Balancing financial goals across different time frames

[FactuallyActually]

I’ve tried to summarise our financial situation below. Any thoughts on balancing our financial goals across different time frames would be really appreciated.

Family of 3 - Me 45 and DH 50, combined salary of ~£110k, with some overtime on top of this. 1 teen, likely to go to university in 4 years.

House - no mortgage, worth £200k?, needs refurbished…but we both WFH, we’re not particularly practical, and we’d struggle to live and work in the house through any significant work.

Savings - ~£40k, should be able to save £3k? per month from now on.

Pensions - on track I think, both have DB pensions from previous roles, and currently contributing a reasonable amount to DC pensions (me 24% and DH 22%).

So, we’re trying to define our short-, medium-, and long-term financial goals at the moment.

We need to move house, both to have more space, and to have a house that doesn’t need any work done. I’m starting to worry about our ages with regard to getting another mortgage (although we have a reasonable amount of disposable income; maybe we could go for a shorter term?).

DS is likely to go to university in 4 years.

I recently started investing in S&S with the aim of bridging the gap between when I start to get my DB pension and state pension.

Any thoughts about any of this, and about how we could prioritise things would be appreciated. I wonder whether we’re currently too heavily weighted towards the future rather than the present.

House - As teen likely to leave the nest in 4 years time, can you stay where you are and look at moving in 4-5 years time, when you are no longer tied to being near a particular school/college.
Why do you need more space? DS is already a teenager and as he gets older he may spend less time at home and more time out with mates. So do you really need more space? Maybe you need a part-time gardener so you can spend more time in the garden?
Moving house is expensive and time consuming. So putting off a move until DS has gone to Uni may mean you have a wider choice of where to go. Moving now you are tied to where his school/college are.

Mortgage - why would need one? If you put aside £20k per year for 4 years, with no growth on that, it's £80k. If your home was sold at £200k, you have £280k available (minus legal fees, stamp duty etc), so maybe looking at property of £250k. Would you really want to be taking out debt? Maybe a short-term loan but you can probably do things with cash.

Pensions - have a play with https://www.guiide.co.uk/ to get more of a feel of if they are on track. 22-24% contribution is impressive. So the DC pensions are likely growing quite fast. You won't be able to access that for 7-13 years, so maybe you are tipping a little too much that way.

When you retire you want a place to live, with low costs, no mortgage. So your current home is probably not where you want to retire, as it needs work doing and as the years go on that may need more work. So maybe tipping more towards future home cost... using your Stocks & Shares ISA as a tax free place to store the money over the next 4-6 years. 4 years is a little low in timescale for my liking, so I might want to put some into as high an interest rate savings as possible just so I knew some of it was growing at 4-5% not being risked on the stock market. Try to determine your attitude to volatility... if markets dropped when you wanted to buy a home, could you hold off for another few years?

Thanks @nannynick, lots of food for thought.

More space - Yes, I wonder whether we really do need more space. Our house is quite small, but we've managed so far, and we've got a relatively minimal mindset.

New mortgage - Perhaps you're right, and we could avoid this altogether. I think I've been imagining a new bigger house, but maybe it could just be a new house or a new apartment.

Pensions - I think we're feeling quite cautious after leaving DB schemes, hence the relatively high contributions. One of those includes a high employer contribution, but one doesn't, so a recent pay rise was diverted in that direction instead.

Oh, savings are currently mostly in savings accounts (4.85% interest rate), with a smaller amount in PBs.

What you have in savings and premium bonds may be your 6 months or so of emergency fund. Some might be the start of a house moving fund.

What price range are you considering for the new house? Presumably you want somewhere in better condition and larger.

Maybe work backwards by calculating a moderately sized mortgage with a 10-15 year term and what that could buy. Would that fulfill your aim for a better house or would you just end up with a similar house but in better condition?