Am I saving too much?

[Pensionpot123]

Hi all,
I'm always a bit concerned that I don't splash out - I am very frugal....am I too frugal?

Household income ~£100k in West Scotland. Wife and I are mid 30's.
One DC - 6 months.
Value of house - £600k, mortgage £200k with £50k savings. Plan to pay mortgage off in 10 years.

At the moment our pension is looking to be approx £76k/yr combined exc. state pension.
Long term plan would be to downsize on retirement to house maximum half the value of current home (if nothing changes, profit £300k from sale).

Should I be spending more? Am I leaving myself too much for later life?

At the moment we -
Don't eat out
Go on 2 good holidays a year (Florida, cruise, New York etc)
Don't do hotel breaks
Get a takeaway every ~3 months
Change car every 2-3 years to a new-ish budget car (Ibiza, Fabia, Clio etc)
Keep all other outgoings to a real minimum

Any opinions or serious advice about pension is welcome!
Realise there may be people who earn a huge amount more or have a much bigger pension pot.

We're fortunate that the previous owner spent a fortune on the best of everything for the house so apart from a lick of paint in some rooms we really needed very little. Splashed out on quality carpets for hall/stairs/main lounge but that's about all!

As you say, some kids wear a weeks wages with their stone island gear and don't even realise it

The OP is in Scotland where it’s perfectly normal to use done rather than did - it’s one of the instances where Scottish grammar differs from English. I’m English but wouldn’t be at all concerned to hear teachers using or writing it here.

Scottish football manager: "The boys has did their best for me."

Thank you! I'm certainly not great at English but don't think we place quite as high an emphasis on grammar in Scotland (happy for someone to say I'm wrong and that it's just me 😂)

The guiide number is giving you a single person (not one part of a couple) and calculating what you need at the date you retire, including inflation.

The Which number is telling you what a couple spends now.

They're not that different if you look at the research each is based on. Personally I prefer to work in current money when planning retirement aims rather than trying to guess inflation over the next couple of decades. If you have a DB pension with decent inflation protection (as you do) that's reasonably safe. IF you have any DC pension you need to be conservative and allow for inflation in predicting growth.

We are in a similar financial position with similar salaries and have actively chosen to not spend money in the way most people choose. The TPS is a huge benefit but realistically is unlikely to be around for your entire career so make the most of it while you can. Be aware that the survivor benefit is only 37.5% of the pension so should one of you die early your income would drop.

Got you... That helps!

I think you've been a pretty good sport on this thread. People post about their lives with mind boggling salaries in mumsnet and get less criticism here.

Basically the consensus is you'll be fine but you may not want to/be able to work full time until you are 65. This and the costs of your lifestyle changing are the risks (kids get expensive and you may need to pay for tuition or something unexpected). But you seem to have plenty of slack in the system. I think it's smart not to lock all your savings into paying off your mortgage where they might be difficult to access.

Thank you 😂 it has been a eh ... Fun thread shall we say.
Appreciate the summary - I don't want to throw money about just now then regret it later and likewise don't want to go too far the other way.

Thanks for your help 👌

Interesting about the survivor benefit. I was nosing at the website for Scottish teachers pensions and couldn't find the number. It seems like one of those important figures people should know but generally don't seem to.

I didn't know it and as you say it's pretty important!
We do get 4 x salary as death in service which I think is generous but really need to look closer at pension

You need to ask your wife.

Does she feel she's able to buy a new item of clothing when it's needed or is she's saving up for weeks for a new pair of boots and putting up with damp feet? Is she turning down coffee with the girls because there's no spare cash?

Why don't you ever eat out? Not being able to afford it isn't a proper answer, you're earning 100k.

Can DD do after-school clubs that match her interests? Does she get trips to the cinema and theatre because it's fun?

Are your holidays relaxing or is it the cheapest option going for the shortest time reasonable and living on packed inches all week?

Sorry I'm not sure if this post was meant for me.... If it is then it's important for me to point out that I focus on value, not on cheapness. Our holidays are fab - last year we done Florida, New York, Caribbean cruise, Mediterranean cruise and a city break. At the same time, I'll email every TA I can find in the UK (and abroad) and request cheapest quotes, getting the price down as far as I can possibly get it. So definitely not cheap, but great value 👍.

I don't go out for dinner, and particularly expensive dinners, for 2 reasons. I can't understand the value in paying in the hundreds for dinner and genuinely couldn't let myself spend that sort of money whilst others are struggling for a meal. I also understand that must seem counter to the holidays we go on but I would really feel quite guilty about paying excessive money on dinners.

There's also a fair chance, like most posts, folk will say it doesn't add up.
Flights for NYC was using Avios points, hotel (Doubletree by Hilton) was booked during COVID and managed to get it for £220 for 3 nights. Total flights + hotel for 3 nights in a good hotel, perfectly positioned in Manhattan £220.

It can be done

My fil has the same view about spending on eating out - spending in general, really. He can't see that you are paying for an experience and that you are paying the wages of people who are providing that service / expertise / experience. Plus, if everyone chose to not spend because they think it's extravagant, the economy would collapse.

Really interested in you not going out for dinner/ coffees. I'm sure that when I was a child my parents rarely if ever did either. They did go to dinner parties in peoples houses, and church events. There just were not many restaurants around.

However its the common way to spend time with friends these days which makes it seem socially restricting not to do so.

Great thread by the way. It looks like you spend money differently to many others to me as opposed to not spending money. The amount you've spent on a house has (I guess) been a focus - buying an expensive house and keeping the mortgage down. Would it be fair to guess you could have bought a perfectly reasonable family home for £300k ish in West Scotland, and been mortgage free with £100k in ISAs?

That's true, and likewise if we all spent and no-one saved then we'd be in trouble too. I'm quite as happy with a £10 pizza as I am with a £25 main course (that's what I would call extravagant btw)

Where we live 90% of houses are 3 bed standard semi detached. We had one of these. All we wanted was 1 more living room. We looked at extending but our plot didn't really lend itself to extending and had alot of steps to it due to a slope.

We then looked at moving into extended 3 beds but the market was crazy (70 viewers, 40 bids, home reports of £240k going for £350-370k at closing dates).
One house came on the market that was what we thought, well out of our budget. I said to DW, let's go see it, maybe taking ourselves slightly out the mass market will help. We were the only viewers, put offer in of home report and got accepted the same day. We got a much much much bigger home (which has upsides and downsides to it) for not all that much more than some of the extended 3 beds were going for.

I definitely don't remember going out for dinner when I was younger... Even now I'd prefer to have people over for dinner and save everyone a bit of cash.

We spoke about staying in the old house, the world would be our oyster, mortgage paid off by ~30 and huge amount of disposable income.... I still sometimes regret moving (not to mention the huge LBTT tax bill) but it's all good

OP if it helps at all, I totally get where you are coming from.

While completely different income and occupation, I also focus on value and prioritise differently to my friends. I bought a relatively expensive house but absolutely get the most out of it - I genuinely enjoy spending time in it. We go for walks in the local area and take hot chocolate in flasks. I have a fully fitted out gym in the garage (all absolutely top quality, but all acquired for little or nothing on gumtree/freecycle/marketplace) because I’d rather that than a gym membership. We have booked some fantastic holidays, but they are on points/loyalty schemes, flights booked on budget airlines or in the sales etc. The thought of spending £10k on a holiday would make me come out in hives!

Although I could afford it I’d rather not spend money that I don’t have to, and I enjoy something better if it is good value. It actually means I can splurge elsewhere if I really feel the need.

That's it! Since buying the house we've been able to put family up for 6 months whilst things were happening... One getting kitchen/bathroom done that took month, another going through a house move that didn't go to plan. I'm able to treat friends and family to Christmas dinner/BBQ etc without worrying about space. We can have international friends stay with us and give them their own bedroom and bathroom. We let friends use our garage for storage etc. It's just nice to be able to do that for folk.

It pains me when I hear of someone spending crazy money on a holiday that with a bit of planning could be far cheaper.

Also think you have had a hard time.
I work for a local authority and while my pension looks good I currently do not want to work until I'm 68 so what would be around 23k will probably be about 14k if I retire at 63.

Also I've started saving in a stocks and shares isa and this will be used to help pay for the kids University costs. I ended up with twins after my first child so have 3 to put through

I'm sure they are incredible but twins must be hard, hard work!

All the points about what you're paying for are valid, but suggesting economic collapse is pure hyperbole. Economies are not static things that break if you meddle with it, they're dynamic in response to many different stimuli. Nobody needs to eat out or work in the restaurant industry, and its fine if it shrinks. People who do it are not doing so as a charitable act.

Eating, as an experience, when many go hungry is a sign of something wrong about a society. The economy is suppose to serve the needs of a nation, and large numbers are not having their needs met. It looks a lot worse when observed at a global level and you pay attention to where the food of wealthy nations is grown.

Looking at it from a health perspective produces different insight. You can gloss over ill health caused by poverty but all the others affected shows a lack of insight from people about what they really need. The food service industry isn't interested in your health, the primary and arguably only real purpose of eating, the vast majority of it actively resists every last bit of regulation to the bitter end.

Maybe we should all be eating out less, and alongside that a greater interest in what we actually need?

Put your budget into the citizen advice budget and it will show you the pie chart- then come back and give us the real %