Some advice please. Help me plan for the future!

[MoneyWorries5]

DH and I are both 35. He is in the armed forces and will qualify for his full army pension in about 5 years time. Im not entirely sure what this entails, but I believe it’s a payout of about £60k when he leaves and a small pension that he can access immediately, which increases when he gets older (maybe around state pension age).

Our other finances are as follows:

Lifetime ISA: £20,000
Private pension (mine): £3,500
Current accounts and quick access savings: £4.000
Credit card: £3,000 (balance paid off each month and money spent on it again).

We own 2 cars outright. One is worth about £1,500 and the other about £7,000.

We don’t own a property and live in army housing.

Im just worried that our finances are horrendous for our age. We don’t own a house, but don’t know where we will live so it’s tricky.

Is there anything we should be doing differently with our money than what we are doing now? Should we be buying a property to rent out? If we do, we will lose the government bonus in our lifetime ISA which is already £4,000.

I’d be really grateful for any feedback or advice. Thanks.

I don't think you have enough to retire at 40 !

so one or both of you will need to work

The 20k savings would be 10% deposit on a house of 200k - so that should be possible if you avoid the expensive areas and don't look for a large detached in a posh area

At 5.5% that would be mortgae payments of 1.1k a month
Same again for general food, bills and the like
So if you were both earning 20k

Are you working now ?

No plans to retire for a very long time 😅😅

I work and earn only 12k per annum. Im also a student so hoping to increase my earnings once my degree is completed. DH will find work after leaving the army, but it’s impossible to know what he will earn. The uncertainty worries me.

Your husband should join the Armed Forces Pension Society which will give him all the details he needs on what his pension will be. They also run roadshows which he could attend.

Oh thank you @ZoeyBartlett. I’ll look into that.

Also, just to add, the £4,000 government bonus in our Lifetime ISA is included in the £20,000 figure.

Anyone?

So much rests on awaiting your dh's retirement from the Army it sounds like you have anxiety due to being in limbo, as the future beyond 5 years is so uncertain (this is how I'd feel anyway!).

In your shoes, I wouldn't be buying any property now. I would be aiming all of my thoughts and aims at that 5 year marker and would plan to buy a property then, using all of dh's lump sum and your lifetime ISA as a hefty deposit.

In the meantime i'd:

• Focus on finishing my degree and do a lot of research into my possible career options.
• Definitely get more info on the exact terms of DH's retirement and pension. What he'll get, when he'll get it - but also on your housing situation (sorry you may already know but I have no idea about Army housing - I'd want to know when we'd be expected to leave etc).
• Encourage your dh to start thinking about what he'd like to do in 5 years. It doesn't have to be heavy discussions but it's never too early for him to start thinking about it.
• Start seriously thinking about where you'd like to settle. Plan some weekend trips if possible. Look at house prices in the areas and think about how much you'd want to pay for a house/mortgage, remembering you'll have a hefty £80k plus deposit. Once you've settled on an area (which may take 4 months or 4 years, there's no rush!) visit there as often as possible to try and make it 'feel like home'.

Financially wise, I don't think you've posted details of your dh's income. But generally I'd:

• Make a budget, list all outgoings, ensure saving is prioritised where possible.
• Keep ploughing money into your instant access savings until you have 3-6 months expenses saved. Then all savings go to the lifetime ISA.
• The only really 'concerning' aspect is your pension which is very low. As soon as you complete your degree and start work I would prioritise this massively. Assuming you're managing OK on your contribution of £12k, i'd think about ploughing EVERYTHING I earned above £12k straight into my pension for a few years (until you need to think about a mortgage applications) to bulk it up. Then ensure you still keep a hefty contribution going long term.

Generally though I think your worries about being in a horrendous position are unfounded. At age 40, you could be in the position to buy a house with a really decent six figure deposit (assuming you keep saving gradually to your ISA). Your dh already has one pension secured and could easily secure a second full pension from a second career between age 40-65. You'll have your degree and lots of opportunities for employment as a result- just work at your pension and when considering employment opportunities keep their pension offers at the front of your mind.

I assume your DH wants to leave the army when his time is up?

I’d focus the next 5 years on working on your own training and saving up as much as possible while you’re still in army housing. Find out the exact details of the army pension.

Then consider what he wants to do for his second career. Where do you want to live? Does your job restrict your location? Family or friends you want to live near to? Hopefully in 5 years you’ll have his lump sum and more in your savings and can buy a house with a significant deposit and have 2 decent paying careers ahead of you.