To ask how to come to terms with this financial situation

OP I get you. I was/am in a similar situation (ok without the child to think of so that's a big difference). What I've learned is, with a big upheaval like this, the mind chooses something to focus on and obsess over, and your mind has chosen this. It's a big trauma you have come through. However it's your mind currently tricking you and catastrophising, and you need to find out how to train it. I would suggest CBT rather than counselling. However given that money is "your worry", the cost of that might fill you with more anxiety (I get it). You could try thinking of things you can do on your own - for me, it was yoga, cold showers and when my heart rate goes really nuts and starts interfering with my eating and sleeping, beta blockers can just bring it under control a bit, and that then starts to help re order my thinking. The panic is awful - I get it.

With every month, you are decreasing your debt and improving your long term prospects. You are extremely unlikely to lose your home. If your parents have a home worth £900,000 (plus presumably other assets?), you are also likely to have at least a bit of an inheritance. IHT won't take it all either. Ok you can't count on it, but there's likely to be at least a bit? And presumably, you are paying NI and into a workplace pension. You will be ok.

I added my first reply before I saw this. Inheritance tax doesn't swallow up all your inheritance.

While you can't ever expect to rely on an inheritance, if your parents were able to pass that your (and your sibling's) way, honestly, you will be fine.

Between the two of them, including residential property, they wouldn't pay IHT unless the estate was over £1m and then only on the bit that's over £1m.

So, let's just say they have a £900k house and £200k in bank accounts and other assets. Total = £1,100,000. Tax is 40% on £100,000, so £40,000.

The estate value is then worth £1,060,000, split between you and your sibling, so £530,000 each. You won't then pay any further tax on this.

Honestly you need to shift your thinking. I’m a single parent and rent. I’m terrible with money, and barely save but I have a good stable job and a pension I pay into. Plenty of people work a bit longer for lots of reasons. You have a lot of positives and I get it’s easy to spiral when it’s suddenly all on you alone - it can be overwhelming but you can’t long term exist stressing about that every day and night. Find a way to cope with it, before it eats you up. You can always down size and move once your child is older and finishes school. Nothing has to be forever.

You should get a lodger and save the money from that

https://www.gov.uk/rent-room-in-your-home

I agree with pp. Consider renting one of the three bedrooms out. That would help, financially, a lot. I know someone who has taken in a lovely Japanese girl studying here. She's a delight. It is possible.

You have a home that you are managing now. You are not obliged to stay there for the rest of your life! You can always downsize or move to a cheaper area when it gets too much. So many people will be renting forever. To buy a house as a single parent is amazing and though it may not feel like it now, you are in an amazing position and will have far fewer worries than people renting when you get to retirement.

Don’t be ridiculous. Of course tax won’t wipe out everything. Is this actually a dig at the government by stealth? Oh poor you, being in a position to worry about inheritance tax.

I’m naturally a pretty empathetic person, but your posts are really tone deaf and have made me cross. Do you know how many people your age who are living in housing insecurity? Or using food banks even though they also work full time. Or will NEVER be a home owner.

The kind me appreciates you’re stressed by your breakup, but if you don’t learn a bit of gratitude you’re going to be very miserable.

Seek some support.

See your GP. You are in a bit of a spiral and may need some short term help. Really, you are in the same position as a large percentage of people. Nothing much in life is guaranteed but you are only focussing on the negatives. You are healthy, your daughter is healthy, you have your own home and things will get easier.

"Get to 65, want to retire"

Her state retirement age will be 67, 68 or higher for people of her age

The current state retirement age is 66

The term of most mortgages is 25 years. If you are nearly 40 now, you should have paid off your mortage by the age of 65. Your retirement age is probably 67 or 68.

Could you look to progress in your career by applying for more senior and well paid roles?

You have to reframe this in your mind in that people that are 70 now bought properties when they were probably younger and properties were cheaper. Unfortunately due to factors outside of your control, both personally and nationally, that was never going to be an option for you. So, please try not to compare yourself to current 70 year olds.

For context though, my parents are 70 and 75 but are still paying £800 a month in rent, because they never managed to buy a property. For every "comfortable" 70 year old you see, there are plenty that aren't as comfortable.

What's the term of your mortgage? Is it 30 years? Mortgage companies are often not keen to lend if your mortgage term is going to go beyond state pension age. We had to shorten our mortgage because of DH's age for this reason.

Ultimately, as long as your mortgage is a repayment mortgage, you will pay it off at the end of the term.

A couple of things you can do to bring that forward, that may not be a big difference on a month by month basis:

• make overpayments to your mortgage whenever you can. Ideally you could do this on a monthly basis. We've been overpaying by £100 a month since we bought our house 12 years ago, so have paid off an extra £14,000. Even £10 or £20 a month will make a difference. If you can't do this on a monthly basis, if you have a month (January and February maybe, if you don't pay council tax those months) where you have a bit spare, you could make one off extra payments.
• each time your fixed rate term comes to an end, shorten your renewal by a year or two. For example, if your rate is coming to an end and you've got 25 years left, do a renewal at 24 years. If you renew a £240k mortgage at 4.5% the monthly payment is £1,333 for 25 years or £1,364 for 24 years or £1,397 for 23 years. For an extra £64 a month you'll shorten your mortgage by two years or for £31 by one year.

Agree with others - see if you can speak to your gp re the anxiety. They will help.

re the house. If you’re managing to pay the mortgage bills necessities and even save £100 a month as a single parent you’re doing amazing. It might not feel like it now, but you are.

the first few months/year of a mortgage are the toughest as you don’t ever see much of a dent being made in it. But eventually you will. You’ll see it being chipped away.

my advice would be this re the money/mortgage:

• check what type of mortgage you have and whether it lets you overpay.
• if it allows an overpayment and only if you can afford it increase your payment by say £10 a month. Every little makes a difference. - we are on a variable rate at the moment and I’ve continued to pay the “first” variable rate amount we had to pay despite there being a drop in interest rates. So we’re overpaying by £75 a month and will continue to do so until out variable term is up.
• if there’s anyway you can increase your salary do it. Are you overdue a promotion/payrise? Have you asked for more money (be prepared to back this up with why you’re deserving of it)
• would you look at changing jobs?

But everyone pays mostly interest first.

In 5 years you'll see a shift in the amount of interest you pay and capital.
In 5 years you'll likely be earning more so the mortgage amount wont feel so huge.
In 10 years you'll be paying more off the capital and less interest and be earning loads more and be thinking about paying lump sums off.
Also if you keep saving minimum £60 every month you'll have 7k in the bank. In 10 years your child will be so much older and requiring less paid for childcare, a massive saving.

I agree with the magnesium supplements. Go buy some today, start taking them. I bet your anxiety decreases.

Inflation will also eat away at your mortgage, so it will become more manageable as time goes on. There is a good chance you will pay it off. Much more secure than renting. You have done well. It’s daunting to be doing this on your own, but you need to pause and praise yourself a little for your achievements.

It's still a large inheritance.......

The ridiculous scaremongering in the press about inheritance tax has really scrambled people’s brains. Of course tax wouldn’t mean you ended up with nothing! There are inheritance tax calculators online. Your mortgage will have a finite term - 30 years or so, I assume, so you know it will be paid off and by the time you get to the past few years the amount owed will be tiny and your property will be worth more - potentially lots more. You have a pension and will very likely inherit at some point. You are in a very favourable position, so stop catastrophising about being ‘out on the street’! It’s nonsense. You will have a fully paid off home you can live in or sell.

I think the reality and unprocessed feelings of the split from your child’s father is starting to hit you- I think this is often delayed when you’re balls deep in sorting the logistics and trying to keep your head above water…maybe you were super focused on buying your house (well done by the way, that is amazing) and now it’s bought and your visitation schedule is set and everything is settled and you’re ticking along it’s like, bam. The fear of being responsible for a house and a mortgage and a child alone has hit you round the face.

Everyone can see from the outside looking in that you’re doing fantastic; you’ve bought a house and are able to save a little each month, you are providing a safe, secure home for your daughter. This is far more than many can do in the current climate. But you’re in panic mode now. I really think you need talking therapy to unpack the (totally valid) feelings around this. If you hit a mental health crisis, what then? Self care isn’t an optional luxury as a single parent, it’s essential.

You may or may not meet someone who could share financial burden. If your daughter is still living there at 18 she can start paying a small amount of rent, or if she moves out you could downsize or get a lodger

I appreciate it is really stressful, but try to focus on the day to day.

CMS is supossed to pay towards your daughters basic needs - food, clothes etc. If there are extra curriculars your daughter wants to do but you can't afford, would your ex pay towards them?

Forty is no age. You are independent. Make wise decisions for the future and live each day for what it brings. You are doing your best, don't guilt trip yourself, enjoy the time with your child and leave the rest to life.

Also remember over time your income will increase but your mortgage loan will not.
Interest rates will of course impact.

Ive read that overpaying on a mortagage even by small amounts can have a big impact over time. I wonder if that could be possible in very small chunks

or - would your parents consider helping you increase your mortgage payments? What if they chipped in 50 a month towards the mortgage etc - and saw it as a way of helping their grandchild.

Worth an ask?

You need to watch you don't Manifest your vision.

Start to plan financially. I recommend reading some of Dave Ramseys books or watching his you tube videos.

Think positively. Look for solutions not problems.

Your still young - you can make this work.

YOu are thinking too big - too far ahead. day by day OP

You can sell your home when your daughter is older if you need to - and downsize yourself, move somewhere cheaper.

I would suggest if you get on with your parents - sitting down with them and asking their advice.

It's a sign of anxiety when you are looking too far into the future


eg you are 40 - perhaps by 50 you will have found a partner - who can support you with bills/ pay half the rent. Life has so many twists and turns - no point getting too far ahead in your worries.

Maybe at some point you could downsize or share a home with a friend? other possibilities.

https://www.gov.uk/inheritance-tax/passing-on-home

@Justcaant

If you are passing a house to children or grandchildren, the tax free threshold is £500,000 before you pay anything. You would get £240,000 of the £400,000 above that, totaling £740,000. Split between yourself and sibling, this would be £370,000 each.