Rate my financial situation

[Juniperberry55]

Everything finance wise on Mumsnet seems to be very polarised, either those on £100k+ income with tens of thousands in savings and a holiday home, or not having 2 pennies to rub together

I'm quite curious to see how people would rate my financial situation on average for my age

So I'm 33, live alone
I own a house worth roughly £220k with around £45k mortgage left to pay
Around £14k in debt on 0% credit cards and a low interest loan all due to be paid off in around 2 years
Income around £42k a year
Almost no money in savings, currently trying to build up an emergency fund of a couple of months pay
£0 retirement

I'm guessing there will be the odd comment about this being a stealth post. It is not, I am in debt, I think my finances are not great in some areas, in others I think they're not too bad

Score me 0-10 on how you think my financial situation is for my age 0=awful 5= average 10=Jeff bazos level 😂

OP, apologies if it's obvious, but what kind of pensions are we talking about here? State? Workplace? Other (private?)

I'm 66 and have both the full state pension for a single woman and some disappointingly small workplace pensions. Nothing else. Do you have the kind of job where you pay your NI contributions and plan to accumulate 35 years' worth? That'll help. Plus, as the PP says, "You mention company pension scheme. Does that mean you are effectively missing out on “free money” by not joining now?"

Here's a useful link: "For many people, the State Pension is only part of their retirement income. For example, they may also have money from a workplace pension, other pension and/or earnings." Good luck.

https://www.gov.uk/government/publications/your-new-state-pension-explained/your-state-pension-explained

Because your ltv is small in terms of mortgage can you consolidate your debt onto the mortgage and reduce interest payments that way ?

@GasPanic Why on earth would you transfer unsecured credit card debt and loans on low rates to secured mortgage debt?

[Edited to say: I hadn't seen that Jellycat said the same!]

State pension will be fine I pay national insurance and have done at all jobs since I was 17 so by the time I hit retirement age I'll be entitled to the state pension.
When I say I have no pension I mean I'm not paying into a pension fund where my employer would also contribute. This is in addition to state pension. I plan on starting contributing when I am 35 debt free and have an emergency fund

You don't seem to fully understand it though, even delaying at 33 to 35 won't just have a 2 year subtraction from the end amount value. There are calculators out there OP which show how much more you would have to pay into a pension at different ages to get the same income. It's sobering! Anyway your take home is what circa £2750 a month? Smallish mortgage, after bills there's still plenty to put towards improving your situation quickly.

Yep not planning on consolidating onto a mortgage when I get get it paid on 0% credit cards and low interest loan over the next 2 years, I don't see the point tbh. Also my mortgage rate is very low in comparison to today's rates and I don't want that changing

About 3. You have a reasonable salary but a lot of debt. Why?

@Juniperberry55 how do you feel about your financial situation? It sounds like you have a solid plan. Does that align with your future goals - both financial and non-financial?

In terms of pension, I won't echo the others as although it was the first thing I thought too, the standard personal finance flowchart (so often referenced) suggests building up an emergency fund first too.

The only thing I will say is given you are single and are worried about what could happen if you lose your job, you may want to look into critical illness and income protection insurances. They can provide an additional level of comfort for minimal expense and if the worst happens you'll be very glad you did it.

There's also lots of people who haven't made pension provisions living into a ripe old age in miserable poverty.

The reason not to consolidate and add to your mortgage is that if you fall on hard times you can negotiate with the credit card companies, freeze interest or enter a debt management plan. If you add it to your mortgage and fall on hard times, they’ll take your house. Even if your mortgage rate was less than your credit card rate you’d be very foolish to consolidate on your mortgage unless there was literally no other option.

I'm aware how pensions work, the earlier you contribute the better, it compounds, I get it
But like I said I am prioritising being in a secure financial position over the next couple of years over a bit of extra income at retirement.
I am paying £500 mortgage £600 debt so that takes my income down to £1650 before I've paid for bills and groceries and savings(emergency fund). I currently only have £600 in a savings account, I am prioritising getting this upto a level that would mean I don't immediately end up in a situation I can't pay bills if I lose my job. I will start my pension contributions in about 2 years, it can then compound for the next 33 years and I may even be able to invest more elsewhere once mortgage is paid off etc

Yep like I said, no plan to consolidate onto my mortgage

Your mortgage is £500 a month with a take-home of £2800 - you need to find out where the rest is going. £2300 minus bills excluding mortgage is over £500 a week with nothing to show for it.

You have a great amount of equity.

Cc debt, no pension and no savings need to be addressed as a priority

Oh well fingers crossed OP!

Good news about the State Pension!

I had to top up my NI contributions a tiny bit before my pension kicked in this year. But I was thrilled and proud to get it, and over £900 a month with a paid off mortgage certainly helps.

But like peeps say, get yourself onto a workplace pension ASAP.

My income is £2712 to be exact after tax, no and student loan deductions
£500 mortgage
£600 debt repayments
£130 council tax
£350 budgeted for groceries, cleaning supplies etc
£150 Petrol/trains/parking for work
£20 house insurance (monthly equivalent paid yearly)
£35 - car insurance and tax (paid yearly- monthly equivalent)
£30 Water
£120 Gas and electric
£120 cat food and insurance
TV/broadband/music streaming - £100
£150 fun money (yes I could technically never leave the house except for work but I live alone and I like to socialise occasionally)
£300 savings
Around £200-250 buffer in case of any unexpected costs that month, usually a trip to the vet (no point in claiming unless over the excess cost) or some small repair on house, if I do have any left over it can go in my savings

Noone can afford to pay into a pension if they think too hard about it, you just have to bite the bullet and do it. You need £300k in a pension just to get £12k a year roughly, I would start now.

I've listed my expenses and income above. What would you drop to pay into the pension in reality

I would say £350 for groceries for 1 person could be reduced if you really wanted to especially as it doesn’t include cat food or eating out.

Because generally secured debt is cheaper to service, so if you are intending to pay it back it makes more sense. I missed the bit where it was 0% interest.

I’d also put any left over money into paying down debt, you’ll be paying directly off the capital amount, and it’ll be gone much quicker.

I would probably save £200 and put the other £100 into a work pension. Personally I feel more comfortable.knowing i am saving something so I can retire at 62, I don't want to work till I drop.

It is personal.choice though, its all saving just a different way of doing it.

Seen a lot worse! I’d try to start putting something into your pension even if it’s just a little bit, as your missing out on the growth and compound interest.

My credit cards are 0% and the loan is 3% my savings is a bit higher than that, so I'd be better off saving and possibly paying off a bigger lump sum later

How much would you need to pay into your pension for your employer to contribute? It is just that if it were say £100 it would be easier to find the savings in your budget, but £500 less so.

I think it's 7% pretax so about £250, even if 20% tax taken off it's still being about £200 off my pay which would cripple me being able to build my emergency fund as I'd only be able to save about £100 a month, so it'd take me about 2 years to save 1 months pay for emergencies which is why I'm delaying joining the pension until the emergency fund is sorted