Tax Return

I’ve just completed my tax return – pretty good for me – I have managed to complete and send it off a whole month earlier than last year!

I have managed to stay under the taxable dividend threshold for the year, by a few pounds but will have tax to pay on my savings which are over the threshold.

I am now looking at moving my savings into tax-free accounts to stay below the thresholds. With savings rates dropping they are not keeping pace with inflation so need to move them to somewhere that will!  More payments into my SIPP I think, although I then cannot access the cash until I reach 55.

I intend to fully utilise my ISA allowance this year now its up to £20k, I phase the money in monthly so doing well and on track.

While I am working – another reason to keep going at the moment –  is that I can contribute more into my pension/SIPP, I can contribute up to £40k which gives me space and capacity to move savings/taxable shares into a pension account while I can.

I am trying to hold out in a job until my BTL fixed rate mortgage term lapses so I can re-mortgage – something that’s easier to do while I have a salaried job. I am slowly reducing the mortgage to compensate for the new tax rules which will phase in over the next few years. It will be interesting to see how they have affected my tax treatment this year. I await my final statement.

Utility bills

Well, I know that British Gas has announced its price hike today.

I was looking at utility bills the other day. I have recently received my annual water bill and what’s funny is that it has gone down by a whole 1% <woop! woop! Get the bunting out! >

The usage rates have decreased which is great, 3% down, but the whammy is that they have put up the standing charge 3%. They have done this across all the parts of the bill, reduced the variable rate but increased the standing charge (fixed rate). So they are slowly sneaking the baseline cost up so that regardless of how much I reduce my consumption, I still end up paying the same.

I am just waiting for the usage rates to be raised next year then they have won – with there ‘stealth’ price increased. It’s all part of a long-term upward price plan.

It’s the same with electricity and gas – I have seen the standing charges go up so that people like me who are low consumption users are having their prices increased each year by the increase in standing charge. When the regulator made all the utility companies reduced their plans down to just 4 – it meant that those really great plans that favoured low users disappeared over night and all the baseline costs rose.

I was better off on a low/no standing charge plan with a slightly higher usage rate as this worked out cheaper. It still feels like a cartel, a fake marketplace.

July – how’s it going?

Not too bad I suppose!?

I am still working and the project is still alive and kicking wildly and my boss gets more and more of a political nightmare everyday. I have tried to switch-off and stop letting the environment rattle me and press my buttons. Its getting harder to fight the voices in my head telling me to run. I should just sit back, not stress and pick up the pay cheque.

It seems so long ago since my holiday – when it has only been 2 weeks – oh dear 😦

To try and ease the work situation, I have been doing some Yoga sessions – found them on YouTube – and they seem to be making a difference. As I spend most of my day working in a nightmare office then driving home to an empty house, I have plenty of time to overthink which is making me unstable. I have no-one to talk to, so sit and stew. I need to divert my mind from overthinking and distract it onto other things. The yoga is making a difference, my shoulders feel less tense and I am sleeping longer with less restless disturbances. Around me are people who are also p* off with their job, moral is at an all time low from the general vibes – so I should not feel like the only one. I can do the yoga sessions whenever I feel the need – on-demand. It’s good as I get better at it I can move onto more advanced sessions.

It’s been full on birthday season in my family. It was my birthday last month and I have had 2 family birthdays and a wedding to attend this month so far. I found an old dress and altered it so I could wear it to the wedding the other week, loved doing that as its a skill I have. I use to make my own clothes when I was a student. But as time progressed, it has become cheaper to buy clothes than buy fabric and make your own – the global economy in action. I need to start doing some creative activities as that will soon divert my mind onto something more interesting and stimulating to me.

I can be quite creative and need to exercise that part of my brain again. It feels like my brain is dying with the lack of suitable stimulation. Listening to Mad Fientist the other day suggests yet again that maybe a bit of ‘burn out’ is present.

I have had another pension statement/illustration through – yet another one saying I could get a forecast pension of £388 p/year on retirement. Yet again, nothing to write home about as the saying goes – here I am writing about in on my blog. Ha Ha! It worries me what I will have but it feels shocking for those generations younger that me.

I have been doing jobs around the house and sorting out insurance renewals for my rental and own home.  Things to take my mind off the troubles of work. I try not to watch TV especially the news which will just depress me.

I found some new books to read (kindle downloads) which may help me crowd the bad thoughts out of my mind. It’s nearly the end of the month and my finances are level tracking again. I should be glad that I am not losing money, I just don’t seem to be making it either, just balancing. I have just sorted out the rental info so I can submit them to my accountant and get my tax return completed for last year. The changes to the BTL environment will start to hit now as the phasing increases the tax burden.

I am now trying to setup some activities so that I have things to look forward to over the coming weeks. Breaking up the weeks and stop my overthinking.

Only a few more days left and I can then do my monthly update and see how its been.

Time to soldier on….

June – Monthly Update

This month seems to have flown by – some of this has been due to being on holiday! Two weeks off, travelling around Scotland. The weather has been great and I have felt very relaxed and carefree. I feel revived although I doubt it will last long.

I really don’t care about ‘The Man’, it’s been a terrible few weeks on the run up to my holiday and I …SOOOOO… needed to get out of the office. Another guy left the team too, he wasn’t liking the job and the office environment either  – glad I am not the only one feeling this way! He has managed to find another job so has run as fast as possible out of the door…

It’s just a matter of finding a new job and getting through the stupid interview processes that are in place involving online tests and multiple interviews. It used to be a simple process now its a long cycle of assessments and probing. The sooner I can escape the better. Permanent roles just aren’t out there, it seems that they are being offered as fixed-term contracts only. The way of the beast now…. “Nuff Said!

I am currently in contact with a recruitment agent about a possible role but I don’t hold out much hope – plus I need to get time off work to attend an interview! Not good when I have just got back from a 2 week holiday – “You want MORE time off?“.

How have my finances done? Pretty good actually, my expenses this month are down as I have been away, my saving rate is higher this month as a result. My holiday is normally a walking one, so no retail therapy and expensive meals out. I have been quite frugal and have been trying to find any way of increasing my savings rate and cut costs. I don’t think I can cut any more off my costs. Looking at needs not wants.

My actual net worth is still plateauing – as much as I add to the pot, it is just treading water making up for the fall in investment values. Overall since I started on this FI path my net worth has increased 6% – not very good in comparison to other FIers who manage to get double-digit growth. I started off on the path really well as there were so many things I could do to make a difference, so in my first year I did make a double-digit % but since then it has dropped off. I have exhausted any more avenues to reduce costs.

I have a bad investment allocation and have been reviewing and re-balancing to gain some growth. Most of my funds are now in ETFs and I have moved into cheaper funds and cut account fees. I will have dividend tax to pay this year and I am moving the shares into ISA and SIPP accounts to try and prevent this in future years.

My shares from a previous employer (ShareSave and Share Option schemes) have been hit hard by the fluctuating market and the sector they are in has been hit harder than most. I cannot sell all in one go due to CGT so need to sell chunks each year and spread the risk across the market by buying funds. The share price is down at the moment and they have been giving out special dividends so want to balance the sell offs with dividend payments.

Pension accounts have been growing although the fund prices seem to have taken a dive at the end of this month but overall I am still making positive inroads on this part of my FI planning and taking advantage of employer contributions and tax credits. They will not be enough to live on until I combine with a state pension – if it exists when I reach 67. I commented on this in my previous post as the annual statements are just a joke.

Back to working for ‘The Man’ tomorrow and I really don’t enjoy going into work. I could do with trying to find another career path as my current career feels like a dead-end as I am really fed up with the ‘s***’ and  BS that I have to put up with every day.

I hate being in an office all day and my health is really starting to be affected by it, my holiday has helped to illustrate this due to my lack of fitness. Need to find a way of rebalancing my life and getting my mojo back.

Self-confidence and Self-respect at an all time low in the work area of my life.

 

Pensions – Why are they so bad?

It’s that time of year when  I receive pension statements. I do wonder what the point of a pension is as every year their value may increase (a little) but their payout forecast just drops and drops each year.

This year my paid up personal pension is quoting a ‘massive’ £283 PER YEAR pension when I reach 60 – Wow that is really going to give me enough to live off! ** I did look at re-starting this pension but they want me to get a solicitor to sign off forms to prove my identity!? WTF ?! They know where I live, they have history on me and can check the DD details and ID check me electronically – I still pay contributions to them for something else – so why do I need to provide all this info, just so I can restart monthly payments as a fixed rate ( due to their rules(?) I can only pay in the amount that I was when I stopped it. Which is a pittance anyway).

I stopped it because it was a pension I took out when I first started working and my employer at the time did not have a pension scheme. I then moved job and wanted to join my new employer’s really good company scheme (it was a final salary!) – at that time you couldn’t have two pensions on the go so I had to stop this one. My final-salary pension is now deferred as I have left that employer and I know what that will pay out from 65, they currently guarantee me an annual value. Can I be sure it will still be there when I reach 65 – possibly not if BHS, Hoover, etc… are anything to go by?

The next pension statement was for my personal pension (a stakeholder) which I still contribute to, a small but regular payment. If I retire at 55 (I set the age to this when I opened it to give me flexibility to drawn from that age onwards if I wanted to), I will receive a whole £850 PER YEAR. Not even enough to pay my annual council tax never mind monthly living costs.

The next pension statement received is from my current employer pension scheme. Now, this scheme is a money-purchase – I don’t know anyone who has an active final-salary one now. It’s value is open to fluctuation and heavy interpretation anyway. If I continue to work for my present employer until I reach 65 (which I very much doubt – given the fact that I am looking to leave), I can potentially claim a pension of £3,000 PER YEAR.

I don’t get to claim my state pension until 67 due to the government changes, which could change again between now and then. I also cannot get a figure out of DWP either as due to opt-out years, my state pension value will have a deduction due to SERPs opt-out years, which they will not calculate until I actually reach state pension age. So all I know is that it will be less than £8k per year as I will have opt-out deductions.

That’s why I am so glad I am investing separately to gain some control over my future with savings via ISAs and a SIPP, I can see the value when I want to and do something about it. Well, at least try to do something about it! 🙂

 

May – Monthly Update

Wow – the year seems to be flying by and I have a bank holiday weekend ahead of me.

I have just been doing my monthly summary and can see that this month has been a bit heavy on expenses, mainly paying for my summer holiday which is only a few weeks away now and some seasonal spending.

At last, my SIPP is showing a profit! the funds have been slowly rising over the past month and they have now started to offset the original investment buy/costs. I have also received the tax reclaim this month  – I didnt realise it would take so long to get the tax reclaim into the account. My pensions are quick at claiming and investing the tax reclaim – but not this SIPP company. It makes me wonder if there is a ‘slight delay’ to enable them to accrue some interest during transit?

Anyhow, with the sun out and the warm weather, it has lightened my mood which is gratefully received and required. I am counting down to my holiday and time away from my workplace. ‘The Man’ is tiresome and so full of office politics at the moment it might as well be them participating in the general election. Things are now accumulating on the project I am working on and the findings are not good. It may mean that the project is canned, if so, they have no need for me long-term so my time there could come to an end quicker than I thought. Which is fine, that’s the reason for the FI fund – to not be worried about the need to work. Its about having choices and the ability to live without being tied to ‘The Man’. Some independence and self-sufficiency.

My FI fund is looking good at the end of this month and is almost back to the level it was at when I took my ‘FI break’. Pension funds are looking good, making good gains and the SIPP is now looking healthier.

I have increased my ISA monthly savings amount to take advantage of the new allowances. Being able to put upto £20k into an ISA will really help me as I can move money that is idling in savings accounts into the ISA an earn some better income.

I also want to sell some of my non-tax sheltered shares and move the money into pension, SIPP and ISA accounts and the new allowances give me the freedom to do this.

Happy May bank holiday everyone, I am off to enjoy the sun.

May Progress

After my last post, I have had another check on progress and updated my accounts. I am still saving 60% of my income but it isn’t making much of a dent on my net worth, this still remains flat.

When I first started off on this path, the growth was rapid and a lot of that was down to making changes to behaviour and spending that meant that I made quite big impacts on my net worth. These have now tailed off.

I hit a wall 2 years ago when I was made redundant for the second time. I took the first (and only job) offered so I could retain an income stream. Everyone else was getting a job and it would have looked bad if I hadn’t had something when we all ended our redundancy notice. It was a bad mistake, the place didn’t fit and I suffered it for 6 months to see if it would change but it didn’t so I just left. I had no job but felt better than sitting in a horrid work environment. I decided to have an ‘FI holiday’ and took 6 months off (3 months off as FI + 3 months actively job-seeking) before I was back in employment.

My net worth did drop a bit during my ‘FI holiday’ as I used my funds to live.  (Well, my dividends were used as income! I did not use any capital). When I eventually found a job and starting earning again, my fund had lost some value but now was the time to grow it again.

Over the past year I have seen that my net worth has fluctuated. After the drop, I expected it to pick up but the external factors of Brexit and economic instability mean that my fund has not grown at the same rate that it once did. My dividend yields have dropped this year. Dividends within my ISA and SIPP are automatically re-invested but I am not making the same gains as I once was.

I am investing into my ISA, SIPP & pensions to use tax free allowances on a monthly basis and then any surplus into cash savings. I am considering pumping all the surplus cash into my SIPP and pensions but it means I cannot access this until I am 55.

My SIPP is currently recording a loss. I had opened the account by transferring two very small company pension funds (less than £2.5k each) into this account to consolidate them, then did a bulk buy to get the money back into the market, just as their prices dropped. I can see that the account is still in the red but this loss is reducing each week so it should move into profit by the end of the year. I am now topping up this SIPP account. While I have an income I will push money into saving hard.

The path seems to be faltering but I will try to continue to aim for the line. It seems so close and yet so far away too.

I am looking at side hustles and other income stream opportunities so I can move away from working for ‘The Man’ and working for myself with the support of an FI fund.

I am looking at any options so if anyone has any suggestions let me know…