Advice 70k savings living in HMO @35
Discussion
Currently living in HMO house share have no debt
Have 65k in savings account chase and currently at 5k in premium bonds. Last 6 months only £25. works out about 100ish a year no big prizes.
Present salary around 40-45k varies panel beater. Pensions standard min contributions have about 15k pot. Now pensions. Looks like they lose money each year rather than make the pot increase.
Get about 220 p/m from savings account not in any ISA, worried by PAYE take home will change next year.
@35 only 70k savings is pretty piss poor but is what it is, wouldn't even buy a flat. But do have my T5 camper.
Jobs in Europe as LTD paid weekly but with just British passport max 3 months out of 6. Tempted then 3 months in UK as LTD Then repeat. Have zero idea how this works in setting up as agency say i have to do this myself and they offer no financial advice.
Feel as if treading water at present just existing with no plan.
Have 65k in savings account chase and currently at 5k in premium bonds. Last 6 months only £25. works out about 100ish a year no big prizes.
Present salary around 40-45k varies panel beater. Pensions standard min contributions have about 15k pot. Now pensions. Looks like they lose money each year rather than make the pot increase.
Get about 220 p/m from savings account not in any ISA, worried by PAYE take home will change next year.
@35 only 70k savings is pretty piss poor but is what it is, wouldn't even buy a flat. But do have my T5 camper.
Jobs in Europe as LTD paid weekly but with just British passport max 3 months out of 6. Tempted then 3 months in UK as LTD Then repeat. Have zero idea how this works in setting up as agency say i have to do this myself and they offer no financial advice.
Feel as if treading water at present just existing with no plan.
In most parts of the UK North and West of say Oxford, there are plenty of 3 or 4 bed properties you could buy with a mortgage. You could rent out one or 2 rooms tax free (there's a hMrc limit before you start to be liable)
That would fund the additional.bills you are suddenly responsible for.
Have you got a help to buy ISA ? Free money from.the government.
You need to put a bit more away in pension, in my opinion as someone who didn't put enough in 20 years ago.
What do you want from life ? £45k is a good salary for most of the UK, so you are in a healthy place.
That would fund the additional.bills you are suddenly responsible for.
Have you got a help to buy ISA ? Free money from.the government.
You need to put a bit more away in pension, in my opinion as someone who didn't put enough in 20 years ago.
What do you want from life ? £45k is a good salary for most of the UK, so you are in a healthy place.
robyorkshire said:
Currently living in HMO house share have no debt
Have 65k in savings account chase and currently at 5k in premium bonds. Last 6 months only £25. works out about 100ish a year no big prizes.
Present salary around 40-45k varies panel beater. Pensions standard min contributions have about 15k pot. Now pensions. Looks like they lose money each year rather than make the pot increase.
Get about 220 p/m from savings account not in any ISA, worried by PAYE take home will change next year.
@35 only 70k savings is pretty piss poor but is what it is, wouldn't even buy a flat. But do have my T5 camper.
Jobs in Europe as LTD paid weekly but with just British passport max 3 months out of 6. Tempted then 3 months in UK as LTD Then repeat. Have zero idea how this works in setting up as agency say i have to do this myself and they offer no financial advice.
Feel as if treading water at present just existing with no plan.
Seems OK to me. You have options and time to do them.Have 65k in savings account chase and currently at 5k in premium bonds. Last 6 months only £25. works out about 100ish a year no big prizes.
Present salary around 40-45k varies panel beater. Pensions standard min contributions have about 15k pot. Now pensions. Looks like they lose money each year rather than make the pot increase.
Get about 220 p/m from savings account not in any ISA, worried by PAYE take home will change next year.
@35 only 70k savings is pretty piss poor but is what it is, wouldn't even buy a flat. But do have my T5 camper.
Jobs in Europe as LTD paid weekly but with just British passport max 3 months out of 6. Tempted then 3 months in UK as LTD Then repeat. Have zero idea how this works in setting up as agency say i have to do this myself and they offer no financial advice.
Feel as if treading water at present just existing with no plan.
At 35, what is it that you want to do? - Without knowing much more, I'd be thinking that you could look to take the 70K as a deposit on a house, get a 2/3 bed place, and rent out 1/2 of the rooms instead of living in the HMO.
Roughly the same setup as now, but other folks would now be paying your mortgage instead of you paying theirs.
Use your income to get a better pension and some ISAs going, and let time and compound interest do its thing
robyorkshire said:
Pensions standard min contributions have about 15k pot. Now pensions. Looks like they lose money each year rather than make the pot increase.
What are your goals?It's been a weird couple of years for investments (and it's useful to appreciate that a pension is just a "wrapper" with some tax saving rules that holds investments, there's nothing magic about them).
You may find https://flowchart.ukpersonal.finance/ useful
There's a wealth of information on Youtube about managing your finances, as long as you are selective (there's plenty of nutters on there as well)
Also make sure it's relevant to a UK saver / investor. A lot of it is U.S. based info, some relevant to us, some not.
I've always found this guys videos very good, but there are plenty of others.
https://www.youtube.com/@Pensioncraft
this guy as well.
https://www.youtube.com/@JamesShack
Also make sure it's relevant to a UK saver / investor. A lot of it is U.S. based info, some relevant to us, some not.
I've always found this guys videos very good, but there are plenty of others.
https://www.youtube.com/@Pensioncraft
this guy as well.
https://www.youtube.com/@JamesShack
Edited by BlackG7R on Sunday 7th January 17:42
robyorkshire said:
Currently living in HMO house share have no debt
Have 65k in savings account chase and currently at 5k in premium bonds. Last 6 months only £25. works out about 100ish a year no big prizes.
Present salary around 40-45k varies panel beater. Pensions standard min contributions have about 15k pot. Now pensions. Looks like they lose money each year rather than make the pot increase.
Get about 220 p/m from savings account not in any ISA, worried by PAYE take home will change next year.
@35 only 70k savings is pretty piss poor but is what it is, wouldn't even buy a flat. But do have my T5 camper.
Jobs in Europe as LTD paid weekly but with just British passport max 3 months out of 6. Tempted then 3 months in UK as LTD Then repeat. Have zero idea how this works in setting up as agency say i have to do this myself and they offer no financial advice.
Feel as if treading water at present just existing with no plan.
No offence but on those figures all you’ll ever do is exist.Have 65k in savings account chase and currently at 5k in premium bonds. Last 6 months only £25. works out about 100ish a year no big prizes.
Present salary around 40-45k varies panel beater. Pensions standard min contributions have about 15k pot. Now pensions. Looks like they lose money each year rather than make the pot increase.
Get about 220 p/m from savings account not in any ISA, worried by PAYE take home will change next year.
@35 only 70k savings is pretty piss poor but is what it is, wouldn't even buy a flat. But do have my T5 camper.
Jobs in Europe as LTD paid weekly but with just British passport max 3 months out of 6. Tempted then 3 months in UK as LTD Then repeat. Have zero idea how this works in setting up as agency say i have to do this myself and they offer no financial advice.
Feel as if treading water at present just existing with no plan.
While you might not think it you’re earning more than average and I’d wager you have more saved up than nearly all of the people you know of your age/peer group.
Where in the country are you?
I’d be putting whatever needed down as a deposit and buying a place with enough rooms to rent out to trustable folk if possible.
Cars/bikes/hobbies will happily hoover up anything left over. You’ve got 30 more working years presumably to get a pension planned - living somewhere nice and safe while doing it is all part of the journey.
Where in the country are you?
I’d be putting whatever needed down as a deposit and buying a place with enough rooms to rent out to trustable folk if possible.
Cars/bikes/hobbies will happily hoover up anything left over. You’ve got 30 more working years presumably to get a pension planned - living somewhere nice and safe while doing it is all part of the journey.
I would look at where your savings are. 65k at 4.5% is giving you basically 2k interest. Any interest over 1k based on your current earns will be taxed at your nominal rate (20%). I'd either open an ISA, and or max out your premium bonds.
Obviously you'd want a rainy day fund, however you can access funds in premium bonds easy enough.
Obviously you'd want a rainy day fund, however you can access funds in premium bonds easy enough.
Personally I would use that £70K as a deposit to buy the best property I could get a mortgage for.
Even if that means as some have suggested that you have to rent out one of the rooms.
I don't mean to be harsh, but if you don't do this now you will be renting with no way to afford to retire for the rest of your life.
Even if that means as some have suggested that you have to rent out one of the rooms.
I don't mean to be harsh, but if you don't do this now you will be renting with no way to afford to retire for the rest of your life.
We have an 11 bed HMO... I wouldn't want to live there!
My advice would be to buy your own place (mortgaged) and if you want to offset some of the cost get a lodger (tax free up to £7500)... Then at least you're not wasting money paying someone else's mortgage whilst you decide what to do.
If you ended up working abroad you could always rent your place out.
Like others on this thread I am confused about what you actually want however and it sounds like you are too?
Well done for managing to save that much cash by the way!!
My advice would be to buy your own place (mortgaged) and if you want to offset some of the cost get a lodger (tax free up to £7500)... Then at least you're not wasting money paying someone else's mortgage whilst you decide what to do.
If you ended up working abroad you could always rent your place out.
Like others on this thread I am confused about what you actually want however and it sounds like you are too?
Well done for managing to save that much cash by the way!!
As others have said, you've done well to save up £70k. Presumably you wouldn't have been able to pull this off if you were renting alone so living in an HMO was a good shout in the circumstances.
IMO first step is mortgage advisor to help you understand what kind of property you'll be able to afford.
I wasted time guessing what I could afford based on calculators available online, and old rules-of-thumb... However, once I actually had confirmation from a mortgage advisor of what I could afford to buy it all suddenly became real to me. It gave me the confidence to start viewing stuff and making offers.
That is unless you don't want to buy property in the immediate future- in which case your attention should be getting the best possible returns from your savings. I sat on my savings for years during the times of zero interest and wish with hindsight that I had invested some of the money.
You should consider significantly upping your pension contributions so that you and your employer's total contribution is more like 15%. Have a play with the salary calculator. It probably won't reduce your pay slip as much as you'd imagine.
IMO first step is mortgage advisor to help you understand what kind of property you'll be able to afford.
I wasted time guessing what I could afford based on calculators available online, and old rules-of-thumb... However, once I actually had confirmation from a mortgage advisor of what I could afford to buy it all suddenly became real to me. It gave me the confidence to start viewing stuff and making offers.
That is unless you don't want to buy property in the immediate future- in which case your attention should be getting the best possible returns from your savings. I sat on my savings for years during the times of zero interest and wish with hindsight that I had invested some of the money.
You should consider significantly upping your pension contributions so that you and your employer's total contribution is more like 15%. Have a play with the salary calculator. It probably won't reduce your pay slip as much as you'd imagine.
Edited by Hustle_ on Friday 12th January 18:21
OP you don't mention what your life plans or ambitions are?
If you are comfortable with your work life and don't have big plans to move to another country it seems pretty obvious to me that you should be buying yourself a property (depending on where in the country you are).
I couldn't personally imagine a life where I would be living in a HMO as a long term lifestyle choice if I could avoid it, especially into your later years when you start having to consider retirement, now is the time to get started IMO with the savings you have built up
If you are comfortable with your work life and don't have big plans to move to another country it seems pretty obvious to me that you should be buying yourself a property (depending on where in the country you are).
I couldn't personally imagine a life where I would be living in a HMO as a long term lifestyle choice if I could avoid it, especially into your later years when you start having to consider retirement, now is the time to get started IMO with the savings you have built up
Are you saving money living in the HMO OP?
Once you work it all-out, utilities (with standing charges) gas/elec, water rates, heating bill, TV, council tax, internet, any boiler inspection, boiler or property repairs that may arise, any gardener/window washer services, house insurance etc.. And any commute (social & work) you may have if living further away. It could be a saving, esp if you would have to commute. (Overlooking commute and full spread of bills is why some people can't understand some high end HMO pricing, its high but saves the people who pay it time & money.)
If your happy in there and it works then I wouldn't rule out getting somewhere and starting up your own HMO by structuring debt so that it makes you money whilst being serviced by tenants who also put money in your pocket as property likely goes up in value.
This way your accommodation needs/a normal mortgage can be (or mostly) met outside of your wages, and you could make thousands years down the line if you come to sell the HMO property to cash in on any significant property price rise.
Also, if you haven't, start building your credit score, lender relationships and limits up.
Once you work it all-out, utilities (with standing charges) gas/elec, water rates, heating bill, TV, council tax, internet, any boiler inspection, boiler or property repairs that may arise, any gardener/window washer services, house insurance etc.. And any commute (social & work) you may have if living further away. It could be a saving, esp if you would have to commute. (Overlooking commute and full spread of bills is why some people can't understand some high end HMO pricing, its high but saves the people who pay it time & money.)
If your happy in there and it works then I wouldn't rule out getting somewhere and starting up your own HMO by structuring debt so that it makes you money whilst being serviced by tenants who also put money in your pocket as property likely goes up in value.
This way your accommodation needs/a normal mortgage can be (or mostly) met outside of your wages, and you could make thousands years down the line if you come to sell the HMO property to cash in on any significant property price rise.
Also, if you haven't, start building your credit score, lender relationships and limits up.
I don't think you've done too badly
Plenty of people in worse situations than you and I wouldn't rush to buy a property and get mortgaged up to the eye balls like everybody else has said
Have a think about what you want to do and where you want to be in the next few years and plan accordingly.
Plenty of people in worse situations than you and I wouldn't rush to buy a property and get mortgaged up to the eye balls like everybody else has said
Have a think about what you want to do and where you want to be in the next few years and plan accordingly.
anonymous-user said:
Personally I would use that £70K as a deposit to buy the best property I could get a mortgage for.
Even if that means as some have suggested that you have to rent out one of the rooms.
I don't mean to be harsh, but if you don't do this now you will be renting with no way to afford to retire for the rest of your life.
Even if that means as some have suggested that you have to rent out one of the rooms.
I don't mean to be harsh, but if you don't do this now you will be renting with no way to afford to retire for the rest of your life.
As others have said, this would be my plan too, use the money as a deposit on a property, get a lodger (or 2) which will help you with the bills / mortgage / your savings if you need it.
Again as others have mentioned, put some money into your ISA to shelter the interest I guess you are receiving on the £70k - if you don't want to take any risk then a Cash ISA is probably a better option. I'm not sure if an S&S ISA would work for you as you might need the money in the near term for a property.
Gassing Station | Finance | Top of Page | What's New | My Stuff