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.

What do financial advisors really do of value (at least unless you spend quite a lot on one)? Is there a qualification which can be used to gauge that they are appropriately skilled?

Whenever I've met people described as being financial advisors be that for myself at the bank, through work or socially I've left entirely unimpressed that they knew much at all. In especially their knowledge of person tax planning was severely lacking.

After a cancer diagnosis we wanted to live more for now. We still save but we spend it a bit more!

I haven't read the whole thread but I can relate to what you say in the OP. We earn ~£110k /yr and "only" spend £40k /yr including housing and childcare, saving the rest. We also do not gain enjoyment from going out or buying stuff we don't need.

However, to stop me being tight with our son we are planning to save £500 /month into a separate account once the childcare stops and make sure we spend it on experiences for the boy.

We are aiming to have enough saved at 55 years to retire on £50k /yr as that will give us the same quality of life as now but with a bit extra for hobbies and holidays.

I would say you are over-saving. Your pension calcs are based on working to 65. But you also say you're mid 30s and will be mortgage free in ten years. I think you could plan to pay off the mortgage a bit later and have a little more now.

The gap in your financial plan is long term saving/investments outside of your pension. £50k in cash savings is a good buffer but I would consider investing as well. Maybe divert some of the money you're using to repay your mortgage into an investment ISA? It's worth doing that with plenty of time to let investment returns compound.

You have clearly never spoken to a properly qualified IFA. Yes they have to do exams. And are regulated. And can save you a lot of money if you use the right person. They are (or can be) just as valuable as a good lawyer, accountant etc and will also be able to advise re tax implications of any decisions etc. please do some research because comments like yours could put many people off getting advice that could benefit them hugely.

Ate you going to spend it when you retire, or just hoard it?

I don’t really understand the question. If you’d get no pleasure from spending more now, why would you even consider it?

Saving gives you options, especially if life doesn’t go exactly to plan (due to illness, death, divorce or just deciding you don’t like your job and would rather start again as something else).

With a teacher’s pension plus savings you’re in a good position. I wouldn’t waste any time worrying about being too rich in future 😂

Great idea. I also like the thought of having a set "fun money" account whether that's for us individually, as a couple or as a family.

At the moment our holidays are pretty strictly budgeted. Think Spreadsheets etc.
£1,500 for a small holiday, £3,500 for a large holiday. Just back a cruise and spent (all in, including bus to airport, travel insurance, spending money etc) £1,547. Unfortunately we had a medical bill of £110 which took us over the £1,500 😂 but that allows us more holiday. It pains me when a family tell me they went to Florida and it cost £15k simply because it doesn't need to with good planning. Last April we done New York, Florida and a 1 week Caribbean cruise all in for less than £3.5k (albeit that was before baby was born).

In short.... I don't plan to hoard it and I look forward to the day where I don't need to budget for holidays and can just book based on a bit of luxury rather than sticking to a budget.

Can I ever see myself paying £400 a night for a hotel? No way 😂 BUT it would be nice to think "what do I want to do" and go do it

Weird responses here.

I'm ahead of OP. I'm 39, mortgage free, decent savings and putting close to the maximum (40k now c.60k/yr) into my pension, generally through bonuses as a high earner. Plan to retire as soon at 55, live off my ISAs until the private pension kicks in at 58, then we're off travelling.

I would say if things are good, save. You never know what might happen. Companies or schools can make redundancies. Family can get cancer and it costs a bomb to treat. You might be fortunate to have triplets - expensive. Worst case you've set yourself up well to deal with life. Best case retirement is a party.

I'm gunning if for a few years whilst the kids are very young then I'll reduce contributions to free up capital for the Disney Lapland hobbies etc.... it's exhausting constantly smashing targets but no pain no gain. The haters can moan and be jealous but won't push themselves and invest for the long term.

A take away every three months though - mate... get a decent wine, have a night off, an hour in the local sauna. Doesn't cost much and helps well-being.

Otherwise, you're doing well. Positive attitude, get your pension fund app sbc watch it build build build. It's addictive, drives you on. Keep going ✌️

Congrats on being mortgage free..what a success!
I wouldn't thank you for a decent wine 😂😂 but I do appreciate your contribution.

Out of interest you mentioned pension app SBC... Is there a specific pension you'd recommend? Sitting with a bit of cash just now (~£30k) that looking to put somewhere. Savings account interest has plummeted as expected so anything that wasn't fixed is ready to go elsewhere.

Thanks - it's good to have an eye on the future 👌

Ahh sorry, typo - "abc" should be "and".

I have a Scottish widows defined contributions pension via work. I can see the fund value, the funds it's invested in, projected growth and projected pension per year etc - keeps me motivated to build it.

Pension Bee are pretty good if you're not getting employer contributions and consolidate your pensions, you can do the same with them.

Since getting a visual on the value on an app I've become obsessed watching the value climb over the last two years (how long I've had the app). I'd recommend looking into it if you like refused updates etc.

Great thanks! The pensions I had before teaching j put into pension bee (had quite a few jobs and so seemed much easier). The growth was super, although maybe a slightly disappointing last 12 months or so but definitely happy with the overall performance and, as you say, great to watch it grow!