Rate my finances and let me know where I should improve

[Cherriesandapples1]

I've posted about my finances before, had debt from various unavoidable costs rather than buying too many nice things unfortunately. I've spent the last couple of years trying to change my financial situation and had quite a big change around in my finances the last 12 months or so.
I'm interested to see how people would rate my financial situation on average for my age and so I can compare it to what people were saying previously. Also if there's anything you would do to improve
I'm 34, live alone
I own a house worth roughly £220k with around £60k mortgage and 12 years left to pay
No other debt anymore thank god
Income around £44k a year gross
About £8.5k in savings
Around £1k in a&s ISA.
Just joined pension fund recently, luckily decent Defined Benefit pension so should be able to catch up a little on retirement fairly quickly hopefully

Score me 0-10 on how you think my financial situation is for my age and what would you do to improve further. I've spent the last few years with debt and now I've got some savings behind me I'm trying to work out how I'm doing now and what I should be looking to improve

chuck as much as you can in your pension op, because you get the accumulation the earlier you start, which you can do very little about the later you leave it. Time just won’t be on your side! I speak from experience. 🥰 Well done for clearing your debt; I bet that feels good 💕

forgot to score…7.5? (pension!)

8/10

genuinely 8/10 maybe 10/10 depending on the defined benefit pension.

Thank you I've been debating whether to open a sipp maybe, I won't get any employer contributions with any additional pension payments with work, just worry about locking more money away which I can't access until 57 (maybe older depending on government moving the goal posts) or whether to get the s&s ISA bigger first which isn't age restricted

I feel like I definitely can't claim a 10/10 it is a decent pension but I've literally just joined the last couple months, so not worth much yet

Being mortgage free at 46 is very good for a millennial. You have a lot of equity in your house.

id query why you have such high cash savings vs S&S isa - and I’d be loading any spare money into the latter.

I wanted a 3 month emergency fund before putting any money into the s& ISA mainly because single income household so no-one to fall back on, but also my car is old as anything and if it decides to die on me I can get a cheap runaround without dipping into the s&s ISA. So just a bit of a safety net

I would suggest you consider overpayments on your mortgage, but you need to weigh it up against the returns you’d get in savings so it all depends on your mortgage rate and whether it allows over payments.

I’d work out how much you need saved in cash. 6 months expenses, maybe slightly more as only you in the house (no other adult to help out in event of redundancy/sickness etc)? Then when I got to that number I’d be putting more into S&S ISA

But you’d potentially get 35 years worth ?

My savings account interest are basically identical at the moment, mortgage rates fixed for the next 3 years, hoping savings interest might go up a little now mortgage rates are on the rise, but I might be being optimistic

Luckily sick pay with work is 6 months full pay, 6 months half pay
Redundancy I think would be about £10k maybe . So I think 3 months emergency fund is fairly ok risk wise, but I'm conscious of my car dying on me at some point and maybe saving a bit more for that happening

Potentially, I suppose never guaranteed with health problems or if I need to change jobs or get made redundant. I definitely feel behind on pension at the moment

Can you pay additional voluntary contributions to your DB pension? Likely to be more valuable than starting a SIPP.

Focus on maximising pension and S&S ISAs rather than overpaying on the mortgage. Much more tax efficient and you have a long investment horizon. Always check fees and charges - use a low cost provider. E.g. AJ Bell.

Does your defined pension plan include a disability pension provision? Most of them do so you’d be covered in the event of very poor health.

I have asked work about avcs, they wouldn't contribute any money towards it and it would be defined contribution with roughly 1% management fees, so not sure if very low cost sipp would be better. Also a bit worried if they link it to state pension age like the DB pension. I think they said I would get tax reduction but not NI reduction with avcs

It does have provision for medical retirement, so they wouldn't apply reductions to the payments if I retired early in that case, but I imagine you'd need to be basically terminally ill

Give a read of what the criteria are. Medical retirement usually includes chronic illness or disability by injury/accident.

I guess if I've got about £500 a month on average how would people allocate it. Would you chuck it all at stock and shares ISA, all into a avcs/sipp, get my cash savings higher or split between 2/3 of those

I will do, the amount of information on the pension is insane to try get your head around. I've not really thought about it much before because I couldn't afford to pay in ,so just thought of it as something to worry about later

Very behind on pension.
Rest is looking okay but I would ensure I had 3 months expenses in emergency fund if in a couple and 6 months if single.
Remember you can use a SIPP to catch yourself up on pension. You'll find it very hard to catch up on growth your pension would have made in your 20s without putting extra into a sipp now. Defined benefit pensions are not as good as people imagine they are.

My db after 1 year of contributing should be worth a guaranteed £1k per year in retirement with added inflation, so it's not a bad one but definitely behind, will feel a bit better after a few years of contributing I think
Would you put any spare cash into the sipp or would you spread between savings/s&s ISA and sipp

Anyone's first priority for "spare cash" should be an emergency "oh shit I've lost my job" fund. It should be an oxygen tank of however many month's living expenses you would feel most comfortable having. For some that is three months, others sleep better with nine months. Bear in mind that you would presumably be pivoting straight to a "crisis budget" for those months not your usual spending habits. (you should also have that crisis budget mapped out.) This money is for job loss and job loss only!

Once you have a tidy "oh shit" fund - do your misc pots
Map out savings pots for other stuff you know is going to come up in future - boiler service, 4x new car tyres you'll need them at some point, white goods replacement fund, couple of hundred for plumber/sparky call out fees... garden fences old? get saving they'll want doing before you move etc etc

Then once that is done
Stocks and shares ISA... for the long haul. Like... really long haul... 15+ years.
Or company pension. Not cash basically.

That's my take....

My cash savings is about 3-4 months worth of an oh shit I've lost my job fund, which I think is okay, as long as I'm made redundant and not fired , of I was made redundant I'd get around the same amount again as redundancy
I'm tempted to maybe split the spare £500 into 3 separate payments, so maybe £200 for short term savings for small things breaking so I don't dip into the proper emergency fund, £200 into s&s ISA and £100 into sipp, but I don't know if that's splitting it a bit thin and not achieving much anywhere