Need some general advice on how to improve savings

[Sleepisbetterthanchocolate]

Hi, I’ve NC’d for this as really feel quite embarrassed to be asking this.

DH and I now earn £100k combined but previously I’ve had to give up working (for 12 years) to care for our DS who was ill. DS at about 80% better but doesn’t want mum around him all the time now as he’s 19. I’ve been back to work for a few years.

We spent all our savings whilst I wasn’t working and now, early fifties, want to restart our retirement fund. We both have a pension but both are only a few years old. I have a small pot I can access at 55 but I plan to save that for DS.
We don’t own property anymore. Our savings are pitiful. Bills are paid.
We pay at least £1k each month for DS that covers travel, healthcare etc. He isn’t able to work at the moment but does when he can.

I’m a bit overwhelmed at where to start to build up reserves for us.
What would you do? Where would you start?
Is it worth just finding a high interest savings account and putting every spare penny into that? Any thoughts welcome but please be kind.

TIA

To start working out what you'll need in retirement, checking out your NI record and state pension entitlement is a good place to start, as you can check that you've received credits for caring etc. and are on track for full state pension.

You might find it helpful to work out how much you think you'll need in retirement and then that gives you a goal. You can find lots of articles and calculators online for working that out and then you can factor in your circumstances (e.g. if you need to rent, supporting DS etc.). Working out the difference between your existing pension provision (state and occupational) and your requirement will give you a goal to work towards.

You might find that the pension pot you need to build to receive the income you need in retirement is unachievable, in which case one other way you could look at increasing your pension provision drastically would be for one or both of you to look for a job with a defined benefit pension (e.g. Civil Service, NHS, University Staff) if you don't have one already.

If you give more specifics people might be able to help more, but one key advice would be to start putting your savings into a pension, rather than a normal savings account, so you can get the tax benefits!

Also, check if either of your occupational pensions offer salary sacrifice or pension matching schemes or similar, then you can contribute additional savings to your pension through work and get more for your money.

You need to do some reading about retirement and what you need, Which have some advice about how much income you need for a basic, comfortable and luxurious retirement. Helps to know what you are aiming for, and you then work backwards

Also read MoneySaving expert forums as they have some fabulous advice about retirement planning.
you may like the frugal living threads to maximise savings and minimise outgoings

Do you want to buy a house at some point, as the deposit for that needs to be in accessible accounts ie not pension, work out how much deposit you need and then how long it will take to save this money. Add on a bit for stamp duty and costs

Then maximise pension.

And check on government Gateway your NI contributions are up to date so yo7 get max state pension. 10k a year is a lot of money

This ukpersonal.finance/flowchart/ can help you work through what you need to do, and in what order.

Moneysaving Expert is good for advice on setting a budget, cutting costs and finding the best savings account.

www.moneysavingexpert.com/banking/budget-planning/

If your DS is not capable of work, is he entitled to benefits? Is he able to access education, training or other help that will prepare him to be able to work as his health improves?

What are these travel and healthcare costs? £1000 a month sounds like a lot, does that include his food, mobile etc?

Do you think you'll be able to buy again in the future? Do you know how much spare money you have after basic costs? Depending on how much your rent etc is, with that income, a few years of frugal living could mean you could save enough to buy a small house outright in many areas of the country, meaning you won't need to rent in retirement - that would be a good option if you don't live in a more expensive area.

Was wondering also about your ds accessing all benefits he is entitled to due to his ongoing illness and inability to work. Does he need 1000 a month on top of that which seems a lot. In lreland if you have a disability that prevents you from working you can sometimes get a free travel card along with about 1, 000 a month in benefits plus a medical card to cover general doctors visits/ pharmacy. Can he get all that in the UK?
My biggest tip is save first on payday. Don't wait until the end of the month to see what's left over. Presuming your dh earns 70,000 and you 30,000 as you were out of work you should be able to save all your salary into pensions or savings. Does both work places match your own pension contributions?
Could your ds work from home part time on something he could do at his own pace?
Speaking to a financial advisor would be helpful at this stage.

Just wanted to thank everyone for taking the time to reply. You’ve really helped so thank you.

Forgive me for being late to this one but I only just saw it. I wanted to ask if you have considered how you will house yourselves post retirement? I ask as one of my parents has found themselves retired and renting, and their private pension has simply reduced the housing benefit bill, so they still only have the basic state pension to live on. It’s the lower amount because of when they retired, but even if it was the higher amount, £850ish a month for all bills and living costs doesn’t go far these days, especially if you want to be able to financially help your DS. On £100k between you, if one of you is on more than £50k it makes sense for all their earnings above that to go into pension for the tax savings. Then I would consider what mortgage you can get / afford to pay off over the next 10 years, to avoid having rent to pay in retirement. For the next two years I would if needs be focus on saving for a deposit and legal fees etc so could buy by 58 (assuming retirement at 68). If buying isn’t possible then I wouldn’t bother with pension beyind what I’ve mentioned, as something for your DS to inherit (but no retirement income for you alas). I’d be putting any savings beyond the limit for HB (can’t remember what this is, its a few thousand) into DS’s savings account, again up to whatever maximum they can have if in benefits. Beyond that (again if no chance of buying a home) I’d be making sure to have lots of warm clothes, good quality shoes, all the expensive things that are important but will be hard to afford in retirement.