Budgeting with no pension

I did my sums for us to retire last year when I was 60, after 8 years of us both working in reasonably well paid jobs and saving all we could into our pensions. My wife is a couple of years younger. We plan to run down our pensions and savings and they should last us into our 80's (if we live that long). By that time I'm not expecting to need as higher income as we do now.
 
Bacchus said:
Does the money from the sale of the London home need to go into "funds"?

I am thinking of a similar thing, downsizing from my "greater" London home and moving to the South Coast; one of the places I am looking at you can buy a very well positioned one bed house for about £100k - a couple of those as holiday lets would provide a nice (if taxable) income
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If you do intend to go in to letting, be it holiday lets, or long term lets, look into it carefully as it can be a pain in the a*se especially if you don't want hassle.

We have a bungalow which we've rented out for 9 years (long story but we were going to live there originally so it was only going to be a very short term let, but we changed our plans) and in the first few years the only 'profit' we made was on the value of it as we'd bought it at a stonking price (way underpriced by the builders) but actually made a slight loss on the rental income versus expenses, also the 'profit' on the capital is obviously only realised when sold though. During these early years it was a pain in the bum due mainly to letting agents being useless as we didn't have any real problems with most of the tenants.

Since the recession hit and interest rates dropped we now only pay 1.24% for our tracker mortgage (ie 0.74% above base) so we've had a return of between 190% (when we had agents) and now without agents 275%!!!! In monetary terms this is an income PCM after allowing for insurance, gas check etc, of nearly £350. We're going to be replacing some of the carpeting so it will gobble up a couple of months' income but the tenants are happy there as they've been there a good few years now and look after the place well so it's worth doing it, especially since they've got a new baby who will soon be crawling around.

If you can buy somewhere that is a very good price, in an area where the properties will always be in demand so less likely to suffer value reductions and get a good rental income then it may be worth it ... I know for sure though if we hadn't been intended to move to the bungalow originally we probably wouldn't have bought one!
 
Bacchus said:
Does the money from the sale of the London home need to go into "funds"?
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No not really but it will be better if it provides more income.I am weary of another crash though as this economy of ours all smoke and mirrors

we are moving to Worthing area, not so much a downsize as you get a lot more with your London money. wife has a bee in her bonnet re buy to lets...may have to go down this route just to shut her up..I'm very much opposed on principal but if needs must.
 
Judgemental said:
No not really but it will be better if it provides more income.I am weary of another crash though as this economy of ours all smoke and mirrors

we are moving to Worthing area, not so much a downsize as you get a lot more with your London money. wife has a bee in her bonnet re buy to lets...may have to go down this route just to shut her up..I'm very much opposed on principal but if needs must.
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Worthing??? Oh, well, if you like that sort of thing (c:

Buying to let can be a minefield as @MinxyGirl and others have said.

I bought a place a couple of years ago with the proceeds of cashing in an Endowment that was meant to pay off my mortgage in ten years (and probably wouldn't have), and I have been very lucky (so far) with excellent tenants, and also I chose the place VERY carefully - close to a Uni, close to shops, close to bus routes and stations, overlooking a park, etc etc etc. and I think that its value will have increased now by more than it would go back down if/when the property market takes a dive. The rental income covers its own mortgage and the main outgoings on my home, so I can live as if mortage free on a low income despite not being mortgage free (y)

If I were going to Worthing I would consider a holiday flat in Brighton (my old stomping ground), it would take more managing than a long term rental, but the rewards should be greater and there should be a lower risk of weirdos that you can't get rid of. There is always some risk, but then there is with anything. Failing that, a long term rental in Worthing is more likely to attract tenants of a certain age who are (hopefully) less likely to be weird...

Also BUY to let is less likely to be hammered than BORROW to let, so I wouldn't be thinking of too much leverage of your capital; beauty being that you wouldn't be affected negatively by interest rate rises, and even if your capital values went down it wouldn't matter, income would keep pace with inflation.
 
Judgemental said:
wife has a bee in her bonnet re buy to lets...may have to go down this route just to shut her up..I'm very much opposed on principal but if needs must
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I can understand that principal could get in the way of buy-to-let, but I don't think it should stop you. Buy-to-let landlords do get a lot of bad press, but it's not always justified. In spite of what Jeremy Corbyn says about the immorality of private landlords and the insecurity of private tenants having to move every six months, the reality can be very different - and you can't change the world.

The most hassle-free way to be a landlord is to be a good landlord. For me, this means buying decent property in a nice area, and keeping it in good condition. It also means managing the property yourself, carefully selecting your tenants, and forming good relationships with them. Your view is to keep the same tenants long-term, cutting out voids, and agency fees for finding new tenants. If the tenants are long-term and you look after them and the property well, they are also likely to look after it. This is the theory, anyway!

We have two rental properties. They bring us about 6.5 per cent pa on our investment, after expenses.

In our neck of the woods, we'll never make a killing on capital appreciation - unlike darn sarf - but we should make a bit more than inflation, in addition to the rental income. I'd be worried if the money was in the bank earning negligible interest, or in some sort of fund, where I'd feel I had little control.

The current plan is, that in 10 years' time we'll sell the properties and spend the capital! Or, alternatively, we might give one of them to our son to live in - if he wants it. Who knows?

I certainly don't feel that we're exploiting anybody, though - and our tenants seem happy.

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Long term financial planning is a great idea if you know how long your going to live, but at the end of the day you cannot take it with you.
We planned many years ago for the financial road ahead and then one day I have the fright of my life and now...... yes we still plan ahead, but not as far as we use to.
 
bellabee said:
Buy-to-let landlords do get a lot of bad press, but it's not always justified.

The most hassle-free way to be a landlord is to be a good landlord. For me, this means buying decent property in a nice area, and keeping it in good condition.
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Private rentals will always be in demand. When Martin was working he would often be based in various places for up to a year at a time. Owning two properties was not a practical solution so private rental was the way to go..... and we were very grateful to have the option to be able to rent for anything from a few weeks to many months.

One of his employers rented a small flat from a private landlord for the use of specialist employees who would be on site for a few weeks at most (and sometimes just a few days). That was a solution that worked for everyone :)
 
Bacchus said:
Worthing??? Oh, well, if you like that sort of thing (c:

Buying to let can be a minefield as @MinxyGirl and others have said.

I bought a place a couple of years ago with the proceeds of cashing in an Endowment that was meant to pay off my mortgage in ten years (and probably wouldn't have), and I have been very lucky (so far) with excellent tenants, and also I chose the place VERY carefully - close to a Uni, close to shops, close to bus routes and stations, overlooking a park, etc etc etc. and I think that its value will have increased now by more than it would go back down if/when the property market takes a dive. The rental income covers its own mortgage and the main outgoings on my home, so I can live as if mortage free on a low income despite not being mortgage free (y)

If I were going to Worthing I would consider a holiday flat in Brighton (my old stomping ground), it would take more managing than a long term rental, but the rewards should be greater and there should be a lower risk of weirdos that you can't get rid of. There is always some risk, but then there is with anything. Failing that, a long term rental in Worthing is more likely to attract tenants of a certain age who are (hopefully) less likely to be weird...

Also BUY to let is less likely to be hammered than BORROW to let, so I wouldn't be thinking of too much leverage of your capital; beauty being that you wouldn't be affected negatively by interest rate rises, and even if your capital values went down it wouldn't matter, income would keep pace with inflation.
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Worthing changing, many including our friends in Brighton moving that way as more affordable. prices rising though. You wont get much in Brighton for your money these days. Once it was bohemian now full of loud mouth Chelsea types.. screaming at the tops of their voices in restaurants its intolerable.....

I just want to be by the sea:)
 
Candapack said:
At your ages, I would be thinking about having to work till your both 70 before any state pension kicks in. As a farm manager and chef, you're both obviously used to hard work, and probably quite practical.
Have you thought about working together as camp site wardens? You can get info from the 2 main clubs in UK.
Good luck.
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That sounds interesting, I will start a new thread as any info would be good, thanks for your help.
 
Friends of ours have spent the last 7 summers working for eurocamp in france and italy, they have loved it but he is nearly 70 and are considering another season health permitting. You don't earn much but enough to travel for a month or two afterwards.

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@Bacchus Less chance of a weirdo in Brighton? You sure, Ha
I retired at 58 (now 71) and acquired two flats that I have rented out since then. It was bloody hard work, wife left me with two young boys in 1975 and I raised them with help from mum and dad and still ran my own plumbing business. On a Sunday I would precook all meals for us for the week and freeze them. No ready meals in those days, in fact no real supermarkets either. Got into property (two flats) through plumbing and decided it would be an ideal pension. Begged, borrowed and bit my way into the two flats with and endowment that was very short when required. Still, all paid up now and living with my new partner and my boys are plumbing in their own business and between us have 6 lovely grandkids.
Soooo would advise anyone, how can you get a better business than one that gives you a damn good pension and unbeatable capital growth. Built a granny flat for mum when dad died and now mum has gone it is rented out for £100.00 per week. Don't mention income tax as I will have to pay it till I pop my clogs, still enough about me. My point is if you are capable, get into rental, you'd be mad not to. (y)
 
Recieved this email yesterday @cliffandger Gerri

Dear Kathleen ,

You recently signed the petition "Make fair transitional state pension arrangements for 1950’s women":
https://petition.parliament.uk/petitions/110776

On Wednesday 2 December the House of Commons debated the effect of state pension age equalisation on women born in the 1950s. The debate was requested by Barbara Keeley MP and took place in Westminster Hall.

You can watch the debate here: http://goo.gl/pzztoX
You can read the debate here: https://goo.gl/NGwYmg

You can follow the House of Commons on Twitter: @HouseofCommons
You can follow the Petitions Committee on Twitter: @HoCpetitions

Thanks,
The Petitions team
UK Government and Parliament
 
This was Barbara's ending of the debate . It is very true for me :( @cliffandger Gerri x


Barbara Keeley

Share this contribution
I have only a minute to say what I want to say. A concession that affects only 250,000 women and saves £1 billion is nothing when there are £30 billion of savings and millions of women affected. A concession for 250,000 is not enough.



We have talked about the millions of women born throughout the 1950s living without pensioner benefits and often without income, so they are often working through their savings. Carers are hit very badly. Does the Minister think that he could live on carer’s allowance? I am sure he could not. There is opposition from all parties on the Opposition side, who will continue to fight this campaign. The Government must not close the door on 1950s-born women in the way they are seeking to do.



Motion lapsed (Standing Order No. 10(6)).
 
"motion lapsed" = dead I believe. :xsad:
 
(reply from the Laird's missus).....I treated "planning" for our retirement from a different angle. I didn't try to save! I simply ensured that we were debt free (including mortgages) by the time we were mid-50. i.e. old enough to know better / young enough not to care. We're both healthy, kids have left home and are (most of the time) self-supporting, no debt, credit card, overdraft etc etc...and we're buying the motorhome in cash. So when we take delivery next year we stop work, we pootle around the uk to fine-tune any teething-problems then take off to Europe, let out the two houses (one current, one from prior to end-of-laird's-batchelerhood) and live off the rental income and mobile-work fees that we pick up en-route / via-wifi.......so, we travel for as long as we want to / as long as our health lasts.....then when we come back we have a property to sell and a property to down-size from....I rather live NOW with all the blessings that we share together than worry about living for a tomorrow that for-all-too-many-people never comes...
Carpe Diem....
 
we have a similar plan already paid off the motgage and own one flat outright (rented out for £650 a month)and own another with my mother in law which rents for £750 we get half less fees,our house is a 4 bedsemi all paid for aswell will rent for easy £1500 a month so we should have enough to travel we still got a lot of saving to be done yet as i'm only 47
 
nobby &noo said:
we have a similar plan already paid off the motgage and own one flat outright (rented out for £650 a month)and own another with my mother in law which rents for £750 we get half less fees,our house is a 4 bedsemi all paid for aswell will rent for easy £1500 a month so we should have enough to travel we still got a lot of saving to be done yet as i'm only 47
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We do the letting ourselves the agents in the past being useless if there is a problem

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Through no fault of my own, with the exception of 3 very small (microscopic) pensions we have to live off the income of my state pension and the income from one small rental property that gives us £365 per month extra after management fees.

Do yo know what, we live life to the full, we enjoy what many suggest is a full and quite luxurious life and we aren't short of a bob or two to spend when we feel there is a need to do so.

We don't feel the need to go out too often for meals, we never have liked holidays let alone expensive ones, we live a very private life where we are more than contented with our own company and those of our 3 rescued Springers.

I am longing for the day in approx. 4 years time when my most beloved starts drawing her state pension but until then, you know what, no matter what life throws at us we will keep on living our own life and do so with a very broad smile on our collective faces!
 
Robert Clark said:
Could you please give an example of a 5% low risk investment?
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Hi Robert , I am not a financial advisor . If you speak to one they will explain everything to you . one of my own funds is called SEI balanced fund . investments work differently to bank accounts in that they can lose value as well as gain , but if you have time to leave your money invested they will out perform ordinary savings .

I had a dilemma whether to buy rental property or to invest some money , the fact that my investments could be cashed in whenever I wanted and could give a similiar 7% return outweighed the rental option ( and I have experience in the rental market ) .

Everybodies needs and expectations are different , so take plenty of advice and good luck .

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Langtoftlad said:
SEI Balanced fund 2015 performance 1.41% before charges (0.85%)
Source : http://www.trustnetoffshore.com/Factsheets/Factsheet.aspx?fundCode=IEFA2&univ=DC
:whistle:
Not easy to get a risk free 5% these days :cool:
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Absolutely , but take the previous years into consideration as well and it works out at 6.24% p.a. over 5 years .
As I posted above , " if you have time to leave your money invested "
There are lots of funds , with varying results , which is why it is best to pay an independent asset company to invest on your behalf .

You can get a risk free 5% at the TSB !
 
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colinw said:
You can get a risk free 5% at the TSB !
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... on a maximum of £2000 (anything over that is 0%) and that is 5% AER VARIABLE .
You have to pay in a minimum £500 per month.
You have to register for internet banking, paperless statements and paperless correspondence.
HOWEVER: you can have one account in your own name, one in your partner's name, and one joint - so if you can pay in £1500 per month you can (as a couple) have 5% AER variable interest on up to £6000.
 
Kirsten said:
then one day you will wake up and throw caution to the wind and just go for it.

/QUOTE]




That's the only way to go Kirsten, live life to the full and to hell with the consiquences!(y)
OR
Scrimp and save, make Parsimony your watchword, count your pennies while huddled in under the Duvet wearing your bobble hat, dry bread and margarine, water the milk, and leave it all to your family when you turn your toes up. Then sit on your cloud and watch em go on a world cruise.:(
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