£150k salary aged 35 AMA

[RaeS345]

Mum of 2
Married, 35
AMA

I'm amazed it's hard for you and your partner to save £23K or afford a home in London.

We live in outer London (albeit we'll need to upside in next couple years) and our able to save £20K a year earning probably half what your household earns.

Is it because your kids are in private school or something?

@Steyning I absolutely agree! I was a teacher for years (often in schools with extremely challenging cohorts) and feel an utter mug when I look back.

In a typical month how much do you have leftover between the two of you after bills, mortgage, food etc? General every day spending not including holidays.

Do you fill the family's ISA allowance every year?

@RaeS345 re pension per my earlier comment, I earn way less than you but I am shoving in a £1000 a month on top of the 7% regular. It’s taken before tax. Every pay rise I get goes in as well so I’m not reliant on pay rises and can go elsewhere if I’m fed up. Company puts in 11%. Obviously there is a limit on what you can put in in total. It adds up quickly and steadily when you look over 5 years (ignore the scary bumps in between).

Autocorrect changed does to is. Well done for spotting it, you must be a smart cookie :)

yes they would, I run the numbers. They’ll get lots more in pension contributions, correct, and childcare, but they will still have to live on less cash every month and sometimes it’s not feasible.
plus value of 50K 30 years from now (even invested) is not the same as cash today

it makes sense if people just over threshold but they are both high earners and they need to move at least 80K into pensions between 2 of them

The difference is minimal. Work out the effective marginal tax rate on the amount above 100k. In their circumstances while they have nursery age children it’ll be over 90%.

Not putting the amount into pensions for 3/4 years is crazy. Effective marginal rate of course drops once nursery finishes and the calculation then changes.

50k of the 80k is taxed at a minimum of 62% before you’ve even factored in childcare.

3 years of 80k pensions between them gives them a 240k pot. Instead they are taking no more than 35k pa cash each year (less if student loans to pay) and at the same time giving up around 10k childcare per child.

That leaves you with a choice. 240k in a pension pot or 45k additional cash over the 3 years. You’d have to be pretty desperate for cash to take the latter.

Sorry for delay.
Others have responded i see. At the end of the day putting more £ into pensions is incredibly tax efficient (unless budget changes this) at your salary level. Also of course the earlier you put more in the longer it has to grow .
But its also important to have cash savings, you've mentioned doing this in your analysis but also that this was a recent starting point. So depends on how much you've saved so far. Ideally 4 to 6 months take home pay less the 4k you save each month. If you are close to having that level of savings then yes definitely start!

This may be true, but this is unrelated to receiving a promotion or receiving a high paid position.

It's not as if at job interviews they ask questions about working long hours and working 7 days a week, so it has nothing to do with receiving a promotion.

But it very much helps you get the extra experience required to secure the promotion.

Value generated - please put a price on repairing the highway so that people don't die in RTAs, or feeding a disabled elderly person so they don't starve, or providing education for 93% of the country's kids?

Can’t be true. What role / industry?

If you've done a job for 2 - 5 years, there isn't an additional experience to be had from working long hours.