Hurray – sorted my tax return details for Apr 2015

I have an accountant that sorts out my tax return for me and they send me a checklist that I need to fill in and documents that I need to provide.

It has taken me a while to get all the documents required with all my ex-employer sell-offs and re-sales, its not made things simple. It’s annoying when you have to chase up information from companies you have stopped working for. You cannot just go and find the department and camp out until you get the info in your hands.

I have never met my accountant face-to-face before but when I dropped off the documents, I had a chance to meet her. It was nearing the end of the office day and she was happy to chat. I told her I wasn’t working at the moment “a lady of leisure”, enjoying the summer debating what to do next.

We discussed the way the workplace is moving and how employers are now looking to move to flexible employment and how more people will be employed under fixed-term rather than permanent contracts so that employers can decide whether to renew or let you go when the contract reaches its term (without the need for redundancy or pay offs).

I said that I may be back soon to discuss setting up a company, she said that many people are moving to that working model especially in the engineering and IT sector. She could quote examples of local company ex-employees that are now working as one-person limited companies as it was the only way they could get employment. So much for the Government’s drive for decent wages….see the info on the City Link debate – “Were they employees or self-employed?” never mind the zero-hours contract discussions.

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Wow – is August nearly over?

I really don’t know where this month has gone, it seems to have rocketed by without me noticing.

I have just been updating my accounts and like plenty of other FI blogs – been watching my investments drop in value 😦

I am not too disheartened as I am watching some specific stocks with a view to invest some of the sales funds from July (I sold some of my old employer shares, from share saves, I hold too many and need to diversify). The prices are not right for me yet to invest, I do wonder if it will be a good thing to buy individual shares outside an ISA wrapper – but I am continuing to invest monthly sums into my current ISA funds up to the annual limits thereby diversifying my investments.

I have had my house insurance to renew this month so that’s one lump sum expense to account for but even with this in my expenses column, I have managed to reduce my expenses this month so I a really chuffed!

I normally budget groceries at around £100 per month which is probably quite a lot for a single gal but this includes any food/drink bought when my boyfriend/friends/family visits and it also includes household cleaning ‘stuff’. I haven’t bought much this month, I have been using up freezer and store cupboard supplies and looking back on my accounts this month, I have only spend £36 on groceries so far!

I have been looking up recipes and modifying some where necessary to fit the ingredients I have to hand and its been working out really well. It seems to have really made a difference to my grocery bill plus I have enjoyed making my own food, knowing there are no nasty unhealthy surprises – excessive sugar/salt, etc… I took a trip along the canal the other day to collect blackberries and have a bumper amount split into bags and stored in the freezer for use later.

One perk I still have is going to the hairdressers to get my hair cut and coloured – yes, for plenty of frugals out there this is a luxury – it is one that I am currently happy to maintain until finances suggest I need to give it up. When I was a child, the family lived very frugally and my mum use to cut my hair – I never visited a hairdressers until I was in my late teens. Even then it was to a hairdresser training school so the haircuts were cheap (£5-£7) and not very good so past experience has put me off going to a trainee school to get a cheaper haircut.

So while at the hairdressers the other day, I was reading the usual gossip mags (like you do – they’re free) and found some great recipes for using blackberries – a quick phone pic later of the details and I now have some more ideas for using up the blackberries I have in my freezer.

The weather forecast isn’t looking too good for this week but when there is a gap I will go back to the canal and pick some more blackberries and freeze. My brother has a cooking apple tree in his garden, he doesn’t want the fruit so he is going to give me the apples so I can use these with the blackberries. Time to try out some dessert recipes and possibly even some jam making (I have never tried to make jam before). There’s nothing like learning new things when you have the time 🙂

Back to the rat-race?

I am not too sure on that one. I have had 3 interviews for the job I applied for. It would be joining the rat-race doing work I am qualified/experienced at doing and right on the doorstep – the nearest job I would have ever had!

The “BUT” appears to be that they cannot decide whether to offer or not. Now this is all second-hand via the agent so I cannot really get much of a steer on the real reason. I don’t think quitting my last job went down too well – what would you have done if you had been interviewed for one job then give another on arrival and when you ‘challenged’ it, get told ‘tough’ this is the job we want you to do. Talk about being mislead! Their response was “do as you are told or leave” – so I left.

Anyhow, the agent has told me to wait another week and see if they come back with an offer – I wonder if I am second choice? A stand-by should their first-choice refuse their offer? I am not sure if the agent is bargaining for commission either?

I am not too worried, I will continue with my FI life and look at other ways of providing some supplementary income to bolster my FI honey pot funds.

Another work pension…of pennies

Having left my last employer, it has taken their pension company 3 months to catch up with the changes and send me information on what I can do with the pension pot (pretty measly amount) – I think it is current about £900! Wow – really going to support me in my retirement years. I had paid in over £1000 but the unit price has dropped considerably since then. (I was under auto-enrollment rules so had to join which has left me with this pennies pension!)

Anyhow, their paperwork has provided me with options:

  • continue paying regardless of my new employment status (self-employed, employed,etc)
  • continue paying with my new employer making payments into it.
  • stop paying and leave it invested
  • transfer the value to another provider.

To help me with the first 2 options they have provided me with an illustration (assume retirement at 65):

** if I keep the money where it is and “they achieve investment growth each year” (rates used:  -0.4%, 2.4% & 5.3%). I can receive a value between £35 and £162 per year!

** if I pay in a specified amount per month until retirement and investment growth is achieved using the same rates as above. I can receive anything between £868 and £2570 per year!  (The amount used to generate this illustration is actually below the £2880 amount that can be paid in by a non-working person per year under HMRC rules)

The pension company have not provided any details on how I can transfer and what the transfer value would be? They are bound to take a cut as my last employer scheme did when they forced me out of the scheme – I lost a third of its value. So much for fairness in the pension industry!

Again, something that is annoying me at the moment with these new pension reforms. We have existing pensions which the companies will not offer the ‘new rules’ on and say we have to move them to new schemes if we want to use the new rules such as draw down – oh – and in the process fall foul of the transfer fees which are excessive and detrimental to the final value received. Just another rip-off scandal in the making.

The pros and cons of FI

I read Jim’s guest post with interest (click here) on early retirement guy after seeing comments on it on other sites. It did make quite amusing reading and I can relate to quite a few of them.

Spreadsheets and ‘Enough’ have been the thoughts on my mind on the run up to and the post jump to freedom. As mentioned by a number of FIREs, when do you jump, have you considered all the possible risks, could you survive a big down turn in the stock markets, what if the government change their policies… the list goes on.

Eventually you just have to say …GO…you can always try and get a job later. Jim has noted that when you look at it most of those who are free, they are actually working (income from their website(s), side-line hustles (writing/coaching), seasonal work).

The loneliness is definitely something I can relate to at the moment. Having quit my job and spending the last 3 months not working, I have found that when you are out and about, it is full of older retirees or shift workers or young mums! I don’t go to coffee shops as I am frugal and budgets don’t cover a daily coffee visit 🙂

I have been contacted about going to social events with ex-work colleagues but don’t want to listen to their work conversations which will mean nothing to me, I’m not in that inner-circle any more. Some will use it as an opportunity to have a go at me, saying I am a loser for dropping out of the workplace – having been made redundant twice and walking out of a job – makes me sound like I am incompetent. The work sphere I was in was quite cut-throat and competitive, working for FTSE100 companies most of the time. Everyone is always watching their back as the hatchet periodically comes out to remove people from the office.

Plus as I meander through my day I don’t have lots of interesting things to talk about with them. They are not interested in my foraging, cooking and volunteering escapades. They would expect me to be on a constant holiday, travelling and basically treating this freedom as time to travel and visit the world – again – I don’t have the money to do this. My FI income covers my expenses based on my working life phase – which didn’t include holidaying every week and travel to different countries every month.

Health – this is one area of my life that has improved from being free. My blood-pressure has gone down and that constant stress headache has gone. I am now cycling twice a week over a 16 mile circuit and walking to food shop. After listening to a Radio 4 program on strokes the other day (click here) – I can now see how being less office bound is a benefit! I can be grateful for that.

I listen to Radio 4 quite a lot while pottering around the house and have been listening to the series called ‘The New Workplace‘ . They have been looking at changes in the workplace and how the old style permanent workforce is being replaced by flexible and disposable workers. I work(ed) in IT and that has been moving to contracted workers for quite some time now. It was one thing having temporary contractors for 3 or 6 months but now employers are moving to fixed-term contracts, removing the true permanent employee. The worker is treated as a employee and paid the same as a permanent employee (may be even a % premium above a permanent role would command) – but has a fixed term. They are seen as cheaper than contractors and more flexible than true permanent employees as the employer has the ability to let them go at the end of the contract or renew them based on business needs.

I am not jaded by FIREs yet….maybe that is something that comes with time. I have more time to read them and formulate plans for either making money work harder for me or improve my frugality.

State Pension – Update

I received my pension statement today, so I now know how many qualifying years I have accrued. The info from DWP also included a booklet explaining some of the calculations and that the quotation I have is based on the old scheme and that I will not be able to get a proper calculation until the new state pension scheme starts next year (after 6-Apr-2016). As part of the new state pension scheme, DWP will be calculating a ‘starting amount’ and this will be used as the basis for the minimum value you will receive (it acts as a threshold for those that would have received more under the old scheme and are very near retirement).

In the meantime, I know I have 25 years and need to accumulate 35 years in total to qualify for a full state pension at 67. This gives me 20 years in which to accrue the 10 years required. These figures are all based on values up to 5-Apr-2015 so I will have this year’s qualifying contributions to add. This is where the booklet was useful as it states what the minimum earnings amount is to achieve a ‘qualifying year’. There are different amounts based on whether you are employed or self-employed.

Employed – in tax year 2015/2016 the minimum amount is £5,824.

I have just managed to scrape in this tax years ‘qualifying year’ based on the earnings I received before I quit the job. For the start of the new state pension calculations I will have 26 qualifying years and another 9 years to accrue. Seeing a single digit here is a relief, it seems like an achievable target.  ** Although it also shows how close to retirement I am! 

Based on the current calculations, I would receive a pension of £96 per week under the old rules and £100 under the new one. I am not sure if this is the true value as the confusion comes in when the SERPS/contracted out element is calculated. It is unclear in the booklet how this will be work just that a deduction will be made based on the number of contracted out years you have had. I am not sure how many contracted out years I have – I know I had some due to a company scheme – so I don’t know how much will be deducted from either of these values, it is not part of the statement.

This does not seem much to live off and would just about cover my basic bills (council tax & utility bills as they stand today), it would not leave anything left for food or other living expenses? If any of these bills increase above the average earnings growth used to calculate the new State Pension then it would be impossible to live. This just illustrates how important it is to have a money pot to dip into to enable you to live a comfortable retirement. Whether looking for an FI future or not, savings are important to have.

Insurance renewals

I have just renewed my house insurance and yet again the renewal quotation has gone up – this time by 40% compared to going to their site and filling in the ‘get a quote’ form as a ‘new customer’ – all details exactly the same – other than the NCD years. I did a comparison quotation too so I can see what the prices are like across the other insurance companies before renewing to get the best value for money. I have saved myself £130 on the renewal quote price.

What I have noticed is that insurance companies are changing their websites so that they will hold card details and do automatic renewal next year !  If I don’t want auto-renewal I have to call them and have it removed from the account.

This is where these insurance companies are now trying to hold onto policyholders and rip-them off. I will be waiting for the new policy details to come through the post then ring their helpline and remove my card from the auto-renewal option. They are hoping to catch people who are lazy. I am not having this!

It is bad enough with car insurance, I bought that online and I cancelled my auto-renewal last year and bought a policy with another company. At the end of the month, I noticed that the old insurer had still taken my renewal payment and I had to call them to get a refund! They agreed that the account had a record of my call and the request to remove the auto-renewal but ‘due to a technical fault’ the payment was taken anyway.

Watch out when renewing your insurances online this year, especially as the insurance tax goes up in October so I am trying to get all my insurance renewed before this new tax rate is applied. Happy insurance hunting….  🙂