To be really concerned by mine and DH’s finances at age 36??

[ThatNoisyExpert]

Here is a breakdown of our finances.

Lifetime ISA = £22,500
Stocks and shares ISA = £1,000
My private pension = £5,000
DH has a military pension

Credit card debt = £300

We don’t own a home.

Im really worried about the future as all of our family & friends are in their own homes now. I feel like we have failed. We can’t buy where we are because prices are so ridiculously high and we can’t use the bonus that’s in the lifetime ISA if we buy a property and rent it out.

We have two children and really hoped to have a third, but have decided we can’t afford to.

AIBU to think we have left everything too late? It’s hard feeling like the only ones who haven’t got our shit together.

It’s not really important what you have saved - you don’t mention income - this is more important IMO because change happens from now onwards so it’s worth sitting down and doing a budget and saving what you can. Obviously if you can find a way to buy property in the UK it’s often a good investment and you are accumulating an asset rather than paying rent; maybe sit down and decide what your goals are and go from there? Ultimately if you want to save you need to be able to afford it so first think to do is to redo your monthly budget and then save hard into one or two pots and work towards your goals. You’ve got plenty of time!

Thanks for replying @babyproblems

Our combined income is £52000. We had £5,000 more saved than what we now have but just had a recent huge expense. The other problem is, I’ve just had a drop in income due to personal circumstances, so I’m now earning a pittance.

I think it would be great if you could get on the property ladder by 40 if you can. Is that affordable where you live?

It’ll be very hard. My personal reasons for reduced income are temporary, so I’m hoping that once that changes (probably in around a year), I can earn a little more. I am a low earner, but every penny extra I earn can be saved.

You're in a far better position than many. You have pretty much zero debt, £23.5k in savings and a military pension which is not to be sniffed at.

Can you move somewhere more affordable with a view to buying in 18 months after your earnings have gone up?

Why is your work pension so low?
I’m early 30s, not a particularly high earner and stupidly opted out of my pension during one maternity leave and didn’t sign up for the first few years of work and it’s still around 40k. Personally I’m aware I now need to focus on slowly increasing my contribution to get to about 10% over the next 2-3 years.

Do you not work much?
That will also factor in to why your deposit is too low to buy.

The reality is most people buy when both parts of the couple are working full time and before kids.

I was a stay at home mum whilst our children were young, as childcare costs whilst having no family support as a trailing military spouse would have cost me more than I’d have earned.

I also worked whilst we lived overseas but there was no employer pension scheme available to me. That is going back a number of years now, and pension wasn’t so far up my priority list back then. In my last job (also overseas) I paid into a private pension scheme which is where the £5k has come from. I know it’s really terribly low, but I have to start somewhere. I am now working in a new job, but like I said, I’m on very low hours due to personal reasons, but am paying into a pension scheme and this will increase when I increase hours as soon as I can.

What is your living situation? HA or private rent? If it’s HA then I would focus on your pension and regular savings. Home ownership isn’t that important if you are in a secure rental.

Is your partner still in the military?

What would you need your income to be to buy where you are?

E.g. if you have 2 children and want to buy a 3 bedroom house (or would you be better off looking at 2 beds?) then if you need £300k while that is a crazy amount of money, let's say you save for another 3 years.

If you can manage to get your LISA up to say £32k (so £10k less the bonus which is 25% of what you save, so x0.8 that is 8k over 3 years). So 2.7k per year. Which is a good chunk of money but if that's not doable then the unexpected costs that come with owning a house might be pretty risky.

If at the moment you aren't earning much and in 3 years you could be on full time minimum wage that would be about 24k, so potentially an income of £65k or so.

So that's then a maximum mortgage of £290k, at 4.5x income, plus your £32k LISA and you'd be able to afford a 300k house.

So yes it's scary and yes it's a lot of hard work, and it would be a big old mortgage. But actually it might not be totally unmanageable?

Save what you can now and use the 25% of DHs pension to put a deposit down when he retires. Or not sure if it's still a thing but we used the advancement of pay to secure our house deposit via the army but this was 15 years ago.

Do you have to live where you live? (Is it military related?)

We moved 200 miles north and were able to buy a much bigger house for less money than the one we sold.

We are in subsidised military accommodation. Good for now, but obviously dependent on my husband being in the armed forces.

Are you due to inherit £500k+ one day?

Thats what a lot of older millennials and Gen Xers are banking on.

Throw everything at your savings - you’re saving a fortune in rent - save it!

Wouldbedriver, shifting sands that one pp,that cash will pay a few years care home fees.

We are on one income due to maternity etc you are in a much better position than we are. Try and grit your teeth if you can, it’s not always going to be like this. I like listening to Dave Ramsey, makes me feel better about my situation or I learn a lot.

I'm not on the property ladder and never will be unless something changes dramatically. It is what it is.

I’m 47 and still haven’t bought due to living in the South East and am a single parent. My plan is to move back north in 18 months when my youngest goes to uni and get it paid off before retirement. Fortunately I have a good pension and a lump sum I will receive on retirement will clear any remaining mortgage if not paid off by then. It does worry me I don’t own yet, I certainly am years off the luxury of no mortgage and simply because I live in the south east. I’d have moved years ago if it wasn’t for the good schools my DC were in

At 36, I wouldn't accept being a low earner forever more.

You have plenty of time to build a proper career for yourself.

What are your qualifications and interests?

We bought our house once my husband left the armed forces using his lump sum payout, and we were in our early forties. We had our own property in early on in our marriage but renting it out whilst moving around was hard work, so we sold it.

OP you've fallen into the trap many military families do and enjoyed the subsided housing without planning the future fully, you are not alone, in fact I'd say most military families are like this. When our kids were young we utilised the cheap housing to suck up the horrific childcare costs to keep my career moving (and it was bloody hard on our own I will tell you) but my earnings now far outweigh DH, we then used FHTB to get onto the property ladder when we got out the early childcare years (especially helped by the wraparound childcare scheme) but it took a lot of discipline to essentially double our rent to paying a mortgage, so many of DH's colleagues were driving lovely brand new cars and going on holiday but we knew we needed to not fall into the trap.

The military offers a lot to enable you to set yourselves set up financially: FHTB, DH gets most of his commute paid for via home to duty, they pay our wraparound care, he doesn't pay any pension contributions. Even my HM forces railcard saves us a massive chunk for my commute. Like for like he'd need a much bigger package out of the military. There's a lot more support out there for your career too these days.

You need a plan. How much longer is he staying in for? How often does he post? What are your career plans? Have you triple checked if the lifetime ISA can't be used if renting it out because there are quite often exemptions for military as there were in the previous HTB schemes. He will get a lump sum when he leaves so factor that in your plan, but then you've got to consider what your incomes will be for raising a mortgage if you wait until you leave.

1. You don’t say how big your DH’s military pension is. But this is really important! Army pensions are very generous. If you’re 36 and he’s a similar age, and he’s been in the military since leaving education, he’s probably got 15+ years of service, which means a significant entitlement. I can do the detailed maths for you if you like, but for now just realise that as a family your pension situation is probably better than 95% of your non-military peers.
2. You have (nearly) no debt. This is huge! Most people your age are carrying significant debt - not all of it of the useful mortgage kind.
3. You’re living in secure, subsidised housing. After home ownership, this is probably the best position to be in. Far better than a private rental.
4. You’re a family with two married wage earners. Financially speaking, this is the ideal.

So I wouldn’t despair. You sound like you’re doing really well to me. Focus on getting back into work yourself when you can, and building up those savings. When DH leaves the Army you may be entitled to some kind of resettlement grant, and that might be a great opportunity to put down a deposit on a house.

Yes sorry I just wanted to say following on from the previous poster I certainly don't think you're in a bad situation and will be in better than most! It's just the military whilst flinging a lot of obstacles also has a means to really set yourselves up financially if you plan and don't fall into the trap, that's my only point really, but it's not too late. It's just hard to advise without knowing what your plan is in regards to postings, how much longer he has, kids ages, your career path etc.

When we were in this situation I tried to save the difference between the rent we were paying and what a mortgage would have cost on civvy street