44 and dreading the thought of working past 50

Bostonerimus1

SouthCoastBoy said:

Yes university was expensive for me as a parent, estimated cost around 40 to 50k to put 2 through uni

This year Harvard's tuition is $55k and other costs like housing are $22k. So for a 4 year degree that's over $300k per student. Admittedly, most people won't pay the full amount as Harvard is rich enough to give very generous rebates with students from lower income families paying nothing for tuition, but most will pay at least $150k. It's actually more expensive at many other private US colleges that don't have billion dollar endowments and even public/state universities will cost at least $100k for a 4 year degree. This is why I was so dubious when the UK started to charge fees directly to students and families as I expected them to increase and be an impediment to many students.

barnstar2077

Bostonerimus1 said:

SouthCoastBoy said:

Yes university was expensive for me as a parent, estimated cost around 40 to 50k to put 2 through uni

This year Harvard's tuition is $55k and other costs like housing are $22k. So for a 4 year degree that's over $300k per student. Admittedly, most people won't pay the full amount as Harvard is rich enough to give very generous rebates with students from lower income families paying nothing for tuition, but most will pay at least $150k. It's actually more expensive at many other private US colleges that don't have billion dollar endowments and even public/state universities will cost at least $100k for a 4 year degree. This is why I was so dubious when the UK started to charge fees directly to students and families as I expected them to increase and be an impediment to many students.

A cynic might say it was the elite trying to keep old money at the top of the food chain.

Bostonerimus1

barnstar2077 said:

Bostonerimus1 said:

SouthCoastBoy said:

Yes university was expensive for me as a parent, estimated cost around 40 to 50k to put 2 through uni

This year Harvard's tuition is $55k and other costs like housing are $22k. So for a 4 year degree that's over $300k per student. Admittedly, most people won't pay the full amount as Harvard is rich enough to give very generous rebates with students from lower income families paying nothing for tuition, but most will pay at least $150k. It's actually more expensive at many other private US colleges that don't have billion dollar endowments and even public/state universities will cost at least $100k for a 4 year degree. This is why I was so dubious when the UK started to charge fees directly to students and families as I expected them to increase and be an impediment to many students.

A cynic might say it was the elite trying to keep old money at the top of the food chain.

My family certainly could not have afforded to pay today's UK fees and I'll always be grateful for the excellent "free at point of education" university that I went to back in the 1980s because of my exam results without the worry of finances. The imposition of university fees by Blair was part of neo-liberalist philosophy. But rent is probably a bigger issue for today's students than tuition. The saving grace today is the salary threshold and deferral of paying back the loans, you don't get that in the US and many graduates leave with large, long term loan repayments. That's one reason that so many STEM graduates go into financial services where salaries are higher than the engineering and science fields that they actually studied and it's hard to fill jobs for young engineers and scientists from US grads alone

QrizB

Bostonerimus1 said:

barnstar2077 said:

A cynic might say it was the elite trying to keep old money at the top of the food chain.

My family certainly could not have afforded to pay today's UK fees ...

In which case, your family wouldn't have been asked to pay them.

I have a child at university in the UK right now. If my household income was low, my child would receive a loan to cover their fees and maintenance (food, housing, beer) for the duration of the course.

Households with higher incomes are expected to meet some or all of the maintenance costs, and the loan is smaller.

Getting back onto topic, the full maintenance loan is a little less than the full NSP.

Bostonerimus1

QrizB said:

Bostonerimus1 said:

barnstar2077 said:

A cynic might say it was the elite trying to keep old money at the top of the food chain.

My family certainly could not have afforded to pay today's UK fees ...

In which case, your family wouldn't have been asked to pay them.

I have a child at university in the UK right now. If my household income was low, my child would receive a loan to cover their fees and maintenance (food, housing, beer) for the duration of the course.

Households with higher incomes are expected to meet some or all of the maintenance costs, and the loan is smaller.

Getting back onto topic, the full maintenance loan is a little less than the full NSP.

I did mention the "saving grace" of the structure of the loans. Still it's another potential debt load for people to go along with all the other costs that have been transferred to people like DC pensions and general loss of social services. All these add to people's expenses and the OP will have to budget for them and who knows what will happen to healthcare expenses in the future.  With the OP hoping to retire so soon then the costs of the children will be a factor that later retirees won't have to consider. So it's important to leave "wiggle room" in an early retirement plan.

Qyburn

Has it been mentioned that you can't access a pension at 50? Not sure what the age will be for the OP, but over 55. So in today's money he'll need at least 5 years @ 28k = £ 140k of spare cash outside his pension. That's assuming the hobby brings in £12k/pa.

Bostonerimus1

Rental income and dividends and interest from GIA and ISAs are all ways to span the gap between early retirement age and pension age.

Gary1984

Do you contract through your own limited co or an umbrella? Are you making SIPP contributions in the most tax efficient way? Either employer contributions from your ltd co or salary sacrifice through your umbrella.

hartlepool_jono

Gary1984 said:

Do you contract through your own limited co or an umbrella? Are you making SIPP contributions in the most tax efficient way? Either employer contributions from your ltd co or salary sacrifice through your umbrella.

This is something I really need to look more into. I used to do it through my own Ltd Co. However for the last couple years I'm getting a gross rate into my personal account, as working out of the uk. But I'm liable for uk tax. My local country tax is paid by my employer but as a company deduction not a personal contribution... difficult to explain but basically I'm liable for the full uk tax on earnings. Meaning I'm in higher tax bracket for a good chunk. However I still need to clarify what impact on the tax liability will a personal pension contribution have..... if any. And if none what benefit it will be for me to pay into... the sipp is something I feel I'm not utilising at all  

Gavin83

Albermarle said:

hartlepool_jono said:

Yes downsizing would definately be a plan. Maybe to release circa 250k. Sipp I could probably get up to 400k in next 6 years if similar work case than the last few. Isas I plan to max out each year going forward atleast for 1 of us if not both. 

Downsizing often does not realise the gains expected.
The main issue is that when searching for a new much cheaper property, you will probably think they are too small, or not a nice location. So your aspirations rise and you almost inevitably start looking at better more expensive  properties/locations. Especially as you might well be living there for the rest of your life.

Like a lot of things it depends. Most people don't need such a big house in retirement. Once the kids have flown the nest the amount of space required shrinks and losing a few bedrooms from your house, along with the extra space will free up some money.

The other option is to move somewhere cheaper but that'll depend on where you are. We live in a relatively expensive area in the South East. Upon retirement, if we were to move to somewhere up north we could probably get a similar sized house in a similarly nice area and pocket at least £100k, likely a lot more. Obviously the feasibility of this will vary between people though. If you already live in the cheap area then there isn't really much scope. In some respects we're quite lucky in that friends and family are scattered across the country and we could move almost anywhere and still know someone nearby. The downside is having to visit them all!

SouthCoastBoy said:

Yes university was expensive for me as a parent, estimated cost around 40 to 50k to put 2 through uni

Of course this is optional though. You don't have to pay to put your kids through uni. In fact out of everyone I know who went to uni I don't know of a single case where the parents paid for it all. Most people got loans, although several of them are still paying it off.