Rate my financial situation

You’re in a better position than me and I’m almost 40. Still not managed to buy a house and we are currently living on my partners wage alone as I’m a SAHM. We have savings and only 2k debt but you’re still way better off!

You are consistently getting the same advice over and over. Start a pension. It won’t cost you as much as you think (ask company to run a projection for you). You are missing out on tax benefits and free money.

There’s ways you could mitigate the take home difference if you pay into your pension. I think you’d find it’s affordable and achievable, even with your other financial aims.

At the very least open a stakeholder pension. We pay £20 pcm into a stakeholder pension for DS (18) and DD (15) the Govt tops that up by £5 every month (tax relief). They won’t be able to access it until they are 57 (by current rules) but that’s ok.

You could open a stakeholder pension to get the tax benefits for now.

Your determination to clear debt and build emergency fund is blinding you to the importance of a pension right now. I’ve found that people always have a reason to put it off. In fact I read something on MN about a woman who’d put it off and off (for “legitimate” reasons like yours) then all of a sudden her retirement was 15 years away and a financial advisor told her she’d need to save something like £800 pcm to get a decent private pension.

via my work I come into contact with the gender pension gap.

I honestly believe that paying your future self first is one of the most important financial plans to have.

keep the debt on 0% where possible. Economise where possible. Slowly build your emergency fund but start a pension now, not in 2 years…because as sure as eggs are eggs, there will be another good reason not to start then.

15 years ago I encouraged all of my team to join the company pension. Using the free money angle and boy I’m glad I did, because 3 months after that the company reduced their offer of the company contribution from 10% of salary to 6% of salary for new joiners…but everyone in the old scheme got to keep their 10%. So do it now, because your company could easily change (and probably for the worse) their pension offer.

you’d be gutted if that happened. They might increase the payment you make and decrease theirs. Also please check because I think there are rules about minimum pension contributions and I think that’s at 3%.

In your shoes I would open a stocks and shares ISA and pay yourself 10% of your take-home first. That way it's invested but still accessible to you. Next, open a cash ISA. High rate and stick your cash savings in there.
Open a SIPP and once you have 6 months of costs saved, take each additional month saved and transfer it to your SIPP or stocks and shares. Avoid individual shares, buy trackers etc.

If your company does matched contributions you're absolutely mad to be missing out on free money. Sign up ASAP. So many tax benefits being lost out on.

I'd cut the TV/Broadband/Subscriptions right down. Your food grocery spend also seems high if you're on your own, we budget 600 for 4.

Aim to pay down say 50% of the debt on 0% and then whatever's left at the end of the term...shift again to a new 0%.

This way you achieve a better balance - debt reduction in flow, savings balanced across cash, investment, and pension. All at the same time.

I agree with what you are saying. My point is that you are talking of « in 2 years » or « I will »… and I guess that I am talking about now.

So, now, if anything happen to your income you won’t be able and you will only have what you have now.
I am not super aware of the legislation but in my understanding, yes, savings first then your house…it will absolutely get sold for you to be able to make payments or they will turn to your kin to action. They won’t « not touch » your house and you can live free of charge whilst sitting on the equity. I agree that, if you can…so no accident…everyone should sell to access a « better care » but the price of it might mean that you go there first and then…in the state one if no one can keep up the payments.

Do you have a financial advisor?

@Juniperberry55 being debt free is very liberating and has improved my wellbeing tremendously. I lost my partner (he died) couple of years before me getting to this point, and finally paying off my mortgage allowed me to move forwards mentally.
As regards pensions, I'd already been paying into these regularly since my late 20s but having paid off the mortgage allowed me to pay AVCs on top of what I had been paying in anyway so improved the value of these.
When I got to my early 50s I began having pension planning with an annual review so this process enabled me to have goals to work towards to achieve this. I would really recommend this for you when you can focus on your pension plans.

You need to get a pension

id probably say 4/5

house situation good

debt and lack of pension is below average I’d say.

I personally wouldn’t delay the pension. Employers have to put some money in to match your contributions so “free money”. I’ve been paying the amount my employer will match into my pension for the 10 years I’ve been working and I have over £150k - I barely notice the amount going each month as it’s such a small % of take home pay.

I would pay £50 a month now into a pension you get tax relief so it won’t be as bad as pensions take a long time to accrue value the younger you start the better.
you have done amazing on the mortgage front though. The interest free credit cards are ok as you can manage them I woukd personally pay into pension and if you have to transfer the interest free credit card debt to another card so be it.
once the credit card gone those repayments can go straight into savings and pension.

OK, given you have good sickness benefits the situation isn't too bad.

Sorry I mean pushing the debt out by 1 years- i.e.3 in order to start the pension sooner. You'll also get tax relief on the contributions etc.

How about a lodger to help increase finances

Admittedly it’s been a while since I looked at this however, late 90s when I was single and buying a home, these policies seemed prohibitively expensive and the circumstances they’d pay out in seemed very narrow. I looked again about 15 years ago when my partner became self employed so slightly different circumstances and drew the same conclusion. Again, it’s something you often see suggested but not something that is either affordable or worth having in terms of what would be paid out.

Not paying into a pension is literally throwing away free money. Madness not to be contributing.

The one thing that would make a huge difference is whether or not you have an income protection, critical illness or sick pay at work.

What would happen if you had an unfortunate event, put your back out for 6 months or something, would it all come down like a house of cards etc.

If you have that covered, I really would start a pension, even £100 p/m. It will accumulate more over the loan term that any savings in interest but pushing the short term debt out over 1 year if you can at all.

Indeed! To compensate for no pension you would need to inherit a huge amount so make sure you are the sole beneficiary! And as for the OP having few outgoings in her 70’s! Well, if it’s Hobsons choice, she clearly won’t have outgoings but the 70’s for most people are the travel and spend years of reasonable health. Obvs you could go tomorrow or conversely live to over 100 however, most pension planners say plan for 10 years active retirement with a big spend on leisure and 10 years ‘quieter’ when health may restrict activities.

Unfortunately years of pension contributions backloaded are not worth the same as years front loaded or made evenly across a career. I see you understand compound interest and others have mentioned matched employer contributions; there’s also tax advantages/ni advantages. If you work for an employee with a modeller you could try visualising different options. I think private pension providers also have these available if you try a few sites. I get you know conceptually but these modellers really bring it to life.

re: spending: my cat gets by on a fraction of that. Is there a special diet involved? The overall food spend/cleaning supply spend is quite high too. It’s 3/4 of what I spend for my family of 3.

re: income, understand you can’t work more but given your biggest asset is the house, would a lodger work? I have a single relative who does this periodically with mixed experiences from the ones who make little impact to the ones who feel like they impose.

Most people inherit something????????
????????
Disagree entirely