Life Plans-Pensions, Work and Health issues

Luckybonus

Hello, 
           I have never posted before and just wondered if anyone can be give me advice re: Pensions, Work and Health issues. 

These are my circumtances: 
-I had quite a difficult upbringing due to trauma and have had physical and mental health issues from age 17. I had Saturday/holiday jobs from age 14, but from 17 things were very bad. 

-I was very unwell from 17-19 and then left home. I was too poorly to undertake my University Course, so didn't work again until I was 23 in a part time job. From age 20, I did the Open University and eventually got my degree at age 24. I built up with CV with doing voluntary work and a Workplacement in this time. 

I was always taught to have savings and not undertake credit which I have stuck to (bar taking a mortgage). 

I got a Council flat at age 21 and started working full time by age 24.  (By the aged of nearly 27, I was able to put down a deposit to buy it. My goal was to own it. I paid off the mortgage by age 34 ( I was very dedicated to paying off he mortgage as I wanted to own it and was quite strict with my spending, although I did have some times out with friends and a couple of holidays). 

I did ease my attitudes to money slightly, letting myself spend a bit more on clothes/not the budget makeup, but the slighty costlier Brand Maxfactor etc but looking to get it cheaper on Vinted, ebay etc, rather than on the high street. 

I have continued saving. My goal is to buy a 2 bed/3 bed Bungalow with a little garden. I am aged 42 now and am single. I have been through a lot of trauma and I can't imagine ever having a relationship, although one day I like to think I will. I have given up the idea of becoming a Mother, it simply won't happen now. 

Age 35 I had a real bad spell for 3 years with an undiagnosed condition that took 29 months to diagnose and then had major surgery. I had nearly five months off work and then was on a phased return and within 6 weeks was back to work full time. In hindsight it wasn't the best decision, I have found the last 6 years of my life extremely difficult with surgeon's telling me they thought I had developed these physical problems due to early complex trauma.

Part of me feels because of my health issues/background it would be much more beneficial for my wellbeing to work part time 3 or 3.5 days a week of even 4. I am sorry if this sounds harsh, but I know Friends on benefits with far less physical issues than me and there are on stable meds for mental health, but they seem to have a better quality of life than I do, going on holidays, to clubs etc and groups etc and i am sure they think I am boring. Working full time can be exhausting when you have health conditions. 

Anyway I would like to buy a 2/3 bed Bungalow within the next few years. I have major works charges to pay on my leasehold flat of £20K approx at the end of Sept 2025. I have an offer to from the Council to buy my flat back for £240K, so minus the 20K, this is around £220K left. 

In 2016, I started investing in a SIPP (in 2 funds) and my balance is around £7K. (Invested with Hargreaves Lansdown), part of my thinks about transferring it to Vanguard, however I have not looked into the practical detail of how I do this. I think Vanguard's charges are lower. I stopped paying into it when the cost of living went up. 

I now have around £147K in total in savings (minus perhaps I would like to keep of around £23K in savings if I bought a property) and say £10K for savings like car, holidays, xmas, boiler repairs etc, misc repairs etc at the moment i estimate I have around £124K I could put towards a property. 

I have been looking on Rightmove for a couple of years re: prices and areas. Could get something nice and within Budget, but only one route in and out, bus route good, but delays when by car. not sure I want to live there and feel I want to move a little further afield 10 miles+  new area for me etc, just a bit of a change rather than in the town I grew up and experienced the trauma in.

My theory is that if I got into a Bungalow in a different area and didn't have too much of a mortgage say £25K or £30K, or if I was in the lucky position of being able to buy outright, in time I could reduce my working hours which would benefit my general wellbeing and to have more time for me eg swimming/hobbies which I don't get a lot of chance of doing right now. Maybe one time going out at the weekend and a couple of things, but I could do with expanding my social networks, just more me time. 

I realise I am in an incredibly fortunate position compared to most and have definitely been lucky getting a Councl flat, however if you heard my story it is heartbreaking and I very nearly did not make it eg, to stay alive. 

Work have been giving me details of paying shared cost AVC's recently, they said it is better than paying into a SIPP, due to salary sacrifice and reduced NI and Tax benefits, it is more advantegous and you say retire earlier. I can't imagine working till 68 and the Pension age could be higher by the time I get there. They have more or less said if pay in £70 a month by retirement age I could have an extra pension of £28K i could take tax free, this could last maybe 2-3 years at most meaning still retiring at 65 or by the time the age rules change, it could still be 67 or 68. 

My question: 

-I am realistic, with the trauma and health problems I have I may not even reach age 60 or 68. Should I just plan to move to Bungalow as and when and reduce my work hours when I can and hopefully have a better quality and happier quality of life for a while?

-Should I put the £70 a month into the AVC or start it will a smaller amount £20 or £30 a month so it is something rather than nothing?

-I do still want to continue to work as  I enjoy it, but a bit more of a balance and time for myself would be nice. 

I have lived in this flat for 21 years. I feel like a change of area would be nice. I would love a little bungalow with a little garden in particular and with easy access parking/or a garage. 

I am sorry this has been a very long post, but I would be most grateful for any other's person's view on my situation and any advice or tips. Thankyou, Very Best Wishes to you all

Vitor

You’re in a strong position financially, so I’d focus on what will give you the best quality of life now, not just theoretically in 25 years’ time.

Move: Selling to the council, clearing the £20k charge, and buying a bungalow in a nicer area (ideally mortgage-free) would free you from big housing costs and give you a fresh start.

Hours: If full-time work is wearing you down, plan to cut to 3–4 days once you’ve moved. Test the budget first by living on the reduced income for a few months while still full-time.

Pension: AVCs are tax-efficient but lock the money away. A small monthly amount (£20–£30) keeps the benefit without tying up too much.

Bottom line: prioritise the home and work pattern that let you live well now. You can’t buy back lost time later.

Brie

Getting a good work/life balance is tricky.  Add in health issues and it's even trickier.

About the health issues....are they the sort of thing that means you might qualify for PIP?  Just a thought if you're not already getting this as it might make life easier for you sooner rather than later.  

And moving - sounds like you need to move a bit.  Would the extra 10 miles put you out of reach to friends?  Or facilities that help you manage your health?

And if you have the ££ available topping up the work pension with AVCs is a good option.  It takes less time, less head space, less worry, possibly lower fees than a personal pension and yes you do benefit with the lower NI & tax.  Do a full budget, if you haven't already, so you can see what your real excess ££ is per month and then maybe put a little less than that into the AVCs and the balance into an emergency fund.  There's a template for a statement of accounts (SOA) in my signature below - it contains all the obvious bits required in a budget.  If you fill it out and post it on the debtfree board people will be able to help you polish it up if you like.

And working is good.  I've just retired at 67 and know I need to find set things to do each week else I'll just sit and turn into a blob.  Having a schedule and the freedom to do other stuff is great.  

Luckybonus

Hi Victor, 
                Thankyou so much for your really helpful feedback, I really appreciate this. Sometimes it is difficult to know what you do eg, priortise the here and now over the future, but feel my health has not been in the best shape from a young-ish age and therefore important to have quality of life now. 

Thankyou so much for your kind and thoughtful reply, I really appreciate it. 

My Best Wishes to you and your future. 

Luckybonus

Hi Brie, 
               Thankyou so much for your reply, I really appreciate your kind reply, thankyou so much. I am getting PIP at the moment, but I don't know when that may change due to all the changes in the rules coming in. I try hard, with work, but I defiintely  have complications from my health conditions and due to the surgery I have had. I have been offered another operation  on my bladder (may cure things 50 per cent but not 100 per cent), however I need to loose weight before they offer me the op and they have said it won't fully cure the problem. I spend a lot continence pads. I don't know if I will continue to meet the criteria to claim pip, all i can say is in 7 years these physical problems and surgery have 'completely floored me', mentally and physically and have ongoing impacts. I have not recovered in any sense of the word since May 2019. It has bee deeply traumatic. 

I want to continue working, but I would say I find it a challenge and I give it my all. I know I might not be popular saying this, but I think it was a shame when the govt stopped working tax credits in particular for people with disabilities, as it at least acknowledged people's disdavantage due to their health earning an income and gave some disspensation, whereas you apply for UC and ifhave  savings over a certain amount say 16K, your entitllement to anything is £0, whereas you may be looking to advance your career and earn a higher income (through years of study), but you are treated the same as someone who may be younger and coming to into the system first time. 

I know life isn't perfect and never will be, there are so many variables. I really am grateful for your kind and thougtful reply: All good wishes to you x

draiggoch

Do you work for local government by any chance?

Luckybonus

Hello there, 
                    Yes I do.

Best Wishes

draiggoch

Luckybonus said:

Hello there, 
                    Yes I do.

Best Wishes

The reason I was asking is that the pension scheme AVC is more beneficial than most AVCs as you can take it out as a tax free lump sum subject to certain limits.
from my understanding though it has to be taken at the same time as the main pension if you want it tax free.
personally I use the AVC as well as an amount in to my SIPP to allow me to leave work a bit earlier than 67/68.

Luckybonus

Hi There, 
                 Thanks so much for your message, I really appreciate it. Yes I have been told it is Shared Cost AVG via salary sacrifice and there are both tax and NI savings to be had and all the money can be taken out of it from age 57, which seems good. Maybe I should start one, my dilema is how much to put in one, as primarily want to save to move properties, but I recognise saving for retirement is important and to allow time for growth between now and then. 

Thanks so much for your guidance, have a good day:)

SarahB16

Luckybonus said:

Hi There, 
                 Thanks so much for your message, I really appreciate it. Yes I have been told it is Shared Cost AVG via salary sacrifice and there are both tax and NI savings to be had and all the money can be taken out of it from age 57, which seems good. Maybe I should start one, my dilema is how much to put in one, as primarily want to save to move properties, but I recognise saving for retirement is important and to allow time for growth between now and then. 

Thanks so much for your guidance, have a good day:)

If your priority is to move and you need to save to be able to do that then in my opinion that should be your priority.  However, with one exception.  I'm not sure after your pension contributions if you are a higher rate tax payer.  If you are then I would suggest you make AVC contributions to bring you down to paying 20% tax.  If you're not then it doesn't matter and I would suggest saving and move properties (as that will make you happier). 

Then when you have moved definitely take advantage of making AVC contributions.  

Regarding taking AVCs at age 57 well yes you could but that would also mean you would be taking your LGPS DB pension at the same time and that would come with a large actuarial reduction if you did that.   

I don't want you to think you can take the AVC pot at age 57 but not the LGPS DB pension.  

Some people prefer to take the LGPS DB pension at say age 62 to 65 so with some actuarial reduction and may use a DC pension pot to fund the years from retiring to taking their LGPS pension.  

A lot to consider, I know...