So unsure of how to protect our financial future

[Tobie]

Hi everyone

I am so unsure of which practical actions I should be taking to protect myself and children's financial future so need some real financial advice

But if background on me, 38yrs full time employed and make around £60k. DH is a SAPH (joint decision as we have no wider family support, childcare had been expensive when children younger as we have 2 children very close in age which would have meant 2 in nursery, breakfast and after school care etc) and with my job being unpredictable in terms of not always able to leave work bang on 5pm, we agreed that for stability one of us would stay home and as the higher earner it made sense for this to be me. We had unreliable nanny in the past when we both worked but decided the stress was too much etc

I have progressed in my career in the last few years to a senior management role and DH is honestly really hands on with kids, homework, house etc which has reduced my stress to focus on work

Now the dilemma.... our source of income is very limited at £60k which is shared between us, we own our mortgaged home which has an outstanding mortgage of £208k in London

Kids have a junior ISA each with around £3k in, i now have only about £800 in savings, DH has none

Through work I am contributing to a LGP at half contributions, work also contributes

We get about £3,336 pm salary net. Outgoings around £2k including all bills and on average we split the last £1,300 he takes £500, I take £800 for my own travel to work, food costs and stuff for the kids such as clothes etc, DH's money usually on petrol etc

I used to locum and take home around £4800 pm but obviously wasn't saving for a pension, getting annual leave etc and had limited career progression now I get all the benefits of being permanent but with a significantly lower salary

Ideally I would want to invest for the kids eg get 1 cheap BTL property for my children each, they are still only 10/11yrs so looking for a long term investment over say 10yrs

Their ISA's make only £50 on average a YEAR!!! I had stopped adding money to the accounts based on horror stories of 18yrs olds blowing the money on crap!

I am struggling to add to the savings any how

But I am unsure of what is the best way forwards. Ideally want to help my children with first deposits at 23yrs after uni and the £3k in their ISA's can help with initial uni costs such as a new laptop, clothes for uni, uni halls deposits or car insurance

I am unsure of what is the best wealth development strategy, my initial thoughts are to somehow buy the 2 cheaper flats in the West Midlands as investments, that can be used as their deposits, then the current property we own in London can be sold in 10yrs and we downsize to somewhere cheaper so I can purchase a home outright and be mortgage free, of course long term my children will also inherit the home owned outright later

I hear so much about people inheriting property etc but I had to save as an adult for our deposit which took much longer and do ideally I would like my kids to have an easier time of it all in the future so please advise me of the practical steps I can take

Bump, please respond as my deliberations are keeping me up all night

It's a bit hard to advise, as you don't seem to have any excess monthly income to invest in anything, let alone property?

Are you hoping to cut down your monthly expenditure and save some of the £3,300?

My broker suggested that we could take out a loan to use for deposit against our current property then purchase the property/ies to rent out

I am seriously considering going back to locuming in a less senior role with no pension etc just to have more weekly money

Locuming I would have around £4800 rather than £3,336 but with less stability also in the role

If the DC are now 10/11 can your DH look at retraining to go back into work? I know you are interested in the investment question but having two incomes (and preferably two employers contributing to pensions) will open up greater possibilities.

You have years yet, to sort all this out.
can your husband do even a couple of shifts at a weekend ? Even at minimum wage this would be some extra money
Keep savings in your names, not the kids, as you have already agreed.
don’t buy another property, as being a landlord is no longer easy money, and the tax implications when you sell are also tricky
just save as much as you can, and your husband needs his own pension.
don’t give up a secure job with a pension for agency locum work
And don’t worry, it will all come good as you get older

I don't really understand OP. You admit yourself that you are struggling to save at the moment so how are you intending to maintain the buy to lets? If you take out a loan for the deposit then have a mortgage all you need is a couple of months with a bad tenant and the whole house of cards will tumble.

You would be in a far better position if DH got a job that he could work around school hours and you saved that income.

I’d focus on your own savings, as you currently have a very small amount. I’d also make full pension contributions to your LGPS, not half. You’re losing out on extra money in your pension there.

You need to increase your income. Even with wrap around fees it makes sense for DH to work, a SAHP for 10 / 11 year old is am absolute luxury and one you can't afford if you want to invest.

My DH is now looking for a job but it has been tricky so far as he has been out of the workforce for the best part of 10yrs and employers do not seem to be as sympathetic to men who are SAPH's

I would be nervous about new legislation around capital gains and other landlord responsibilities plus couldn't afford voids in my current situation ( I have been doing some research ) thing is I have got good credit which is under utilised, eg not using credit card with £200 on etc as very much try to live within our means

I worry that whilst i may have the intention to save in my own account for the kids, the reality is that it's always something to pay for and unless there is a bill to pay, saving is on the back burner and I feel that I am being too risk averse which may backfire in the long term

As others say, getting your husband back into employment as your children go to secondary school and become more independent will ease the financial burden off you as clearly it’s weighing pretty heavily on you. I really wouldn’t take on more debt until you have two incomes coming in.

I live in Birmingham, we don't need any more absentee landlords using our communities for wealth extraction thanks.

On a less combative note, we looked at renting our house to SIL but the numbers weren't even close to adding up.

Once you've considered the mortgage, insurance, redecorating, fees to the letting agent any margins are paper thin. BTL isn't a licence to print money any more, you will probably have less money than you do now and be constantly stressed about your tenants.

Has he a degree, could he do a post grad in something to enter a new field, it could achieved relatively quickly.
Don't become a landlord if you can't afford to cover new boilers, tenants not paying for months etc, these are very real risks. You sound like a natural worrier, it wouldn't be for you.

I understand where you're all coming from and DH is looking for a job with ferocity so I am hopeful

I just wanted to ensure that in my own little way that I am doing all I can to improve my children's life chances by investing wherever I can

He does have a degree and is also looking into these options but keen to earn money where possible

Yes I am a natural worrier, but felt that if I was locuming and making £4800 then I could easily cover the voids and have savings that I could use for repairs etc

I really don't know why I went for the promotion any more, work wise I am learning lots and it's nice to have the title but with the long commute and cost of this I feel like my quality of life has declined

I'm really not sure buying another property to rent out is the answer. I don't think you can afford it and it would cause you nothing but serious stress. I would think about nothing apart from DH being in employment at this point. There is zero reason with kids that age to have a full time stay at home parent.

I'm guessing you're a SW, you could likely get locum stuff working remotely removing the commute completely, but do you really want to give up the pension, you'd get a lovely lump sum and be able to help dc with that. Plus what happens if you become unwell, long term for example, and lose all your sick pay etc.

Even if DH could get a 40k job after taxes etc it'd be about £1800 a month coming in, much better than making yourself sick with worry as a (poor) landlord.

I was thinking she’s an Ed Psych given the figures, but I might be wrong.

Don’t do a BTL, keep your job, invest in your pension. When your DH gets a job it’ll all come good.

I don't think you have sufficient savings to have a buy to let. You need to have access to money to pay for maintenance, repairs, insurance and to cover periods without rent.

Yes in the field of SW for my sins!

Only office based 2x a week, not a bad role all in all, just the pay drop is hard on 1 income

I take everyone's advice to stay put and keep investing in my pension, I have at least 30+ years of working life left hence why I am making half contributions rather than the full one as at least I have an additional £200 or so I assume net pay

Quick question about pension can you draw down the money early to help your children to get on the property ladder? If I took money at 47yrs to help them out then what happens to my empty pension pot? Do I start from scratch until I am able to retire at say 65-68yrs depending on the policy at that time

I genuinely don't know what to do as I am so inexperienced with this

Thank you this is so reassuring, I am just trying my best and hope that everything will work out

He needs to get a job

I know! He is looking but I am also parallel planning

For financial purposes I consider myself to be a single parent so have always planned in this way