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?

Are you looking to put your child into nursery when he turns three? If so, this is a short term issue. Reduce pension contributions until then. Look to make savings in other places. Or look at ways of making the money needed to cover your deficit.

If you stop your pension you will probably lose more than double that, depending on your employer contributions.
DD (teacher) pays 12%, another almost 20% is added to that by the TPS. She also has £40k of student loan.
I would give her the money rather than see her stop.
If you are truly desperate, only stop contributing until your child gets a free nursery place, so a maximum of 18 months. The reality is that it will reduce your pension by a huge amount though, far more than you will save by not contributing.

Your partner needs a part time job, even 8 hours a week will make a difference.

Retired Bank Manager here. My thoughts....

Energy: £470 : like others have said, do readings and pay for what you use, you could get this down to £270?

Life insurance: £30 - seems high, I only pay £9.94 and have done for decades.

Car Insurance: £140 : you're paying £2937 per annum? Why? That's astronomical

Mortgage: £849 : think about lengthening your term. If you tell them you're struggling they may allow this. At 31 you could have a 39 year term.

Phones: £40 : I pay £6pm, pay as you go, with an I phone handset, with Virgin. I realise you might be locked in to a contract.

Food: £500 : this is high - switch to Aldi asap. So much cheaper.

Pension: £750 : suspend this for now, you have decades to catch up.

Spotify: £12 : do you really need this?

Rainy Day savings: £100 : you can stop this for now.

Student Loan: £400 : might be worth contacting them to see if you can come to a new arrangement? Or even a moratorium.

Downsize, you don’t need a 4 bed 3 story house.

I'm confused, how did you use inheritance to get your SIL through uni and at the same time she needs to take out a student loan and work in a care home? What exactly did you use the inheritance for?

Agree with others, the answer to your problem is quite simple:

1. your food expenditure is far too high. It may not be astronomical but if you need to tighten your belts, it is not realistic. Considering you use disposal nappies you are either shopping in M&S or having a lot of additional luxuries, which can be cut back on. I would think you can quite easily get your bill down to £60 a week. You may have a couple of nights eating things like sausage, mash and veg, but unfortunately if you can't afford £500 a month on food then you have to cut back

1. Pension costs - it seems bizarre to me that you don't have enough money to pay your mortgage, heat your home or feed your child and you still pay £750 towards your pension. Clearly the common sense thing to do is reduce that massively for 18m until you can get free childcare and your husband goes back to work? What's the point in saving for 40 years time when you're at risk of losing your house now?

1. It sounds like your husband's family were lovely. However, you cannot subsidise your SIL for as long as she needs it. It's not practical or realistic. Your outgoings are higher than your incomings which means you either need fewer expenses or more income. You have an adult living with you for a good chunk of time for free. In an ideal world of course you would help out with financial support but unfortunately it's not an ideal world and you don't have the financial means.

The council tax is pretty normal. I pay more in my two bed northern house than my relative does in their 5 bed £1.2m house in London. Poorer areas pay more council tax in general.

Sorry, car insurance is £1680 p/a! That's still extremely high though!

*don't use disposal nappies that should say

OP - Please ignore the people saying to sell your house - that's a sledge hammer to crack a nut. You'd still have to find somewhere else to live, pay estate agents fees, solicitors fees, etc. Not really an immediate fix.

Please do listen to the people advising to investigate your charges with Bulb further.

Look at how you can sweat your assets- letting agents aren't the best people to seek advice from re: renting a room. Consider looking at Mon-Fri rentals for professionals. You can earn up to £7500 tax free under the rent a room scheme.

Last bit - please ignore all the outrage that your partner is a SAHD.

I would try and change your energy supplier to Octopus, OP. If you give them your annual usage they will tell you what to expect to pay with them.

If you are paying for energy (presumably gas and electrcity) why is there an expenditure of £150 for fuel?

Like PPs I'd reduce your pension saving from £750 to £500, scrap Spotify, and cut back from £500 for food to £350. What you are spending on food is high for two adults and a toddler.

Is your mortgage fixed for a decent period?

Wishing you lots of luck in cutting back!

Presume they mean evenings not nights. McDonald’s has 5-11pm shift (my teen does it she’s at 6th form) but would suit a SAHP too especially on days she’s wfh. Factories, supermarkets do twilight shifts too aimed at students and sahm.

OP, lots of people have queried the pension and student loans costs coming out of your net pay rather than pre tax.

Please can you clarify?

Something definitely doesn't add up with your figures OP.

Are you paying additional student loan payments by choice?

Are you paying into some sort of investment and calling it a pension?

£750 pension contributions should not cost £750 from your take home pay, because of the 20% tax relief you get on pension contributions.

PS Don't try to downsize. It isn't necessary and would cost far too much in any case.

I've read all the updates now, and just think hold tight op, it sounds like you have savings and when your child accesses nursery things will get better.
The early years are tough financially, but you are doing so much for the future so it wont be forever.
You can reduce a few expenses like food and insurances.

im unsure if this has been said already, but can you rent one room/floor out?
don’t have to be to a complete stranger, do you know anyone that knows anyone that needs a place to stay?

far fetched, but if you get that money in now, you’ll see if it works out, rather than putting the house for sale.

good luck, hope it works out for you.

its a rainy day

Face up to that and use the £100 towards bills.

Also I would personally reduce the pension temporarily. That seems very high for your income as a percentage so should really be only for if you're comfortable to spend that (which you aren't right now)

both of those things should cover you and hopefully in 2 years things may calm down a little and you can rework things.

for the inheritance - an option (if not ideal) could be to use some of that to overpay the mortgage, to reduce monthly payments - and then draw it back out if/when your SIL is ready to buy a house? Make that work for you. Check your mortgage allows that.

car insurance seems high too - £1500 a year. perhaps consider a cheaper car for lower insurance if thats an option?

downsize or get your DP to take on employment whether it be part time etc (yes I would say that to a SAHM to an 18m old)

Your student loan payment is very high, is that yours and your DH's combined?

I don't understand your car insurance at all, how the hell is it £140 a month?

I agree people need to stop focusing on the 4 bed house. I imagine it's similar to houses in my area, so pretty compact with a loft conversion.

An earlier poster made a lot of sense when they suggested looking into extending your mortgage term.

I am seeing a lot of “safety” - pension, rainy day fund and lots of insurances like appliance cover.

Completely understandable and very sensible! But 1) some of these could be said to be duplicating each other. Arguably you need lots of insurances OR a rainy day fund but not both. 2) as a PP said - maybe this IS a rainy day. Not just due to fuel prices, but also your child’s age ie no free nursery or school hours yet so it’s worth your DH working more. The very small child years do tend to be quite tight for a lot of people for this reason.

First step is to check the forecast payment, it may be nonsense as some PP
have said. Then do shop around for energy, car etc as advised. Next step would be to cancel some of the insurances or the rainy day savings. I wouldn’t cut pension ideally, but yes if necessary.

Selling the house is not a good idea IMO due to moving costs and stamp duty. Might air bnb be possible if you are somewhere well visited?

If you let out the workshop do have a think about what if someone hurts themselves. Check if your home insurance would cover you for any claims.

I’d drop the rainy day fund for now you can’t afford it, drop your pension contributions you can catch that up when your child is in nursery on free house or school.

you can defo reduce your food bill. I feed a family of 5 on less and we eat good quality home cooked nutritious meals

Im not sure anyone is outraged that he’s a SAHP. The fact is that if your family has a SAHP and you can’t make ends meet, you can’t afford to have a SAHP.

do you have a separate meter on the wood workshop? Your summer energy bills are very high so is that perhaps the workshop using it? That may make Bulb think your winter usage will be astronomical when you add heating in, but the usage may be flatter. Worth discussing with them

If you have bills from last year showing your gas and electric kwh used per month, use those to estimate what this year will cost for the next 12 months on the new caps - that should give you hopefully reassurance it won't be as high as bulb are estimating, and give you data to give to bulb to say 'hey based on last year I expect to use X kwh and that will cost £Y, so my payments should be £Z per month'

I'd be surprised if the car insurance was £140 a month. Probably a year, although it sounds a little low for that.

If it is, well that is an easy place to start.

IME Bulb are a bugger for trying to increase your Direct Debit payments. They wanted to increase mine when I was nearly £300 in credit. I did the opposite and reduced my payments by £10 a month, you can change it in your online banking.
You really need to look at your car insurance as well, that's a huge amount!