What do you think of our finances?

[QueenScene]

DH is in the army and we live in military housing.

At the moment, we have £30,000 in a LISA. We don’t own our own home and are both 35 years old. I have a small pension and DH has a good army pension. He will also get a lump sum when he leaves, which will be sometime between 5 and 7 years away (unless he decides to try to extend his career further). The lump sum will be around £60,000 in todays money.

We have two children who are 10 and 8.

I do worry that we don’t own a house, but if we buy one to rent out, we lose 20% of our Lisa savings (the government contribution). Should we do this? Or should we just continue to save in the LISA? We can’t buy a house to live in ourselves as the area where DH would be likely to be based next is in a really expensive area in the U.K. where we can’t afford to buy. Buying elsewhere would mean splitting the family, and we don’t feel that would work for our children.

Any advice would be greatly appreciated.

I'd be nervous about relying on lump sums because of the pension changes in recent years.

Right now you have about 30 years until state pension age. Would you want to continue working past that to pay a mortgage if you wait 5 years to get it? You could always buy somewhere, live in it a couple of years, and then rent it out if you move.

The other thing to consider is school. Friends in the same situation have stopped moving around once the kids got to secondary school age because they need the stability. Obviously this is your choice but they've pretty much all done it since the army stopped subsidising boarding schools so often.

I think you need to see a financial consultant and get some well considered advice.

We are hopeful and pretty confident that my husbands job will be able to stay in one part of the U.K. for the rest of his career. A lovely area with great schools but too expensive for us to buy there. So our kids will highly likely have stability if we stay in the subsidised military housing. And buying somewhere cheaper to live in for a couple of years before moving would actually be more upheaval for them. That’s what is making this decision harder. 🤦🏻‍♀️