How would you describe my financial position?

[wefly]

I am 29.

I have 1 child and 1 on the way. In a happy relationship but not married and separate finances due to him having personal debt history which is still ongoing. For same reason we have no joint savings (yet) but hopefully will in future.

I own a property which I have 100k in. The mortgage is 130k which I pay off £1000 a month. Fixed rate. Will be cleared by time I'm 45 years old.

I rent the property I own out for £1500 a month.

I live with my partner and child in a property that we rent. I pay £750 a month. Partner pays other £750.

I own business and earn around 50k a year from this business.

Currently I have 5k in savings.

No pension. However I view my owned property as my pension.

....

Seeing as no one really discusses finances. Interested to know if you think my situation is good/ bad/ okay for my age/ stage of life.

And if there's anything you think I should be doing to better it ?

Personally, I think you are low on easily accessible savings for the money you have coming in each month. If e.g. a boiler breaks in either property and needs replacing, or your car stops functioning, you will have an immediate problem that you don't have a lot of immediately available funds to resolve. What will happen when the new baby comes in terms of mat leave/your business - will you continue to receive much of an income or is it going to be on ice, and if the latter, for how long?

Yeah I agree. Need more savings.

To answer your question I will have £1200 a month state maternity pay for 4 months.

After this, I'll be back to work with the help of my mother helping with the baby

When you retire will you still be renting? Or do you plan to move into the property you are presently renting out to others (in which case you can't really view this as a pension.)

I guess a lot of people when they retire hope to own their home outright with a cleared mortgage.

I think I would be aiming to stop living in rented accommodation and buying and contributing to a mortgage on that instead. Are you concerned that your partner has a poor credit rating or something which could cause issues? I would still be aiming towards this but taking advice on the legals if you are are concerned about that or a potential future breakup so that you are protected as far as possible.

I think you are doing well.
For your earnings however, you should aim to save more / are you making overpayments on your mortgage ?

But I do get potential childcare costs is perhaps what is using money which could be saved?

I guess the aim is to eventually buy a property with your partner? Therefore saving should be priority. Is he of a similar financial position earning wise?

FWIW I am 30 , rent out 1 flat, take home around £2200. Not married live with partner + 1 child. I don't really pay any bills/mortgage in our current home, my partner covers it so I aim to save around £1000 a month.

I agree - you need more savings- and like the previous poster said - the home you own cant really be counted as your pension and surely you will need somewhere to live? If you carry on renting that will be such a waste of money

You really need a pension, even a tiny one adds up with compound interest and there are schemes with government contributions (free money!).

I would start your pension once you pay off your mortgage. Basically put the £1k a month into your pension.

You are in a fairly good position for your age but definitely need to add in decent pension contribution IMO. It's a tax efficient way of saving. More 'rainy day' savings would be advisable too.
In retirement, ideally, you want to 1) live in a rent / mortgage free property, 2) have additional income to top up a SP and 3) have investments / savings to enable you to retire before the SP kicks in. If you live in the house you own outright, that's number 1 on track, 2 & 3 need work. The earlier you start, the easier it is. The fact you are thinking about your financial position now suggests you will do ok!

Don't wait until 45 to start a pension! Tax relief and compounding of growth makes this a bad approach.
Don't forget that £1k a month now will still be £1k a month in 10 /15 years time and 🤞your income will have grown so the payment should get easier and easier & give opportunity to save into your pension.

I would say your financial position is not very good. You can’t claim that your property is your pension since you only own one property. You REALLY need to be saving into a pension and this needs to be prioritised over paying off your mortgage by the time you’re 45. Is there a reason that you’re not paying into a pension? Perhaps consider opening a Lifetime ISA, since you are under 40.

I also agree with others that your savings are on the low side. Given your low savings and your partners debt issues, it seems unlikely that you will be buying a property together. All the more reason not to consider your house your pension.

You need to be paying into a pension/SIPP

You need 6 months income saved for emergencies

Aim to get to a position where no rent/mortgage payments

Take advantage of ISAs

You have started a family with someone you will be inextricably financially tied with for many years so I would be interested in what he is doing about his finances.
If you stay together when will he be able to start building your joint family finances? If you split what will he be able to do to support his two children?
Your rental property would make me nervous. You are making some extra but not really enough to make it worth the risk. You could have that 100k somewhere safer without the risk of a void period wiping out all your efforts.

I would start a pension now

Decent for your age but I always find it strange when people say their home is their pension. I get that you can sell it and use the funds as a retirement pot. But you need to live somewhere? I'd start paying into a pension now.

You'd be doing OK if your partner brought the same to the relationship.

You need a pension and 29 is not early to start.

Make sure your partner's dabs stay off your money and don't marry him until his financial situation is better than yours.

Move back into your property, put the surplus money you would be paying on rent into a pension/savings.

You're doing remarkably well at a young-ish age, you know this so I don't know whether this thread is part stealth boast.

Your main risk is that your financially irresponsible partner walks away from you and your children, leaving you with no support and all the childcare/child rearing costs.

You don't have much margin in your property investment should things go wrong (vacant periods; significant maintenance expenses) so make sure you build up a bit of money for that.

You're doing remarkably well at a young-ish age, you know this so I don't know whether this thread is part stealth boast

I thought this initially but actually the finances are quite squewy so not so much to boast about perhaps?

It sounds like you are doing fine. My two pieces of advice would be to get a pension started asap, and not to link any finances with your DP.

Sure, there are tweaks to be made but OP has £100k notional equity, an income of £50k and no unsecured debt. At 29 that absolutely puts her in top percentiles in terms of wealth and income.

Does your partner own a property? I’d make saving a deposit and buying a home for your family to live in a priority as at the moment you’re spending £1500 without building up equity. Plus obviously as others have said you have no pension - your only domestic property is not a pension.

You're doing OK
My concern would be the fact that if your BTL is considered your pension you need to start thinking about how you plan to buy a residential property to live in. Where will the deposit come from for that?
How long are your partners debt issues going to cause problems?

Not bad for your age but could be better. A few Qs-

1. If the property is your pension, where are you going to live?
2. Is your business one that you will be able to sell as a going concern or are you all the value in it?

You need to think a lot more about pension provision. You could also start investing outside a pension eg ISA.

Thanks for the replies.

Very interesting re pension. I need to get this started asap.

I have around 60-70k which I will come into at some point in the next 5 -10 years.

What would you suggest I do with that? Savings or buy another property?

The answer to all your questions- new £60K included - is pension.

But also you’re going to need to think very carefully about long-term relationship - marriage makes assets 50-50, in a nutshell, so that’s a consideration. But if you’re staying together long-term and not getting married what’s your DP’s financial plan for their future etc.