To ask what you think of these finances and how you would improve anything if at all?

[Heybub]

Earnings combined last year were approx 145k- this will increase by 4.5% this year
mortgage of about 360k -house worth 520k
we save 2k per month into long term savings
between us we have savings of approximately 90k
pensions are at 17% (10% by employer and 7% by us- we will increase this over the next 3 years to 10% also)
2dc and 40k saved for them.

What would you do next? Keep saving, overpay mortgage?

You might find the UK finance flowchart useful: https://ukpersonal.finance/flowchart/

Ooh wow thank you ☺️

Have you seen the financial flow chart, it is easy to find by searching. I am rubbish at links, so will let you find it for yourself.

You seem to be on track just fine to me.
what are your goals and what do you need to save for ?
retirement, kids in school and Uni, round the world cruise tickets, mortgage free ?

I gave just seen it 😍

Goals are to have enough in the case of job loss…and mortgage free would be nice eventually, we have separate holiday funds I didn’t add those as they are expenditure imo so will be spent as such.

Other people are cleverer than me and can link . Hope you find it useful.

@Egglio had posted it for me. I’m going to sit with dh and this tomorrow and we can go through it. I have had a quick look, it’s brilliant 🙌

I would say we are bang on step 6. Just need to invest maybe?

It sounds like you are and that's why you're unsure what to do next. I always find this flowchart helpful as it means you can approach it from your particular situation/income/finances. Just remember to have a little fun too as well as invest!

It has been so helpful thank you!

How old are you? And at what age do you intend to retire?
£360k left on a £520k house is a very different position to be in if you are 25 or 55.
Also what are your pensions currently worth? 17% if you’re 25 with 200k in the pot is again a very different position than if you are 55 with £20k in the pot.
you don’t say how long your wages have been at that level so there is a lot missing from your post if you want any considered advice.
where are the 90k savings? Is it in ISAs?

We are both 38. I actually have no idea why pensions are worth. But I think projected is about 750k each…I’ll have to double check tomorrow. Not looking to retire early

I'm aiming for an approx income of 50k from pension, think that's a healthy buffer

Watch the rebel finance school course on YouTube. It gives excellent advice

The flowchart above looks almost identical to the advice provided by Rebel Finance School.

OP, if investing is your next goal, their YouTube series is v useful.

I have no idea what income that would provide, i suppose it depends on the lump
sum taken out?

A few questions-
Are those earnings net of tax?
Why are you saving so much rather than investing?
What do you each have in your pension now (rather than projected)? And is your projected £750k a real terms figure?
Whats your mortgage rate?

Those are pre tax earnings. We take in a
minimum of 7.5k pcm together.
I save because we want to have a good bit of cash in case of job loss etc.
No idea re pensions I haven’t looked in a while, that was the projected figure based on current input. Our salaries increase by 4.5-5% each year. We are not at peak of earnings either.
mortgage rate. 3.75%

£90k is high for cash savings at 38. In your shoes I would aim for 6 months’ expenses only and I’d move £40k into a couple of S&S ISAs, especially as you are young (and presumably paying 40% on most of your savings interest as higher rate taxpayers). You could also consider overpaying mortgage if you don’t want to invest that much as your mortgage rate will be higher than your savings interest net of tax. Your savings are losing value in real terms.

Definitely worth checking actual pension figures and what they are invested in. I know you plan to keep working but a lot can happen in 30 years so it’s worth knowing the actual numbers.

Do you regularly review costs and interest rates? Getting the best deal can make a huge difference over time.

Even if you are comfortable, it's always worth making sure you're not overpaying for things like broadband and mobile phones, and not paying for loads of subscriptions you don't use.

For your savings, are you getting the best interest rate and using your ISA allowances? At least one of you will be a higher rate tax payer so all interest over £500 a year is taxed at 40% unless it's in an ISA.

It's good that you've decided that you should look at investing. As well as the other resources, the Meaningful Money podcast is excellent for learning about finances. There's a recent series that covered the financial flowchart in detail.

https://meaningfulmoney.tv/category/podcast/season-25-finance-os/

One of the factors to get your head around with investing is risk. I haven't listened to it yet, but I see they have a recent episode called understanding risk, which is probably good for a rookie investor

https://meaningfulmoney.tv/category/podcast/season-25-finance-os/

Back to ISAs, if you haven't used your ISA allowances, you can get £80k in by 6 April (£20k for this tax year and next for both you and your DH) so that's something to look at soon, whether it's in cash or S&S.

For your ISAs, you probably want a global multi asset tracker from a low cost provider like Vanguard - if you do enough reading or listening, you'll find that's what's recommended.

You could also consider overpaying the mortgage, but over time investing is likely to grow faster than the interest rate so it doesn't need to be a priority, especially as you can comfortably repay and have resilience, as shown by having savings and ability to continue to save a healthy amount.

Agree with all this. Interactive Investor is also a great platform alternative to Vanguard, they have just reduced their fees.

You should also check what fund your employer pension is invested in; often they’re in a default fund which isn’t always great. You can sometimes request to move this. But you need to understand investing first so I would make that your top priority.

At your age and with the amount of money you have available to invest, I’m sure you could retire early if you wanted to - assuming you make the right decisions now.

Thanks for this I will look into it today ☺️

Depending on your mortgage rate it may be better to invest the money rather than overpay. What are longer term/retirement plans too? If you need to bridge between early retirement and state pension age then look at maxing out your ISA allowance each year as tying everything up in pensions that you can’t access until you’re 55/57 can be restrictive.

Yes, we aim to be mortgage free by retirement so don't really anticipate needing to take a lump sum but obviously that could all change with time. As a married couple I read somewhere that a joint income of 60k is comfortable for retirement (1 holiday a year abroad etc). We are similarly high earners so we can definitely aim for more - approx 50k each.