Is this salary increase good?

[girlinthrgreenscarf]

is this salary increase ok? I feel like it’s growing slower than I would like it to be with inflation and just cost in UK.

Full time. Currently 26 years old.

2022/23 from £40K to £43K
23/24 to £46K
24/25 to £50K
in 3 years times (2028), I will be on £60K and will likely be static on this until I get a big promotion. Not guaranteed but there will likely be 2.5-5% increase per year at this point to keep up with inflation but no major increase until I get to management.

my partner earns less than me but have separate assets and finances so don’t cross over at all.

just want to retire early is all.

You know it's good, it's well above average but if retiring early isthe goal there's no point in having a good salary if you spend it all so saving, living within your means and making good decisions is key.

Yes it’s good, if you want to retire early how much of your salary are you paying into your pension and overpaying on a mortgage? That’s what will help you retire early.

So that’s £20k in 5 years, averages to £4k a year and roughly 7% a year. Yes it’s good but not brilliant. You’ve had great annual pay rises but no major promotion money in that time. £60k is a good salary but not early retirement money unless you live in a cheap part of the Uk for housing, or are very good at investing and saving.

It depends on your industry, in some that's great or the defined path, in others you need to get a new job every few years to achieve bigger jumps in pay.

I'm in the public sector and could never imagine such rises. For nanny yeats we were on a freeze and we have no increments, no way to progress up the scale. So to me it's amazing.

Yes it’s good. You’ll only get the big jumps from moving employer. I was similarly on £50 at your age.

I will add the warning that pay rises definitely slow once/if you have kids! I’m only on £60k 8 years later, meanwhile my dh has tripled his salary. I wish I’d made some strategic salary boosting moves before I got pregnant.

So if that’s your plan, and the big promotion is unlikely to happen in next year or so, I would be considering moving employer

I don’t have a pension and will never put anything in it. Only the first 25% is tax free when you withdraw, 75% is to be taxed anyway which is crap. Had some horrific stories in the family about pension firms not paying out at the time of retirement and some firms like Nest invest in weird bonds. All to bully the public and those who have no financial literacy. Even big firms (again experience in friends circle) took them 3 years and still not gotten it back. Need to get lawyer involved.. they want to pay you In instalments. work all your life, don’t want anyone holding my lump sum money if you get my drift.

So I have alternative investment and assets and some are easy access whenever I need to.

Investment this year made 0% which is terrible. But last year I made a return 25% profit. Better than savings account lol. But I wouldnt say I’m good, it’s risky but bigger the reward. Im not a financial adviser but I manage my own portfolio and I assess what I invest in.

Yes Monvelo- the reason I ask this is there is a hiring freeze and it’s even harder to get to management level now. So I wondered if I could get a head start earlier on with being financially savvy.

I live in a big city in UK (not London) and cost of living/ food/ services are quite high.

I would put in what you need to to get your employers contribution - it is free money that more than outweighs likely dips in value.

My goal is at least £70K by 33 with one side (small) art business and my normal job. but this is assuming I work full time and another 7 hours at the weekend. I haven’t factored in possibility of kids and needing to go part time. ehhhh I feel like I don’t have enough time in the world to achieve what I set out to achieve!

will do!

Re pensions, yes they are taxed as income when you them but you also get £40% tax relief when you put money in, so they are tax efficient, and your employer puts a % in too so that’s extra pay from them. It’s usually advised to spread your investments including using your employer pension (especially if your employer puts a decent % in). I’m aiming to retire early, I max out my employer pension as they over match up to a certain percent, overpay my mortgage to get that down as quickly as possible, have shares in a company scheme and also invest in a fund.

But @girlinthrgreenscarf paying in to your pension if done via salary sacrifice you are putting the money in before tax, that is why you are taxed on what comes out. At 26 even a small amount has time for massive growth before you retire. There are plenty of reputable pension providers around (Aviva, Fidelity and many more). Sure, when you come to take the money you need to decide if you will take lump sums or buy an annuity and have to be sure who you’re dealing with but that’s true of all financial stuff these days.

Yes, definitely re-examine your views on pensions - you're literally throwing away free £ otherwise.

It was Aviva. Reputable firm. Family friend has a lot of money in aviva pension pot. Refused to payout. Asked for 3 years and even escalated to senior management and still ignored.

ended up getting the money 5 years later with thousands of legal fees and hired a Accountant to get it back. It shouldn’t be like this.

This is a very unusual situation, and whilst awful isn’t standard and shouldn’t stop you educating yourself about pensions.

As others have said, you’re missing out on your employers contributions by not paying in, look into this more before writing off the concept entirely based on one persons bad experience.