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.

😂 you cannot be serious! 😂😂

Stop thinking about the future so much you don't enjoy/appreciate or live your life right now. I'm in my mid 50s and have lost a fair few friends of my age already- cancer/strokes/heart attacks.
You are on track to have a comfortable retirement - loosen those purse strings and go to as many places/holidays as you can afford and please- have a few 'finer' things in life. It's no good ending up 80 yrs old with loads of money and too ill to spend any of it.
I know a couple of elderly relatives who died with loads of cash in the bank- they got too ill to even leave the house- so the meals out/holidays new clothes never really happened for them 😥

You probably put you're heating on in the winter though 😂 joking, I do keep an eye on elec/gas but not horrifically. House sits approx 17.5C most of the time

Thank you 👌 maybe the encouragement I needed

So you lived with parents rent free for how long ?
Was that your biggest sacrifice ?

Stashing the cash now gives time for the magic that is compound interest to build your investments. It's stupid to spend more than you are doing as long as you are both on the same page and your partner is not feeling resentful.
Don't be miserly with gifts/charitable giving though - you don't want to be a complete tight arse and you certainly have enough to help others out when needed.

Also, circumstances change- being sensible now buys you flexibility later in life. As a 50-something reception teacher there is no way I am staying in the classroom til I'm 67!!
You also need to factor in possible illness/disability/relationship breakdown.

Coming from me... Loosen your purse strings, get the wallet out and get yourself booked on a cruise. You'll never look back 😂😂

Maybe it's just me (and this is not me telling others how to live, I was actually looking for the opposite 😂) but I genuinely think people have huge outgoings. I know friends that spend >£150 a month on their TV and broadband subscriptions, £50 on phone, £500 per month on their car. Only my opinion but I think when it's all added up it's a surprising amount.

I know lots of people with higher incomes including me, I would never spend £50 on a phone & wouldn't be able to afford £500 a month on a car.

To put into context, I've currently got £50k in savings/ISA's earning ~6%. That's £250 a month interest I'm earning....pays my utilities and petrol pretty much.

Surely you have to pay tax on some of those savings? And again I don't know how you amassed 50k so quickly. How long have you been getting that rate of return on your ISAs?

I didn't live rent free 👌and I stayed at home until 24. I don't see that as being particularly old but potentially I'm out of touch with that.

I reckon you’ll be alright, OP. 😉

For anyone asking about pensions, it’s true teacher pensions are among the best- if you reach retirement age after working yourself into an early grave… So live a little OP. I could not live my life like this personally, and my husband and I are sensible with money but we have a lot of fun too.

Yours,
A teacher

@dingledells

Sorry - didn’t mean to reply.

That interest has been this year only...that was when I stopped overpayments. Wife and I allowed £20k each in ISA and I believe we'll be just about on the cusp of paying tax on savings..I think we're allowed to earn approx £500-1000 interest (not including ISA)'before we need to pay tax but in reality, this was the first year we had to think about that due to high interest rates so still not see that in action

I'm not sure what the correct terms is here but our "worth.... Value.... Total assets?" Goes up by approx £3k a month. That is...money in bank minus mortgage remaining.
I guess we don't get to see each others bank statements so it's hard to know what everyone else spends.

Not in such a good position, but as others said why spend for the sake of it?

I save a fair chunk because of my lifestyle too, plans at the moment are to pay off the mortgage on a house I got recently ASAP (4-6 years ideally) and do improvements to it that push down the day to day running costs. Not interested in flashy/showy stuff. So: insulation, solar, heat pump are in mind at the moment. I'll see where I am after that, for other things.

Otherwise, maybe other things might be worth a shot depending on savings size. Like trying to set up some sort of community group or non-profit to do with where you live. obvs commercial ideas are an option, but my mind is always on useful stuff, so if the house is perfect maybe there's some ideas for improving the general area where you live. I got an idea in mind to do with nature and wildlife if I can find the time, because that's my kind of thing

😂 I'm sure you can imagine how fun our staff room is when we start talking finance!

I am finding some of these replies to your post really strange.

People are projecting their wants onto you.

My family would be horrified than we have so much in savings yet drive 10 year old cars and never go abroad. But we don't value cars or holidays. We do value regular time as a family so weekly meals and days out plus a bloody expensive hobby which we all do together and enjoy.

You do you. It sounds like you need to play with your budget and maybe try out a month or two of adding in spending here and there to see whether you think it adds value to you.

If you're existing quite happily on £100k now, then you're going to exist quite happily on £76k in retirement when you don't have the cost of a mortgage. But you're an educated person, you must have already known that.

I don't understand the point of threads like these, other than to show off.

100% ... For me it's been about reducing outgoings to a minimum, using the solar/batteries etc to drive down the price of utilities and limit home improvements until our mortgage is well down, if not pay off.
Owned homes for approx 10 years and haven't got new kitchen/bathroom/doors etc. most we've spent has been on paint which we've done ourselves and carpets in a couple of rooms.

The thought of paying £3 for a cup of coffee gives me nightmares 😂😂

And you're not @TwinklingLightsEverywhere? Spending money on new shit "just because" is some people's idea of stupidity. Everyone thinks differently, none of knows the OP .. and actually, the most authentic thing anyone can do is talk about what they are doing or would like to do.

To try and guess or assume or predict the nature of the OP ... that would be very strange indeed!

Guess you missed the 'you do you' part?

I taught for years and the thought of teaching until retirement is enough to make me want to top myself.
Your life sounds incredibly different to mine; we eat out a few times a week, have subscriptions to lots of streaming platforms for tv and music and gaming, we go away a lot. I think there needs to be a balance - what is the point of saving so much if it means your life now is rigid and grey.

Also living at home didn't help 'a little bit' it helped a huge amount as you were able to save considerably more than if you had been paying rent elsewhere.

I'm confused about childcare; you say £400 for part time? Does that mean one of you is working part time therefore impacting your projected pension forecast? Do you plan on having more?

You seem to have benefitted from a huge amount of good fortune; no uni fees, large house price increases netting you a big deposit, ability to stay home and save before buying a house etc. which is great but for loads of people stuck renting, paying off huge student loans with no possibility of getting on the property ladder or retiring with a pension higher than the average full time salary, your post seems super goady.

Life is for living, so live!

Apologies, it was never meant to come across as that...and in fact, I never intended to disclose uni fees/living arrangements/house sales, that was all brought on by people asking.
Parents will look after DC 2 days a week and DW will return to work 4 days a week but on full salary as using up the annual leave she has accrued.

There is no doubt that student loans are a big contributor to alot of people out with Scotland (and possibly in Scotland too but in my personal experience of uni, people used their student loans as free cash to buy clothes etc but didn't need to take it due to no tuition fees etc). This is only my personal experience of those around me and what they used to say to me...I appreciate this will probably also come under alot of criticism so I'm not saying this is the situation for everyone in Scotland.

hi

Seems like you are doing great! I'm not sure I understand the pensions. Do you get an annual statement which projects pensions at retirement age based on ongoing current earnings? Is the standard retirement age 65 or 68 (at present)?

What is the annual accrual rate for pensioners in Scotland?

It sounds like you should live a little but then if you're happy, who cares?

I agree with this. And your partner too. I know a stingy sod whose wife is utterly miserable with his penny pinching…