How much should we save?

[Mirrorxx]

So we are about to move to a long term home. Before this even though we have owned houses we have been saving towards this bigger move. We are used to having a smaller mortgage but saving a lot but when we move the mortgage will be a bit bigger and we want to relax a bit with saving. What percentage of income do you think is reasonable to save considering we will have a 6 month emergency fund and pension saving is already taken care of?

Hello, congrats on your move.

Annoyingly I am going to say this is a personal preference decision!

One way to approach it is by looking at how much you can afford to save after all bills/expenses and do that. Overpaying on a big mortgage in the early years is worth doing as it saves money down the track.

It's very much a 'how long is a piece of string' question.

What are your lifestyle expectations (holidays, where you do your grocery shopping and what sort of food you buy, what you spend on personal grooming and clothes, how often you eat out and where, what you spend on cars, gadgets etc).

The amount people spend on the above will vary by hundreds, if not thousands of pounds a month depending on how much money is available and what people actually buy/do.

There's also the consideration that if you're more towards the lower spending end of the spectrum, this gives you the freedom to work less and/or retire earlier, if that's something that's important to you.

Also percentages don't mean much because the amount of money that a certain percentage is varies enormously depending on how much you're talking about, eg if your income is £2k per month and you save £200, that's 10%. If your income is £10k per month and you save £500, that's only 5%.

Once bills and food shop are paid and emergency fund is full, I've always split the rest of my money into thirds. One third in savings, one third towards holidays and a third to spend.
Atm I'm saving to retire soon so have a lot of cash savings (maximum amount in premium bonds for example) whereas previously I would overpay the mortgage, invest etc once I had saved a certain amount. Saving for the sake of it in a ordinary bank is a bit pointless with low interest rates.

If you've got pensions and a six month emergency fund, I'd personally be looking to invest with a view to paying off the mortgage early. How much depends on how much you have spare. The answer will depend on how much disposable income you have, and what your future plans for retirement are.