Year-End: 2021 Review

This year had been a great year for the Gentleman’s Family Finances. For the first time ever, I no longer worry about money and in general, financial life is bliss.

Enough humble bragging, we’re lucky to have money but we’ve worked hard for every penny. I suppose now it’s our money that is working for us with our financial returns surpassing our returns from labour. That’s what Financial Independence looks like – except we are subjects to the whims and fancies of the markets and monthly swings in net worth can eclipse what we both earn in a year.

This year I’ve largely tuned out to the markets and don’t lay attention to what’s going on. I am making time for what’s important which is family.


Last year we spent £58,000 which is £10,000 more than our income. I only actually discovered that there now when reviewing our numbers. Ordinarily if you spend more than you earn you’re in big trouble! But years of saving have meant that we have the funds available. Just because we have a cash sink of almost £5,000 a month doesn’t mean it sinks us – money from elsewhere can be spread to cover it.

2021 GFF Spending

Spending did creep up over the year as we did more things and travelled more. We love travelling and can’t just sit still at the weekends and holidays doing nothing. So in 2021 we had a number of great holidays like weekends in the Trossachs, Cairngorms, Ayrshire. Holidays in Bristol, London and Birmingham and Yorkshire. Money well spent.

For 2022, I expect that spending will recede somewhat as our nursery costs drop but we do have a programme of spending for the year that will of course add unexpected costs – who said there was no such thing as an out of the blue bill?


Total take home pay for the year was £48,000. The Lady stayed employed the whole year and even got a pay rise! My hours at work were up and down and turnover was around the same as 2020. I’m happy not busting a gut to earn every penny – the balance I have at the moment is fine. This figure doesn’t include pension payments by the way – but it is the money that is going into our current account each month and goes to paying for all of our spending.

Net Worth

Annual increase in net worth was 15.6% or £160,000 to £1.18m. Best performer was probably the side-hustle which added £36,000 in income for the year. The house went up in value by about 10% or £27,000. ISAs increased to over £200,000 in the year. Non-ISA investments were largely flat – mostly made up of a beer company which I’d like to sell (at some point, maybe 2025?). VCTs gave a profit of £18,000 for the year, a 21% return – making keeping the good run running & dividends of £7,500 helped cashflow.

On the Liabilities side, these dropped by around £8,000 over the year due to paying off the mortgage bit by bit and movement of stooze debts. I’ve got a new stooze card.


Amazingly, our total dividends including money from the side-hustle (more like investment income) actually surpassed our take-home incomes this year. This doesn’t include our SIPP/LISA income – just money which is free for us to use now. Of that money, 75% was from the side-hustle which is good but I’m a bit over-reliant.

Key Performance Indicators

In general everything looks great when your net worth grows by 15.6% in the year – or 9% after inflation. Stripping out income and outgoings I grew our wealth by 14.4%,  But the high spending puts a dampener on things. Fire Funds were up 13%, pension funds by 18% and housing equity up by 50%. Our withdrawal rate sits around 5.4% at the moment and for FIRE funds it’s 13.7% – the target for 2022 is 4% and 8% respectively. This will be achieved by reducing spending and increasing net worth (especially in FIRE funds).

In general everything looks great when your net worth grows by 15.6% in the year – or 9% after inflation. Stripping out income and outgoings I grew our wealth by 14.4%,  But the high spending puts a dampener on things. Fire Funds were up 13%, pension funds by 18% and housing equity up by 50%. Our withdrawal rate sits around 5.4% at the moment and for FIRE funds it’s 13.7% – the target for 2022 is 4% and 8% respectively. This will be achieved by reducing spending and increasing net worth (especially in FIRE funds).

How does my performance compare?

Growth of 14.4% beats Vanguard’s Life Strategy 60%  of a measley 8.2% but VWRL trounced me with 18.4% growth. I’m happy with the performance overall. I’ve got most of the family finances on autopilot and besides the side-hustle I don’t get too involved with making my investments more active than they need to be. If I wanted, I could strip out the final salary pension and say our return was 18.0% for the year – but who wants to bend their numbers just to make themselves feel better? Plus, we’ve more than enough in life to not need to get desperate to impress strangers on the internet.

Pension Contributions

We paid just over £15,000 into our pensions over the year. This was a mix of the Lady’s employer matched pension and SIPP payments for me from the company. Our pensions are very well funded – to the point that we could happily retire if we were 60 now – so pensions are a priority. The Lady’s pensions are a lot smaller and we’ll build that up for her. I’ll probably stop altogether paying in.

We are pension heavy

We did rationalise the Lady’s pensions – moving old ones to her SIPP. It’s easy to do and keeping them all in one place is much better. I tried moving her current pension with the government’s NEST to her SIPP but was told “NO!” but I managed to ditch two AEGON ones – another case of “bye, bye AEGON”.

An Embarrassing Pension

My own personal pensions briefly breached the £0.5m mark in 2021 but fell back in the last week in December. £500,000 sounds like a lot but it’s only about £20,000 on a 4% SWR and that’s before tax! But still, it puts me on a collision course with the LTA – Lifetime Allowance. If I don’t contribute another penny and my treasure chest grows at 5% and the LTA of £,1073,100 rises at 2% I’ll be above the LTA in about 26 years (2048). If growth is 7% it’ll be in 13 years (2035).

Simple Growth Calc.

These simple calculations are easy to make and some people on twitter spend all day talking about the consequences. By the way, all this assumes no more money added by the way. I think that my pension is now full for life.

Pension Growth Vs LTA

My advice for Pensions are a bit like in Arrested Development when Michael was teaching George Michael to drive the stair car.  

“Pension basics: In order to get this thing up to a minimum speed, you’ve got to jam on the contributions for about a decade, okay? But in order to avoid the LTA, you’ve got to get almost immediately back on the brake pedal, ’cause you’ve got a punitive 55% tax ahead of you.”

Arrested Development – Michael Bluth

When you look from a UK perspective, the lifetime allowance is a bit of an annoyance for anyone reaching for Financial Independence. It’s worth keeping it on the horizon – and for me that means no more pension contributions. My alternative of choice are 1) fund the Lady’s pensions 2) LISAs & 3) VCTs 4) Accept and put up with it and lay my taxes!

Plans for 2022

Looking ahead, I have some invoices due to paid soon and a strong funnel of work and lower nursery, meaning we’ll have a surplus of cash. I am considering investing in  Junior ISAs for the kids or possibly VCTs or maybe an electric car. I’m also looking at a green money portfolio – something fun where I invest £100 a month in a company that’s involved in the path to Net Zero.

Good thing the Lady doesn’t know about my blog or she’d have her paws all over the cash! How was your 2021? What do you think about this post, let me know.

Thanks, GFF


  1. Hi GFF
    One observation the LTA is frozen until at least 2026, so you may need to apply that brake as you say!


    1. Yeah – I didn’t want to write too much about the LTA. It is frozen and I live in Scotland which might complicate things at some point.
      Plus there’s no guarantee that it’ll increase again in 2026 and changes to pension rules are a cert.
      Brake is firmly applied.


  2. Some nice returns for your household over the last year congratulations. Urgh pension LTA, I share your pain. I made significant pension contributions over 3 years in order to use up some carryover. Suing similar projections to yourself indicate I’ll breach LTA so I’ll likely scale back contributions to employer matching levels.

    However, scaling back contributions to much lower levels increases my income tax levels and decreases my employment motivation.

    It does make a significant change when nursery costs start to dwindle doesn’t it.


    1. Luckily I don’t think that I’ll be a 40% (or 41% in Scotland) tax payer ever again – so I’m not too affected by the LTA.
      But as unfair as the LTA may seem, it’s hard to find having over a million quid in your pension to be a very bad thing.


      1. A core issue of the LTA is that it can heavily influence the decision for someone to exit the workforce, scale back their hours or at least turn down overtime and stop seeking advancement.

        Anyway, it could be much worse and the are many system quirks that can have undesirable outcomes.

        Liked by 1 person

  3. Oh to be in a position where the LTA is a problem to be considered! 🙂

    But I guess it’s one less thing for me to think about.

    Anyway, nice returns overall, well done. I didn’t do quite as well, nor as badly as I thought – nothing to write home about, just steady progress heading in the right direction.

    Liked by 1 person

  4. When I can be bothered I do my end-of-year calculations on 5/6 April. I’ve largely missed the great stock market boom of 2009 – 2021 though we did well in 1987 – 1999 and our gilts did well 1999 onwards. Still, we’ll probably miss the great stock market crash of 2022-2025.

    Sages say “If you don’t need the return don’t take the risk.” That’s all very well but how do you know whether you’ll need the return? An inflationary gallop may mean that everyone will need the return.


    1. I’ve got a lot invested in very boring renewable energy projects and their returns are around 8-10% IRR. This ensures a decent return without and sleepless nights but no massive gains.
      But I take the attitude that you only need to get rich once and when your investments are more like a gamble than a safe bet, you put yourself at unnecessary risk.


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