar.
2. I was using around 15,000 kWhrs of gas prior to solar. The solar divert brought that down to 14,000 kWhrs. Then two daughters moving out dropping our gas usage to 12,000 kWhrs!
3. After the new windows we now use around 9000 kWhrs October - May (ish). That's around a 25% saving.
4. I estimate that our new condensing gas boiler will bring our gas consumption down by 45% (of 9000) to around 5000 kWhrs.

Does that help? So, besides two of my daughters moving out, solar, solar divert, new windows and a new boiler will have reduced our gas usage by 8000 kWhrs / 53%.

The takeaway from this is that your (adult) kids moving out saves you a fortune for (almost) zero outlay, lol.

Krakkkers

I have 4kwp solar and a diverter which has cut my usage from 11000 gas and 3000 elec to 9000 gas and 1100 elec.
iboost buddy reports 1300kwh of solar generation diverted to hot water.

mjm3346

MallyGirl said:

I have asked our council planning department about their thoughts on solar panels in a conservation area. Nearly 2 months on and I haven't even had an acknowledgement of the query. Apart from wearing more jumpers there is little more we can do in the current house. The cost of changing the sash windows to double glazed versions would take many years to payback and we have no cavities in the walls to fill. We have installed a monitor on the electric usage and been around with a plug in meter checking all the appliances looking for power vampires.

Think yourself lucky if you are not in a listed building as well as being in a conservation zone - any other similar houses in the zone with solar?

woolly_wombat

Installed a 5.7kwp solar system this year, SE facing roof in a sunnier part of the country

Unfortunately the battery has not yet arrived due to supply chain shortages, but hopefully coming soon.

Nontheless it has been a brilliant investment and has enabled us to run portable air conditioning units totally free of charge in 40 degree heat

pensionpawn

woolly_wombat said:

Installed a 5.7kwp solar system this year, SE facing roof in a sunnier part of the country

Unfortunately the battery has not yet arrived due to supply chain shortages, but hopefully coming soon.

Nontheless it has been a brilliant investment and has enabled us to run portable air conditioning units totally free of charge in 40 degree heat

Yes, built it A/C is penciled in for next Easter, which is when the battery is supposed to be available. Had enough of suffering (yes suffering as opposed to being uncomfortable) during unbearably hot summer nights. Of course free to run during the day, and at night on excess solar soaked up by the Powerwall.

pensionpawn

Oh, some additional though smaller details that I forgot to mention. When we updated our kitchen and dining room a number of years ago we changed the gas hob to an induction hob. This was not only to make use of free daytime electricity (not so good in the winter though) but also for safety reasons. We also installed under floor heating in both rooms, needed under stone floors,  (in addition to the ex garage, now study room) which again heats the house for free when it is cold and sunny. If it's cold and dark clouds the gas C/H goes on. We're also about to install UFH in the lounge soon (under carpet this time) which means 90% of the house footprint is covered. UFH is very effective around the equinoxes. 

tigerspill

Scrudgy said:

Saw a very interesting video recently where a company were stripping CO2 out of the atmosphere, and had found a way to chemically bind the carbon with hydrogen obtained from sea water, the resulting hydrocarbon can fuel engines but without the impurities present in crude oil products. The surplus oxygen I am sure can be found a home somewhere.

Who knows, EV and hydrogen vehicles might be a failed experiment if synthetic hydrocarbon fuels with carbon capture schemes are scalable and cost effective.

I agree with this.  Synthetic fuels are already on sale in a small number of UK outlets.  Current price is around £10/L, which isnt bad since it is no where near production volumes.  I think this will kill of TVs within 10 years max.  And they have the HUGE advantage of working with existing vehicles without modification so MUCH better for the environment as the target vehicles will be so much bigger.