Month-End: April 2022

A bit late in posting this but here’s my April Month-End report.

Income

Some good news from the Lady – she got a nice pay rise at work! Sadly, since Rishi Sunak believes that workers deserve to pay higher taxes, the increase in NI rates has swallowed up much of the pay rise and her after tax pay only jumps by £50 a month.

However, the HMG taketh and giveth – the rise in thresholds come this July will see an after tax payrise.

My pay was steady but I forgot to invoice for a week’s work in March, so I need to get that paid now in May.

Dividends

My side hustle paid £2,000 in April which was good. Other dividends from VCTs, shares and what not were practically non-existent – a seasonal phenomenon. They’ll be stronger in May.

Outgoings

First of all, my March figures were out by £400 and we actually spent £5,850. April was much better with a total spend of £3,600 which is in line with our normal family spend.

We did holiday in London in the month which accounts for some of the spending. I didn’t drink for Lent and that probably saved us £100+, although I’m more than making up for it now.

Net Worth

On the face of it, net worth was up £11k month on month but since my final salary pension jumped in value by £13k – which I had no control over – it’s really a £2k drop.

Still, given how the world is right now, a £2,000 decrease, can’t be seen as a total failure. I don’t have a strong exposure to tech stocks and have not gained as much – but with what’s happened to Netflix, Facebook and now Amazon, I might have dodged a bullet. Who’s next, Tesla?
My investments in renewable energy have been doing well which is some comfort. It feels like the stock market rally is well and truly over right now and we are in a strange place of rampant inflation, increasing rates, everyone being broke and war.

I managed to sell a few VCTs this month and reinvest the money in our LISAs & ISAs. I like the Lifetime ISA and fully intend to utilise it for as long as I can. In total our LISAs are worth about £70,000 and account for about 20% of our pensions (excluding my old final salary pension. I’ve written about the LISA before – here’s a link – and my opinion is unchanged. LISAs can help you avoid the Lifetime Allowance, are better than ISAs, are tax free when you raid them at 60 and you can even access them early if you really need it.

I’m about half way through my LTA – just hit the £500,000 mark this month! So with moderate growth, my pensions will outpace the LTA before long – making the LISA a nice alternative.

GFF LTA prediction

Saving for our old age has been a concern of mine for years now and if woke up tomorrow aged 60 with just our pensions & LISAs, then I think that we could comfortably retire on an income of £27,400 – and pay virtually no tax on that. There is something I’m not counting on though and that’s the UK State pension.

State Pension – count it or not?

There’s a good discussion point on whether you should count on your state pension if you want to retire early. Clearly, if you are retiring early it’s risky to pin your financial survival onto something you’ll only get when in your 60s. For me it’s almost 30 years away (when I’ll be 68) which feels like a lifetime away.

Anyway, I checked the Lady’s and my state pension entitlement (you can do it yourself here with the HMRC Check your State Pension forecast) and with a combined 30+ years, I estimate that our current statement pension value has just crossed over £100,000 threshold. I value the pension as being worth 12 times the current annual payment. If we could access it now, it would be worth almost £9,000 a year. Of course, will the “still alive subsidy” be around in 30 years? Who knows.

Unending upward growth

I don’t count this value towards my net worth but I do keep an eye on it and it’s nice that it’s passed this six figure milestone!

Thanks, GFF

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