First ever budget review…

finance

budget review july 17 - First ever budget review...

So I have finally gotten around to doing a budget review. As you can see I went way over budget in July but thankfully I had more money coming in so was able to manage everything. I actually had £10.70 left in my account so something has gone wrong with my calculations.

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My student debt

finance

76440174 pa loans - My student debt

My first foray into Uni life was in 2002*. I had been to college for 4 years instead of 2 and came out with an Advanced GNVQ and AS Levels that I could do anything with. Due to this I ended up (as I felt I had to go to uni) at the only Uni that would take me, Portsmouth, on a foundation science degree. I lasted 4-5 months and came to realise that I couldn’t stand a brick uni at the time. I later came to realise I was no good at a science degree too.

Due to only being at uni 4-5 months I didn’t get the full loan amount, in fact I didn’t even get the full year. I came away from this uni experience with £2577.30 of student debt with nothing to show for it. I have been paying this back ever since April 2003.

Now £2577.30 is actually a small amount and I should have been able to pay that back within a few years not the 13+ years it did take.
You see in the UK you only paid back 9% above £15k (at the time), a much better way of repaying than America in my opinion. For the first 2 years my income was under £15k so I paid nothing, but I was still incurring interest. I actually started repaying in 2005 & continued to pay for the next 4 years as I was making just over £17k, I then waited til the end of 2011 to start repaying again, this time I was making over £20k due to the higher living allowance for working in London.

This continued till I moved to Worthing in 2014, so nearly 3 years. I have made over £15k ever since moving here and have managed to repay all my student debt. Some months I was only paying £1 & some months nothing at all, but with my pay being back dated, I managed to actually over pay and I’m currently in the process of reclaiming.

I am just about to send of my evidence and should get back around £200!

2015-16 = £393
2014-15 = £18
2013-14 = £85
2012-13 = £675
2011-12 = £224

Before 2011 I don’t have my p60 so can’t look up what I paid.

With me going to uni in September I will amass more student debt, debt that I will never pay off and will be written off after 30 years. I have to pay 9% above £21k this time round. I doubt I will ever make £35k for never paying over £100 per month.

repayment - My student debt

*I since went on to attempt Criminal Justice, IT & Molecular Biology degrees at brick universities before settling in on The Open Uni (an online uni) in 2008 even though I continued to changed my degree! With The Open Uni I only got grants or paid cash.

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First step to investing

finance

Investing coins increasing - First step to investing

For any readers that might actual be here, this blog hasn’t turned into a purely personal finance blog, I am just starting to think about my future and have been a bit slack with my fitness.

I previously posted about our debts and future here and I opened up a S&S ISA. As of today I have £25 in the account and by June 2017 I’ll have £200 in there waiting to invest. I am thinking of mainly investing in funds rather than shares and have three in mind. I am not sure yet whether to invest a small amount in all three or build one up to £1000 then invest in the next one etc.

I am also planning on saving £50 a month somewhere else. I can’t decide if I should open a Lifetime ISA or invest in a 2nd NHS pension. I think I need to get advice for someone who knows about these kinds of things. I kind of like the idea that I would get a lump sum with the pension and a small income each year. With the Lifetime ISA it would all be just sitting there staring me in the face.

I also want to save an emergency/rental deposit fund so need to fit that in somewhere too.

My main aim with all this is to be able to live off the dividends each year. As I am getting an NHS pension I have already said good bye to the state pension.

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Aiming for a retirement fund

finance

At present I save nothing for my retirement other than my NHS pension. I have been looking at ways to improve me income in retirement. An income of £2000 a month would be £24000 a year!!!

I am going to start investing in shares and funds through my S&S ISA, pay into a Lifetime ISA (when they become available next year) and I have been thinking of improving my NHS pension.  There are different ways of doing this:

  • Additional Pension
  • Early Retirement Reduction Buy Out (ERRBO)
  • Money Purchase Benefits
  • Stakeholder Pensions
  • Bigger Lump Sum Purchase
  • Half Cost Added Years

I am thinking of going down the Money Purchase AVC route and taking out an additional pension through Prudental. I would be able to take 25% as a lump sum, the rest needs to be used to buy an extra pension. I shall send off for more information and take it from there. I have yet to see if I will stay within the NHS for the rest of my career but at this point it is most likely.

With just £50 a month I would get a lump sum of £9790 and an annual income of £1520. Not a great amount but with my main NHS pensions I’d be looking at around £10k annual income 🙂

I am also playing around with the Additional Pension calculator to see if that route is best.

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