Any suggestions of what to do next with our finance

D

dublinaam

Registered User
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29
Self Age 48
Spouse age 49

Income
Annual gross self: PAYE worker 124k. Discretionary bonus approx 100k
Spouse- self employed approx 100k

Assets and liabilities
Family home value 1.2m with 200k mortgage. Fixed at 1.95% until april 2027

BTL value 230k. 85k mortgage outstanding maturing Oct 2029. Tracker +0.6%.
Monthly repayments 1215.
Monthly rental income 1700

Trade republic self - 50k
Trade republic Spouse- 50k
Lightyear self - 20k
Zurich fund self -50k (Contributing 2500 a month).
Shares 20k
Cash at bank earning no interest- self 10k
Cash at bank earning no interest- spouse 40k
Pension defined contribution- self - current value 430k. Employer contribution 14% (will rise to 19% when 50)..i contribute 25% so maxed out.
Spouse pension -200k . Pension is from when they were paye so not contributing at this stage(only just starting to earn as self employed).

No other borrowings and just made some home improvements so nothing major needed. Could extend to add more bedroom space but not a must have.


Interested in getting views on what else we could be doing
 
Well, the obvious thing that jumps out at me is that your spouse needs to start thinking about contributing to a pension again.

On a back of an envelope calculation, your rental property is returning around €7k p.a., after tax, on €145k equity. Not awful by any means, but hardly stellar.

It might be worth hanging onto the rental if it’s worth less than you paid for it (i.e. if CGT wouldn’t come into the picture on a sale).

Personally, I would be inclined to liquidate your other after-tax investments/deposits and pay off the mortgage on your PPR, notwithstanding your cheap fixed-rate.

Keep it simple.
 
Is spouse true self employed (sole trader) or proprietary director of Ltd company? If the latter (my status), I was advised that I could make a significant lump sum contribution to a pension.
 
time to plan said:
Is spouse true self employed (sole trader) or proprietary director of Ltd company? If the latter (my status), I was advised that I could make a significant lump sum contribution to a pension.
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Currently sole trader but speaking with accountant to see if setting up company is better way to go
 
Sarenco said:
Well, the obvious thing that jumps out at me is that your spouse needs to start thinking about contributing to a pension again.

On a back of an envelope calculation, your rental property is returning around €7k p.a., after tax, on €145k equity. Not awful by any means, but hardly stellar.

It might be worth hanging onto the rental if it’s worth less than you paid for it (i.e. if CGT wouldn’t come into the picture on a sale).

Personally, I would be inclined to liquidate your other after-tax investments/deposits and pay off the mortgage on your PPR, notwithstanding your cheap fixed-rate.

Keep it simple.
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Wouldnt be much CGT but feel I would hang onto BTL as kids may want to use. BTL mortgage will be paid off by time they would look to move out
 
Gordon Gekko said:
Hard to see the merit of personal investments whilst carrying debt.
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I don't understand the tax implications of mortgages on a rental.

But for the PPR mortgage, I agree that it doesn't make much sense to have cash earning no interest. If that mortgage is with Avant for example, the OP could pay 10% of balance now and 10% in January. That would be an easy start without reaching for a calculator or Excel.
 
dublinaam said:
200k mortgage. Fixed at 1.95% until april 2027
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dublinaam said:
Trade republic self - 50k
Trade republic Spouse- 50k
Lightyear self - 20k
Zurich fund self -50k (Contributing 2500 a month).
Shares 20k
Cash at bank earning no interest- self 10k
Cash at bank earning no interest- spouse 40k
Click to expand...

Just clear the mortgage on your home. You might argue that you get a higher return after tax on some of your investments. But it would marginal.

I am a strong believer in keeping one's financial affairs as simple as possible.

You definitely should stop the Zurich fund and pay it off your mortgage.

Brendan
 
dublinaam said:
85k mortgage outstanding maturing Oct 2029. Tracker +0.6%.
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So you are paying 5.1% on this at the moment.
So, after tax, you are paying 2.5%

But this will come down when ECB rates come down.

I think you should clear this as well.

I don't think it makes much difference which one you clears first.

Brendan
 
I agree with the above. 5.1% is 2.5% after tax. I’d take the guaranteed returns of 2.5% plus 1.95% combined with the warm glow of being debt-free.
 
How many kids do you have and what are their ages?

Your financial profile is scarily similar to mine, except I don't have a BTL and my pension is larger!
 
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