Savings and Pension advice

[Lostatsea]

Married couple ages 37/38
No children
Salary 1 - 80,000 private sector no pension
Salary 2- 70,000 public sector with pension
No credit card
Savings approx 5k
Car loan 15k -88 per week
Mortgage 1k per month- 265 remaining. CMV approx 280k

As you can see the savings situation is very weak however we now would like advice on the best way to proceed in order to improve our position.
We would like to move house and use the current property as an investment property ( currently on tracker rate +1.25%) as it would appear that this may be a better option for us than attempting to start another pension at this stage. We are in a position where we can have family assistance towards a deposit if necessary. We expect to be in a position to save 2-3k per month going forward. Looking for general advice as to the best way to proceed.

 

[Sarenco]

Hi Lostatsea

Do you really have to move? It strikes me that you would be better off staying put for a few years and building up some decent savings and home equity.

You should probably clear the car loan as soon as possible - it looks like an expensive debt.

Saving for retirement through a pension product is far more tax efficient than operating a rental business. I wouldn't put off starting a pension for too long if I was in your shoes.

Does your lender offer a tracker mover product? That often works out as a better deal than retaining a former PPR as a rental. Here's a fairly detailed post on the topic -
https://www.askaboutmoney.com/threads/keep-apartment-as-rental-or-move-tracker.203907/

Hope that helps.

 

[RedOnion]

We would like to move house and use the current property as an investment property ( currently on tracker rate +1.25%) as it would appear that this may be a better option for us than attempting to start another pension at this stage.

Have you worked out the numbers on this? I'm guessing based an market value it would rent for about 1500 - 1600 per month? After tax, that won't pay your mortgage, so you'll be using your own money to top it up. The commitment will count against you when you apply for your mortgage.
A pension should be a better option.

 

[gnf_ireland]

We expect to be in a position to save 2-3k per month going forward.

Hi OP
I would ask why the savings have been so low over the last while? You don't have to answer publicly, but you need to know yourself and not be under some strange illusion that savings are going to magically appear from no-where now. Its not as is you were saving for a house etc, as you have that for at least a decade given you are on a tracker.

Three things I would focus on:
1. Build up a reasonable nest egg to cover between 3-6 months living expenses in the event the private sector person loses their job or whatever
2. Clear the car loan asap. There is no reason a couple on 150k should require such expensive debt
3. Start a pension fund and get that moving along, with reasonable enough contributions

Forget about the investment property for a while - property prices are quite high at the moment, the regulation on landlords is erratic and the taxation on rental income is quite high. Now would be a very poor time (in my personal opinion) to enter the rental market business - when a lot of seasoned landlords are leaving it !