An average mid-life assessment (2024)
Discussion
Hi all, I’m documenting my current position so I can refer back in future, and because often the feedback and discussion provides valuable insight.
43, +partner, +2 kids in primary school
£450-500k house, c.48% LTV at 1.3% for 2.5 more years
£54k notional salary, £5k discretionary bonus
£10.4k salary sacrifice into workplace pension
£1.6k employer contribution
Current pot £35k
Previous employer DC pot £102k
Previous employer DB paying £3k/year or option to transfer out £55k elsewhere
(Fees unknown)
Expected retirement age 66
Partner salary from part-time job £20k
No debts beyond mortgage
Savings £15-£20k
In the last couple of years we’ve spent over £100k renovating our forever home, going back to brick and installing new kitchen, bathrooms, windows & doors, and full heating system etc, so hopefully no big bills on the house front for a while to come.
On average over the course of a year we tend to spend what we earn, so savings remain fairly static, however, we’re a 3-car family and the 17 year old Ford is approaching the end of its life so that will need replacing.
My biggest concern is that savings aren’t as buoyant as they could be, however, pension contributions could be adjusted/sacrificed if needed.
We don’t have a luxurious lifestyle, far from it, but we are very happy.
Cheers, Eamonnn
43, +partner, +2 kids in primary school
£450-500k house, c.48% LTV at 1.3% for 2.5 more years
£54k notional salary, £5k discretionary bonus
£10.4k salary sacrifice into workplace pension
£1.6k employer contribution
Current pot £35k
Previous employer DC pot £102k
Previous employer DB paying £3k/year or option to transfer out £55k elsewhere
(Fees unknown)
Expected retirement age 66
Partner salary from part-time job £20k
No debts beyond mortgage
Savings £15-£20k
In the last couple of years we’ve spent over £100k renovating our forever home, going back to brick and installing new kitchen, bathrooms, windows & doors, and full heating system etc, so hopefully no big bills on the house front for a while to come.
On average over the course of a year we tend to spend what we earn, so savings remain fairly static, however, we’re a 3-car family and the 17 year old Ford is approaching the end of its life so that will need replacing.
My biggest concern is that savings aren’t as buoyant as they could be, however, pension contributions could be adjusted/sacrificed if needed.
We don’t have a luxurious lifestyle, far from it, but we are very happy.
Cheers, Eamonnn
OP, you are brave putting your life in numbers on a forum full of powerfully built company directors :-) Clearly there will be many people on here in much more affluent positions, but also many in similar and much more difficult positions.
I think one of the most important points you have stated is that you are happy - that isn’t always easy to come by.
Your numbers also show you have made some good choices and are trying to put money away for the future, mainly through pensions.
The car will be an interesting one as you probably won’t want to deplete your savings to replace, but also probably don’t want to sign up to PCP with the rates at the moment. Best hang onto it until it’s beyond repair.
One other consideration - are you saving anything for the children’s future? Our two (now 18 and 15) were started with the government £250 child trust fund and we paid a monthly amount until 18 (still paying for the 15 year old). She received the best part of £37,000 on her 18th and immediately looked to invest that for the future (she is quite level headed). She could use this to put towards university, or a house deposit come the time. Either way, it means we have given her a good start without having to find lump sums to help out.
I think one of the most important points you have stated is that you are happy - that isn’t always easy to come by.
Your numbers also show you have made some good choices and are trying to put money away for the future, mainly through pensions.
The car will be an interesting one as you probably won’t want to deplete your savings to replace, but also probably don’t want to sign up to PCP with the rates at the moment. Best hang onto it until it’s beyond repair.
One other consideration - are you saving anything for the children’s future? Our two (now 18 and 15) were started with the government £250 child trust fund and we paid a monthly amount until 18 (still paying for the 15 year old). She received the best part of £37,000 on her 18th and immediately looked to invest that for the future (she is quite level headed). She could use this to put towards university, or a house deposit come the time. Either way, it means we have given her a good start without having to find lump sums to help out.
CantDecide said:
OP, you are brave putting your life in numbers on a forum full of powerfully built company directors :-) Clearly there will be many people on here in much more affluent positions, but also many in similar and much more difficult positions.
I think one of the most important points you have stated is that you are happy - that isn’t always easy to come by.
Your numbers also show you have made some good choices and are trying to put money away for the future, mainly through pensions.
The car will be an interesting one as you probably won’t want to deplete your savings to replace, but also probably don’t want to sign up to PCP with the rates at the moment. Best hang onto it until it’s beyond repair.
One other consideration - are you saving anything for the children’s future? Our two (now 18 and 15) were started with the government £250 child trust fund and we paid a monthly amount until 18 (still paying for the 15 year old). She received the best part of £37,000 on her 18th and immediately looked to invest that for the future (she is quite level headed). She could use this to put towards university, or a house deposit come the time. Either way, it means we have given her a good start without having to find lump sums to help out.
Of course it is personal choice but I always think those that receive a large ammount of money at 18 there should be a caveat that 90% of it is used for a house or investment etc. If they want to do a round the world hoilday then have to pay for it themselves to learn the value of money. I think one of the most important points you have stated is that you are happy - that isn’t always easy to come by.
Your numbers also show you have made some good choices and are trying to put money away for the future, mainly through pensions.
The car will be an interesting one as you probably won’t want to deplete your savings to replace, but also probably don’t want to sign up to PCP with the rates at the moment. Best hang onto it until it’s beyond repair.
One other consideration - are you saving anything for the children’s future? Our two (now 18 and 15) were started with the government £250 child trust fund and we paid a monthly amount until 18 (still paying for the 15 year old). She received the best part of £37,000 on her 18th and immediately looked to invest that for the future (she is quite level headed). She could use this to put towards university, or a house deposit come the time. Either way, it means we have given her a good start without having to find lump sums to help out.
"On average over the course of a year we tend to spend what we earn"
my wife and I bumbled through working life, enjoying all that we could - without a plan, nor a care really towards later life. Meals, takeaways, friviolous stuff - as long as there was enough coming in to pay for things we bought/enjoyed them.
It's only latterly as i wind down work that the silliness of my past actions strike home. I guess that at the time, not having a takeaway and putting that money aside ( or whatever else it was) didn't register - as the sums would have seemed small and of no consequence.
All i'd say is be aware to the nth degree of compounding -, at the end of each month a £100 or £200 not spent doesn't seem a lot, but roll that forward over 'x' mths/years and it snowballs. Can't remember if you said you have ISA's?
If not, why not set yourself a target, that doesn't cut into enjoyment now' too much to be an issue and save regularly into a flexible ISA......
With those atleast your funds could be withdrawn without penalthy ( ie/ you could take out all that's in there and put that towards a car and as long as you put up to the same amount back in that year, it retains its tax wrapper).
I used to joke about keeping a spreadsheet for money saved on insurance renewals/haggling with SKY etc and that i ought to dump that money into a pot - well i kind of did, it was the 'pot' behind the bar in the pub.....
my wife and I bumbled through working life, enjoying all that we could - without a plan, nor a care really towards later life. Meals, takeaways, friviolous stuff - as long as there was enough coming in to pay for things we bought/enjoyed them.
It's only latterly as i wind down work that the silliness of my past actions strike home. I guess that at the time, not having a takeaway and putting that money aside ( or whatever else it was) didn't register - as the sums would have seemed small and of no consequence.
All i'd say is be aware to the nth degree of compounding -, at the end of each month a £100 or £200 not spent doesn't seem a lot, but roll that forward over 'x' mths/years and it snowballs. Can't remember if you said you have ISA's?
If not, why not set yourself a target, that doesn't cut into enjoyment now' too much to be an issue and save regularly into a flexible ISA......
With those atleast your funds could be withdrawn without penalthy ( ie/ you could take out all that's in there and put that towards a car and as long as you put up to the same amount back in that year, it retains its tax wrapper).
I used to joke about keeping a spreadsheet for money saved on insurance renewals/haggling with SKY etc and that i ought to dump that money into a pot - well i kind of did, it was the 'pot' behind the bar in the pub.....
CantDecide said:
OP, you are brave putting your life in numbers on a forum full of powerfully built company directors :-) Clearly there will be many people on here in much more affluent positions, but also many in similar and much more difficult positions.
I think one of the most important points you have stated is that you are happy - that isn’t always easy to come by.
Your numbers also show you have made some good choices and are trying to put money away for the future, mainly through pensions.
The car will be an interesting one as you probably won’t want to deplete your savings to replace, but also probably don’t want to sign up to PCP with the rates at the moment. Best hang onto it until it’s beyond repair.
One other consideration - are you saving anything for the children’s future? Our two (now 18 and 15) were started with the government £250 child trust fund and we paid a monthly amount until 18 (still paying for the 15 year old). She received the best part of £37,000 on her 18th and immediately looked to invest that for the future (she is quite level headed). She could use this to put towards university, or a house deposit come the time. Either way, it means we have given her a good start without having to find lump sums to help out.
Sorry to be nosey. What kind of money were you putting away each month. That's a staggering amount to have saved even with a good 5-7% interest . I think one of the most important points you have stated is that you are happy - that isn’t always easy to come by.
Your numbers also show you have made some good choices and are trying to put money away for the future, mainly through pensions.
The car will be an interesting one as you probably won’t want to deplete your savings to replace, but also probably don’t want to sign up to PCP with the rates at the moment. Best hang onto it until it’s beyond repair.
One other consideration - are you saving anything for the children’s future? Our two (now 18 and 15) were started with the government £250 child trust fund and we paid a monthly amount until 18 (still paying for the 15 year old). She received the best part of £37,000 on her 18th and immediately looked to invest that for the future (she is quite level headed). She could use this to put towards university, or a house deposit come the time. Either way, it means we have given her a good start without having to find lump sums to help out.
If nothing else, well done. That's a kickstart in life that could be life-changing if used wisely. Let's face it, even if it's not used wisely, it's a life affirming good time!
rufusgti said:
Sorry to be nosey. What kind of money were you putting away each month. That's a staggering amount to have saved even with a good 5-7% interest .
If nothing else, well done. That's a kickstart in life that could be life-changing if used wisely. Let's face it, even if it's not used wisely, it's a life affirming good time!
It isn’t probably all that much. £250 starting balance with £80 ish a month at 7% growth. If nothing else, well done. That's a kickstart in life that could be life-changing if used wisely. Let's face it, even if it's not used wisely, it's a life affirming good time!
Looks like you’re doing well both financially and personally, congratulations.
On this and some other finance forums the sample set of contributors is often skewed towards the more informed and well-off.
A sizeable amount of the population carries debt and has an insufficient rainy day savings fund, and is paying little or no attention to pensions, so you’re doing well.
The mortgage LTV is healthy, the favourable rate locked in and you’re set with the renovations, painful as it is to see the savings balance depleted.
You mention scaling back pension contributions, but (aside from the obvious reason not to), bear in mind that with projected income of circa £59k and pension deductions of just over £10k, contributing less may see your take home pay increase but (unless you reduce tax burden elsewhere also) it will be curtailed by being at the 40% income tax rate, and you’ll take another hit on current Child Benefit (not to mention the slight hassle of a tax return required in your future).
If you have the option of paying the entirety of your notional (presumably not guaranteed) bonus into your pension (and can afford to do so), then you could reduce pension contribution on your guaranteed salary to just under £50k net to take advantage of extra monthly income at the 20% tax rate, leaving you free to dump the £5k pension wholly into your pension if earned, and if not earned then you stay in the 20% tax band.
That said, I do think a pension contribution is best kept high if possible. Like me, also predominantly DC pension, I take comfort that if I pop my clogs early the DC pot goes to my dependents when they need it most, so it feels like a near-future benefit as much as a longer-term one.
If you can survive as a two car household or trim expenditure a little, that savings pot will also rattle upwards again.
All in all, well done.
On this and some other finance forums the sample set of contributors is often skewed towards the more informed and well-off.
A sizeable amount of the population carries debt and has an insufficient rainy day savings fund, and is paying little or no attention to pensions, so you’re doing well.
The mortgage LTV is healthy, the favourable rate locked in and you’re set with the renovations, painful as it is to see the savings balance depleted.
You mention scaling back pension contributions, but (aside from the obvious reason not to), bear in mind that with projected income of circa £59k and pension deductions of just over £10k, contributing less may see your take home pay increase but (unless you reduce tax burden elsewhere also) it will be curtailed by being at the 40% income tax rate, and you’ll take another hit on current Child Benefit (not to mention the slight hassle of a tax return required in your future).
If you have the option of paying the entirety of your notional (presumably not guaranteed) bonus into your pension (and can afford to do so), then you could reduce pension contribution on your guaranteed salary to just under £50k net to take advantage of extra monthly income at the 20% tax rate, leaving you free to dump the £5k pension wholly into your pension if earned, and if not earned then you stay in the 20% tax band.
That said, I do think a pension contribution is best kept high if possible. Like me, also predominantly DC pension, I take comfort that if I pop my clogs early the DC pot goes to my dependents when they need it most, so it feels like a near-future benefit as much as a longer-term one.
If you can survive as a two car household or trim expenditure a little, that savings pot will also rattle upwards again.
All in all, well done.
rufusgti said:
Sorry to be nosey. What kind of money were you putting away each month. That's a staggering amount to have saved even with a good 5-7% interest .
If nothing else, well done. That's a kickstart in life that could be life-changing if used wisely. Let's face it, even if it's not used wisely, it's a life affirming good time!
I make it about £200 a month, with an average of 5% growth compounded over 18 years. Very nice little nest egg for the youngster, and a reminder of the power of compound interest!If nothing else, well done. That's a kickstart in life that could be life-changing if used wisely. Let's face it, even if it's not used wisely, it's a life affirming good time!
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