I earn £60k and I can’t keep my family warm

[Theyarellthesame]

Exactly that and I’m so, so frightened.

im 31 and I’ve done everything ‘right’ - went to uni, got myself a job and in 8 years increased my wage from £16k to £60k. We waited 13 years to have a baby until we’d saved up £20k so I could afford maternity leave, had £6k-ish left over after mat leave.

I live rurally in one of the cheapest areas in the country in a 4 bed Victorian semi, it’s not grand in any way. Lovely, but a basic 4 bed, 3 storey family home. When we moved in I had the loft insulated but we can’t have a smart meter because of something to do with where the meter is located.

My DH is a SAHP so no childcare costs for my 18 month old and he’d only be able to earn minimum wage so his take home pay per hour would be less than the cost of childcare, hence why he’s a SAHP.

Yesterday I got an email from bulb putting my direct debit up again from £290
to £470. It was £120 2 years ago. On top of everything else going up I just categorically cannot afford to pay that. There isn’t enough money by £149 a month to cover the bills for the household.

I think my options are to cancel paying in to my pension to free up that money or stop paying my student loan? Can you do student loan holidays?

mortgage is on a 5 year fix with 2 years left at 1.99% so that’s as low as it can go, we don’t have Netflix, sky or Prime anymore, we just have a TV license. We do have a Spotify subscription. Both our phones are on £20 a month contracts, we don’t have any debt other than student loans and the mortgage. We do have a dog and his pet insurance is £60 a month but it’s none- negotiable that we keep that going.

We batch cook using the instant pot to avoid putting the oven on, we do use the washing machine a lot because we use reusable nappies. I drive a plug in hybrid so the electric is high because of that.

We have 1 or 2 U.K. holidays a year, usually a static caravan or holiday cottage for a few days. Total cost of holidays per year is around £1k so I’ve already knocked saving for those on the head.

No chance of my wage increasing again any time soon, I’ve pushed very hard for the last 8 years to climb a very greasy ladder and there’s no where else to go from here.

WTF do I do?! There’s news all the time how this is going to get worse again in January and the only advice coming out seems to be ‘go and get a better paid job’ but I HAVE a well paid job! we want another baby but I’m currently telling DH no because we can’t afford it and need to save like crazy.

Im very very frightened, how much worse is it likely to get from here?

I suspect DHs heat tools are the equivalent of having an iron on. It will be costing a lot in electricity, probably more than the tiny amount of money he is “making” on the hobby.

OK, so unsurprisingly you have some atypical outgoings there.
It is disingenuous to suggest that £60K doesn’t allow you to heat your home, when there’s a £750 pension saving coming out of it!
I usually with the voices on the Money board saying, pay into your pension!
But you need to be realistic here.

I know you can’t undo the money spent… but why plough all that inheritance into a workshop and then not progress that career?!

You need to look long term here.

What’s a better investment for the “spare” pension money (the extra, not all of it)?
Is of the tax saving now and retirement income? Maybe.
But maybe £200 of pension is 3 days childcare which would allow your husband to start to build his business, meaning that in 3 years time you’ve missed £7200 of pension saving + compound interest but you’ve got a thriving business bringing in more than the NMW which you say is all he could earn now.

It’s foolish to only do childcare cost vs wages.

Think long and hard about the potential of his business though. Just because his parents looked out for you, doesn’t mean you have to bankroll a hobby business for him. If there’s a future in what he does - go for it hard, as a family. If there isn’t, then the sooner he starts a NMW and looks for progression through that, doing the hobby as a side hustle, the better.

If it’s worth a shot, investing in his business is better than investing (extra) in a pension.

Hi, OP. In your situation I would:

1. Reduce pension payments temporarily.

2. Encourage your DH to upskill, and not assume he can only earn minimum wage. Look at the bigger picture - if he learned new skills this year, then in 2-3 years could be earning decent money, your child might be at school so you'll both have more time. At that point you could increase your pension payments again.

3. Look into your energy payments carefully, as that sounds a lot even with the price increases (lots of advice about that further up the thread).

At the end of the day, you need to either cut back or make more money (or both) to avoid getting into debt. It depends on you and your priorities how you want to do that.

My main thought is that you are overdoing it on the pension payments and that is where you could make savings. I know you won't want to cut it but it will only be temporary until your DH upskills. It is a huge amount you are putting into your pension and you don't have the money for it.

What is £150 fuel? You have an electric car?? If this is for your SAHP then this is totally unreasonable. If you don't use the electric car to go to work, why not? I'm assuming that you do more miles even though only 3 days a week?

He's raw fed, only thing that doesnt cause a flair up and yes, he's enormous. His insurance is definitely worth it even at £160, he's still fit and active but has an autoimmune condition that can flair at any time - when it does, it can impact any part of his body depending where he's picked up an infiection that any other dog would shake off easily. He can go from perfectly find to essentially deaths door in 48 hours with no warning. But yes there will come a point where we'll stop paying this in the next couple of years when he gets too poorly to put him through any more treatment.

DH needs to step up and at least get a part time or weekend job. What about deliveries at the weekend or virtual customer services assistant. Do you get any hours free childcare that could free up some of his time to work?

I also agree on reducing the pension contributions, that’s a very big percentage you’re contributing and heating your home is more important. Does your workplace not contribute to a pension at all?

It is disingenuous to suggest that £60K doesn’t allow you to heat your home, when there’s a £750 pension saving coming out of it!

This absolutely!

You're causing this by poor financial choices. But also 60K isn't a huge amount to support the three of you. Time to re jiggle the finances.

@Theyarellthesame i think this is actually much more about psychology than income.

You've worked very hard to get where you are. As you said in your OP, you’ve done everything right and you’ve reaped your well deserved reward. Neither you nor your DH came from lots of money, so you’ve managed to get yourself into a great position financially and have bought your own home and have started to feel secure and like one of the people that are ‘together’ financially. Then suddenly you’re finding that 60k isn’t an infinite amount and actually, there are still choices to be made on how to spend it and what you should prioritise. That can feel wrong when you’re on an income that you could only have dreamt of back in the day when you were at university.

You need to adjust your expectations slightly. You can find that money by being a little bit more careful with your discretionary spending, or you can find a way to bring in a little more money. What you can’t do is expect to not have to make choices about how your money is spent. It’s a big income compared to many, but it’s not an endless pot. You’ve got to accept that.

OP: you're saving for a rainy day and for your retirement. To some extent, this is the rainy day - a cost of living increase coinciding with the relatively short period when your DC is little enough to not get free childcare or be at school.

You need to pause those pension savings for a bit, just until DC is 3 and gets free nursery hours. You've got a long time until retirement. It's commendable to be so conscientiously saving for it, but doing it to the point where you're panicking about how to pay your bills in the here and now is bonkers.

Your student loan repayment should’ve be anywhere near £400/month if you’re on Plan 1 or Plan 2.

DS needs to go to nursery and DH needs a full time job with a pension and scope to progress.

I’m not sure it is sensible for the Op to reduce her pension amounts. She has said that her employer pays in well as well. Assuming “matching” then for every £100 she pays in her pension increases by £200.

If she reduces her pension conts by £100 then £40 will go on tax, £3.25 will go on NI. If she does the self assessment thing to reduce student loans by pension conts then £9 will go on student loans. It looks like she is around the child benefit threshold so £10 will go on reduce CB.

That leaves her with a grand total of £37.75 compared to the £200 that would have gone into her pension.

Obviously if that £37.75 is the difference between freezing and surviving then she needs it but the “earning £50k - £60k with kids and student loans” is a very punitive point tax wise.

On these topics:-

1. Child benefit - are you getting it? With the amount that you are paying into your pension your income is down to £51k so you should get 90% of it. That will give you an extra £80 per month.
2. Student loans - investigate the self assessment thing - it didn’t apply to me but I think you can fix it so you only pay on your post tax income.

At £60k you're making around £5k a month. Something isn't adding up here....

You need to reduce your pension, it's all very well planning to have a comfortable retirement but not if it puts you into debt. You can probably reduce your food bill as well. What I'm seeing is that you dont particularly want to make any sacrifices because you earn a decent salary and shouldn't be struggling which I agree with and sympathise with but unfortunately we are all in a similar position atm

I think you need to reduce what you're paying into your pension. That is a lot to be paying in and you can easily make up the shortfall of your outgoings if you reduce it to £500pm.

Some of your outgoings seem really high. Car insurance is very high - are you / DH a new driver?

Ultimately you can make the savings you need to make by reducing the amount you pay into your pension.

That's pre-tax at 40%

@Dannexe

Don't forget trying to heat a drafty garage as a workshop.

If there is a couple of kw electric heating in there on for many hours a day that could easily rack up £50-£100 a month.

Tax, national insurance, student loan, pension etc comes out of that 5k.

£140 a month for car insurance?! Get on the comparison sites and get that cut right down!

Same with the pet insurance - you're bound to get cheaper.

@LuckyLil Your maths or grasp of the tax system is probably not helping.

Oh and don’t be one of the rather large number (it always seems to me!) of MN posters who can’t implement any suggestions “because we live rurally”.

There’s a lot of threads like that - can’t get rid of second car, can’t get a lodger, no jobs locally…

You are living in one of the cheapest areas of the country, yet you’re paying £300 a month in council tax?!

You’ve got a property that’s bigger than your needs (even with the extra adult you now mention) of a type notorious for fuel costs, in a rural area that brings its own restrictions, and you’re paying a huge amount of council tax for that. Is it really the right house for you?

Shouldn’t be!!

What’s not adding up is your understanding of taxation 🤣

Which still leaves a hell of a lot to live on afterwards. Like I said, something isn't adding up.

That's bollocks, take home pay on 60k is £3,605.