How much do you need to live in London? (I think I have enough!)

[Ethicaldebacle]

I've asked before about moving to London and basically everyone agreed it was a good idea, but we didn't really touch the financial aspect.

I posted about my pension on Reddit (because I think I have a fairly solid plan all things considered) but everybody got fixated about not being able to afford to live in London

So housing and transport costs aside, (because I've done that calculation already), how much do you spend a month?

We shop at Lidl for the most part, and go out twice a month. I don't go to the salon or anything like that, and the gym is out peloton (so cheaper as it's for both). One car.

We're talking about Z3, one DC in secondary school.

For the sake of this conversation we have £7k every month to play around after housing and travel cards.

Less fashionable areas - it won't be the most attractive house but it can be done

www.rightmove.co.uk/properties/159933386?utm_campaign=property-details&utm_content=buying&utm_medium=sharing&utm_source=copytoclipboard#/&channel=RES_BUY

Op currently earns 70/80k, her DH earns minimum wage.
They have a £200 mortgage and plan to buy a smaller house in London for a repayment of 1500-1800per month.
Have you even considered tax OP? You’re hoping your move to London would give you a £50k salary bump but that’s almost entirely cancelled out by your £1800 mortgage payment.
You’re then saying you and your DH would be paying 50% into your pension after the London move which leaves hardly anything left over. You will need to contribute significantly if your kids are going to uni in a couple of years.

TLDR OP doesn’t have £7k per month after housing which is why Reddit commented that she can’t afford to move to London.

£7k is loads. I live in London and taking out housing costs and transport all that’s left is bills, which cost the same in London as out of London and daily spending.

You can cut non necessities as you want to. If you only cook and shop from supermarkets vs eating at restaurants and cafes then it’ll cost the same as anywhere else. Ditto with using free parks and libraries instead of costly activities - in fact there are more free museums in London than elsewhere.

The higher costs in London are for housing/rent, commuting costs, alcohol, eating out and leisure activities. Everything else is pretty much the same as elsewhere.

Our current outgoings are £1800. (Housing not included). We're a family of 6 and live OK from a day to day perspective.
Our day to day will then be of only 3. Yes London is more expensive but not to the extent that even when putting a SUBSTANTIAL amount into the mortgage we'll be fine.

Even then if the higher salary cancels the mortgage out, our left over would be exactly the same as we currently have.

So if we can live where we live why couldn't we live anywhere else? The amounts that need to be out into the pension would be the same, and are tax efficient enough to balance out the higher tax rate.

But on Reddit you’ve been posting that you and your husband would begin contributing 50% into your pensions by the time you’re in London?
So your outgoings wouldn’t be exactly the same and you would have significantly less take home than you do now.

We're a family of 6

4 dc!

Far too much of this is based of what ifs

@Ethicaldebacle if you really want to move to London, just start applying for jobs in London. If you get a good job then move to London and put the current house on the market. People move ALL THE TIME!. it really isn't a problem. Even the 100k you earn right now is enough because your mortgage won't be extremely high. Unless your kids are in private school?

The reality is that we need to start paying into our pension.

According to the Scottish Widows calculator with our current pot + current contributions we'll get £28.5k per year.

By putting £400 each month on top (totally doable), we'll get to the £43k per year that the retirement living standards calculated we'll need.

Maybe that calculator is being extremely optimistic that I don't know.

According to Aviva we need to put in £600 extra on top (again super doable!)

By putting £400 each month on top (totally doable), we'll get to the £43k per year that the retirement living standards calculated we'll need.

How does this work? You would need a pot of 1m surely & currently have 50k!

Well that's what it says!

But that says 1.2k a month, I don't realise you already paid £800.

Presumably that is including the state pension in the calculations? Personally I wouldn't bank on that, the age will increase or some form of means testing.

You need to front load it much more imo whilst you have the higher salary, you may not still be working full time in your 60s or earning that.

No, no state pension included, and yes we'll put in more as it's tax efficient and we've finished our "build" base (and why the pensions have not been a priority).

All I'm saying is that it's affordable/doable.

To the PP who mentioned it, of course we'll move once I get the job! ( And not before).

Sorry if I’m missing something but you are a family of 6 and want to do this when your kids have left school. Are you expecting them to move out straight away then? Is that realistic given the price of renting/buying these days!

That is difficult to know as for two their family will remain in Cornwall (as in their DM) and my ExH plans to move back to London too (or Birmingham), so who know what they choose to do.

£7k after bills? No way, you'll starve to death in London.

Live ( survive ) or good lifestyle are two different things. Our lifestyle and salary have been reduced little by little with the COL in London. Which is a city that has always being a rip off anyway. ( worse quality than many countries in Europe) There are many articles on this and the eroding of the middle class. Even if you are one of those to stick to a budget and live frugal. Taxes added on more expensive stuff than the rest of the country. Expected to be paid like if we are cash cows. ( private school and the taxes that Sadiq Khan inflicts on us for instance ) You may be able to live the same lifestyle but once you get to have to repair or to upgrade your house you will be in for a shock.

thanks for the details about your work and current salary position

I’m really not a personal finance expert and don’t pretend to be so I’ll just reflect on a couple of other things that stick out.

why is DH on NMW and why can’t he move to a more lucrative role? Is his work location dependent? Why does it appear to be all on you to make your life comfortable now and in the future? If he is 45 now he still has at least 22 working years left - I’d hope in that space of time he would be able to really improve his earning power

You seem to really want this move (and not really because you think it will be the best financially but because “everything I like happens in London” , and to want it soon) But also talk about waiting for some of your children to leave home. If you want it then can’t you make it happen sooner? You get one life and it is for living. Schools (is a mixed bag) are not generally of a poor standard and there is certainly a wide choice, even if your children are into specialist subjects.

I don’t know why your ambitions are set at what feel like a low level. Why do you want to retire as a VP? I know it’s different from firm to firm and person to person but that doesn’t sound very senior in the companies I’m more familiar with. You current have at least 27 years left. You seem to be talking about just 1 promotion in this time? You’re less than half way through your career at 40. Still in the build phase even.

Also finally why are you so invested in “being right” vs the redditors (and many on this thread)? It’s your life, you get to make the choices and need to live with the consequences. Perhaps it’s time to just make it happen and bugger what others think?

good luck with your choice - you have time on your side but it is wise to front load pension payments when you can (and find an employer who offered a good pension match scheme!)

Thanks for the very thoughtful response.

The reality is that he doesn't want to study or get qualified in anything. So he knows his life will always be retail. I've tried to encourage him to study something anything! Even one fo those getting trained on the job roles at the NHS and nothing. He never aspired to be any better off than a tax credits or UC top ups.

BTW VP in my industry is just below C-suite. So a VP (in my line of work it's just below the Chief Customer Officer). Some will have senior VPs , but it's not that common.

We can't move any sooner because of custody arrangements. It would mean neither of us seeing our other children that often.

Of course if I'm made redundant we'd move, but that has always been the last option.

I moved to London for better job opportunities and so did most of my friends here. Once you remove housing costs from the picture, it's not really more expensive to live here than anywhere else I've lived. There are places to eat at literally every price point, and the same for supermarkets and shopping. The public transport is excellent and runs late, so I only need a taxi about twice a year. You just need to do some research and find an area that suits you, and has decent transport links to where you're likely to need it.
The biggest problem if you have a school-aged child is finding somewhere in the catchment of a school that you would want them to attend, that has space.

We like Clapham, but in order to he close to Norfolk (where MIL lives) we might have to choose the NE

Wanstead or Epping are nice. I was in Westfield Halls of residence up near there for a while.

Your other option for being able to get to East Anglia efficiently is to base yourself in the gritty East End near the start of the M11 extension. Wouldn’t appeal to me, though.

Otherwise, if you want to be central, Clapham is as good as anywhere. It’s only a couple of miles from Thames, and a lovely area with all amenities. Crossing London by car is very easy if you do it late night or very early morning. Lavender Hill, St John’s Hill, Northcote Road, Battersea Bridge Road and Betwixt the commons are all worth looking at nearby, too. Just avoid the strip between Clapham Jinction and the river.

If you want to buy a house for under £1m, I wouldn't start with Clapham TBH.

Oh missed the budget. Leafy bits of NE London might be the best plan. Look for the nicest places along the and of the central line. Woodford is also good (but, like Wanstead, in a grammar area).

This looks ok to us but obviously we don't know the areas that well.

www.rightmove.co.uk/properties/155179064