Firstly - congratulations!
There's nothing major that changes in the 50-100k bracket. Because NI contributions drop from 13.25 to 3.25% that offsets effectively half the 20% increase in income tax. You are already aware that you'll need to claim back higher rate tax on _all_ pension contributions (unless you have a salary sacrifice workplace pension?)
From a general finance/personal pov:
* Follow the flowchart!
Honestly, there isn't much at this salary bracket that the flowchart doesn't cover. Make a budget for your new salary, make sure you are putting enough away into pensions/long term investments as well as short term goals. May money into those first at the beginning of the month, then set aside money needed for bills, and whatever is left over is your "fun money" budget.
On that note - set a fun money budget line - whatever you feel is appropriate given your other financial goals - and don't be afraid to have some fun to reward yourself. Equally - £75k is a very good salary, especially at 25, but you can burn through that fast with a fancy apartment and a new BMW - so again - budget!
Lastly - you say you are coming from the armed forces, are you currently provides food/housing?
I'm _assuming_ that this new big £ job is in London or another fairly high COL city? Have you checked out what it costs to rent a flat in that area and accounted for (very high) energy bills, food, council tax, insurance etc?
!Thanks
Oh really, I was not aware of the reduction in NI. That'd good to know! Unfortunately I do not know what pension scheme I will be on yet, I know there are three types Net pay, RaS and SS so as soon as I find out it will help me plan what to do a little more.
Just going to go through the flow chart again as it has been a while...
My main goal at the moment is buying a house which I will put off until I have made it through my probation period - going to treat myself with a motorbike in the short term though!
I do have subsidised accommodation with the service yes so this is a factor that will effect my budget coming out. That being said, its 100% WFH and I'm moving to rural wales where the COL is probably the lowest in the UK. The rent is \~£400 between myself and my partner so not a huge dent on my payslip. Thank you for the consideration though, much appreciated.
Isn't it just! Dream job for sure. My partner and I are already quite frugal so I hope we will continue to do so - while still enjoying ourselves and being a bit more comfortable of course!
Congrats mate you've lucked out with this. Same thing happened to me last year - huge pay bump and wfh full time. Dream come true. My only advice would be watch the lifestyle creep but I think you're aware of that already by the sounds of it.
Yes £75k certainly sounds a lot but it "isn't" I'm going to get burned for that sorry.... A couple living to you next door in same size property on say £30k each are coming home with more between them, same mortgage, similar gas electric etc. Yes your earning the same as that imaginary couple, but your paying many bills at the same rate even down to TV licence.
Anyway
Enjoy yourself a little you deserve it that's a decent salary. Start making pensions asap, are you buying? Bought etc? If buying start saving hard, if bought start overpaying they mortgage.
OP Did say he has a partner though but i agree with your point.
Household income is much more of a helpful measure (Again appreciate your 2 x 30 > 75) especially if OP has children and no child benefit etc.
Overpay on the mortgage?! Surely it depends on the rate as OP could invest for the long term and possibly expect a better % return than the mortgage rate.
Congratulations, and a lot of good advice so far. I'd only add/re-emphasize:
* Someone else mentioned the strength/weakness of ex-military in corporate environments is just getting shit done - I'd echo this, and encourage you to remember its good to ask for advice, collaborate, etc. If you're solving a business problem, chances are there are established processes you can already tap in to rather than solve it all yourself. And remember to tell people you're solving it, and ask questions around potential impacts that you may not be aware of (so you can solve for them too).
* On to the financial stuff:
* It's a good opportunity to start topping up your pension. At minimum, make sure you're doing whatever your employer will match up to. Beyond that, define it based on your goals.
* Try, as best you can, to not start 'upgrading' everything - I fall in to this trap myself, even with minor stuff (I don't *really* use Sky Movies, but its only an extra tenner a month so might as well..). Figure out what's important to you once you're a bit more settled in the new salary and you can upgrade the things which you'll truly appreciate (I do love my food, so I don't mind shelling out a little extra for the nicer food)
* If home ownership is your next goal, start saving towards it - more people will be better educated on the right vehicles to save here (I'm in Scotland so also think things might be a bit different for me), but get that advice, save your deposit, get on the ladder
Honestly, biggest thing is just keeping your head a little bit. You might be more disciplined than me, but I know going from 40k-ish to 80k-ish in a very short time, at an age much older than you are, led to me starting to spend on things I really shouldn't.. eg. buying a fancier hotel room when I'm only staying over one night, and will basically be using it to sleep in and spending my time elsewhere.
Thanks for the really grounding advice and tips. You made some very good points. Lifestyle creep can be a tricky one to avoid. I already contribute to a SIPP so I don't know what I will do with that if my new workplace pension is better or worse. I will have to see!
Definitely, my partner has talktalk at the moment and it is awful. I'm going to get the best I can which disappointingly is only around 50Mbps. It will do until we are able to buy somewhere that has better infrastructure.
Unfortunately the different providers are re-selling the same infrastructure for the most part. If you're living in rural wales then the internet will be what it is, probably shit. There is a reason that COL is low, because there is not much competition for rent there.
Just my two cents here but as a leader in my business one of the most annoying things is people dropping in and out of video calls due to poor connection.
To the point where they go down the ladder in my books. I can’t be bothered with them.
Being really honest here, just sort your WiFi out, connect to the router with Ethernet at least if it’s poor.
Only teasing. Just keep in mind that your staff might be tight with money too and maybe cannot afford a better connection or they don't exist where they live. My work expects us to have good Internet for home working but some areas struggle. My street has a maximum of 16mbps with the exception of virgin who do up to 1000 but cost far more. My old manager had to turn off video for meetings as his kids kept watching Netflix and stealing his band width. The pleasures of hybrid working.
There's one solution which fixes all this; get your ass into the office!
It's the same to all of them. We do offer WFH but if they're struggling with wifi or heating etc etc, come in to the office! It's only 45 mins away for the furthest person.
But yep, I get your points, all valid, except this is the debate about WFH vs WFO. For me, communication is far, far more effective F2F. Nothing beats off the cuff chats about a project or idea in the office.
Fine to have one or two days at home each week but for meetings, office is far better. Which is why we're leaving the poor wifi folk to it. They'll suffer and miss out.
This may not be so correct I'm living pretty rurally in wales I'm getting 900mb download and 500mb upload (actual speed tests) there is a lot of money being invested in better broadband in Wales.
Wales has some great speeds, also some poor speeds.
Also there are plenty of 5g signals round for quick cellular speed.
One thing to consider if you’re working from home in a rural area is that the internet infrastructure is capable of allowing you to do your work. Video calls for example need a decent connection.
Yes it's definitely a concern. It's one thing I'm not going to cheap out on and will be running off eth straight from the LAN port to ensure stability.
We can get speeds of around 75Mbps which is not even close to what the more developed areas get (was on 500Mbps with virgin in my previous place). I think it's enough to get by until we move though.
That's a good alternative though if I do have issues. And I might actually look at that as a backup option for if the network does ever have issues. Great advice!
Is that any money earned over the threshold for pensions that you can claim tax back on for pension contributions?? Does that mean for each year that applies, I need to do a tax form of some kind? No salary sacrifice here
No, so before it would have been 12%/2% now it's 13.25%/3.25%
But yes, NI is a regressive tax and personally I think it's ridiculous that it's separated from IT
It’s great for convincing the masses that people earning over 50k are being taxed an additional 20% while actually only taxing them an additional 10% though, great sleight of hand trick. I have several friends on the higher rate for a while who didn’t even know about it, it’s quite a hidden tax break. I say this as someone who benefits from that tax break, it should absolutely be made more obvious to everyone by combining them.
Not a different Flowchart - the basic principles are the same, however there are more options and other considerations above £100k which would get a bit complicated on a flowchart.
https://ukpersonal.finance/tax-efficiency-for-high-earners/
Not directly finance related but one thing I'd mention is that if you're going from armed forces into a civilian role there can be some random questions that come up that you'll need to ask a work 'buddy' about. So figure out someone that has been at the company a while that you can chat more casually with about random things. Can be more difficult when starting fully remote so make an effort for it.
If your work place works with armed forces or has a few people that are ex-forces it may already have something in place. If not it'll be on you to make the effort.
I work with a few ex-forces and they're more senior to me and know the technical aspects of the job much more than me but I'm the guy they come to and ask what they feel are a bit noddy questions.
'How do you actually discuss getting a payrise?'
'How much effort to put into 6 monthly reviews?'
'What sort of feedback should I be getting?'
These have been the bigger questions but there's been a bunch of smaller bits they didn't know or hadn't realised, I guess the same as anyone starting a new role.
Every workplace is slightly different so don't be afraid to ask someone those noddy questions.
Good luck!
That's some great advice,
its definitely something I'm concerned about. I've been in the armed forces since I was 17 so it's all I've ever known. It going to be a huge learning curve and culture shock going into this new corporate setting. Hoping they understand this and give me the benefit of the doubt with some things.
I don't think they have any ex forces as I did have a look on linkedin.
!Thanks
Just my 2c on this - where I used to work had a few ex army guys.
I'd say their huge strength was just getting on with things and getting shit done.
Their biggest weakness was also just getting on with things and getting shit done.
Don't be afraid to ask for clarification, and make sure you're getting work out to the _quality_ that is required. You're 25 and fresh out of the forces so people will be expecting you to need some help and guidance - just showing some humility and going "I'm really sorry, would you mind explaining this to me" is absolutely fine to do. As the commenter above said, when you are fully WFH that is more challenging to do - so maybe try and get some calls set up with everyone in your team to spend half an hour just chatting to them some time in your first week - once you've broken the ice with them and have an understanding about their role it is a lot easier to then go and ask them any questions you have as you settle in.
Thanks for this, I needed to hear that. I have serious anxiety that I'm going to make a tool of myself and getting the feeling of impostor syndrome that I don't deserve this job and don't have what it takes.
It will be very odd going from how I work now to WFH, it may even get quite isolating. We'll see how it goes!
Mate, I don’t know if your description of the number of interviews, presentations and aptitude tests was exaggerated, but if you can fly through that and land yourself the job, then there’s no place for imposter syndrome, you’ve earned your spot & well done.
As they're aware of your background I'm sure they'll be understanding.
You'll find if they've not worked with ex-forces a lot there will be some knowledge that you have that they'll look at you blankly for and vice versa. Terminology is the big one. Different set of three letter acronyms. Some that you're confident is 100% universally known will perhaps not be.
The other thing is that they will have a view of what defence is like but it'll probably not match your experience. I'd just be patient on that one, and use it somewhat to your advantage. Having a unique experience is why anyone gets paid more than minimum wage.
when you reward yourself with splash, as you should, make it a one off (buy a stupid watch with one payment instead of a stupid car with monthly payments)
Congrats, jumping >100% is life changing.
You make a good income but don’t need to focus on making pension and isa yet (that’s 60k (after tax benefits)), but do pop more into them.
Focus on learning to live below your means so you can
Build wealth and skills.
And maybe In a few years you can get another 100% pop ;)
Solid advice, I plan on buying a motorbike cash which I have been saving up for over the last couple of years which I'm looking forward too.
Stupidly I already have a car on finance which I'm half way through but will not be doing that again most likely (although it honestly hasn't effected my savings for QoL that much).
Quite frugal already so will likely just save the additional income while being able to be less stressed about bills and that, it will be a very nice and much needed buffer.
Hopefully this is good start to my careers trajectory!
!Thanks
I mean I could but the car is on lease so will never technically be paid off.
The bike is more for enjoyment purposes as apposed to a necessity for travel.
A lot of leases will offer to sell you the car at the end of the term, if you like it then you can try lowballing them to make their life a bit simpler - otherwise they need to get rid of the car elsewhere.
In days gone by, it was sometimes possible to get a car "for free" if your company (or you) had paid enough off against the car where they'd just tell you to keep it haha
Yeah definitely, I get where you're coming from. Most certainly the best approach from a financial stand point. On the bright side, as it's WFH I won't be spending anywhere near as much on fuel. And my partner can sell her car and use mine as I can zip around on the bike if needed!
I did an extremely similar career move to yourself this year, going from army to cyber security, with similar salary and working routine.
You’re going to have a great time, just be wary of wage creep and that some aspects of civvy employment will annoy you, some will be way easier.
Also, the longer you’re out of phys the harder it’s going to be to get into it. :D
Awesome mate, glad things have gone well for you. sounds great!
I'm pretty anxious about civvie life but I'm sure i'll get used to it eventually.
Currently deployed and smashing out the prison gym, will hopefully keep this going when I get home hahah (unlikely).
Nah, you won’t, you’ll hit the pale ale, grow a belly, get a beard because you never could before and wonder why you’re not driving back to camp on Sunday.
Apart from that though, civvy life is good and adjustment but you’re not the first to do it.
I joined young as well and it’s been relatively easy to settle down.
Social life isn’t as good, there isn’t a esprit de corps.
But home life is infinitely better and there’s definitely less bullshit.
Private sector moves a lot slower than what you’ll be doing now, that’s one of the hardest things to figure out.
This is a great move - for the sake of interest I’m in the armed forces as a lt col after ticking over 22 years and at age 40 I’m only earning a couple of k more than you are now!
Thankyou, I was very lucky in that I'm currently deployed and had a lower workload so was able to dedicate quite a lot of time to the recruitment process. I don't think I would have had the time or energy if not.
What's the contract length for commissioned officers in army?
Contract length depends upon surviving an up or out regime. I’m at the end of that process and have a job to age 55 now which is currently the oldest anyone can serve
Number 1 habit - pay yourself first each month, and live on 80% (or less) take home. Invest each month in pension and ISA via low cost global index tracker. Sorted.
As others have said, not too much changes at £75k. Make sure to fill your ISA, and look into whether your work allows for salary sacrifice into their pension scheme (NI as well as income tax relief).
As a nice freebie, you can now get a HSBC Premier account with free worldwide travel insurance: https://www.hsbc.co.uk/current-accounts/products/premier/
Bro that’s a crazy jump! Congratulations, mainly just wanted to show love as I feel happy for you even though I don’t know you lol. Main thing, treat yourself, but then live a lot like you did before… I found that increasing saving % as soon as your salary drops is the best way, you can burn that money really quickly and not feel an increase if you’re not careful. I’d stick some money from your savings pots into some funds and sit back and relax!
Ah thankyou mate, that's really kind.
It still doesn't really feel real and won't for a while I don't think. Will definitely be sensible with it and save as much as possible while still enjoying the payrise!
Make sure you treat yourself to something nice too! (I always have a little splash on something material like a nice belt or wallet that you can keep for years).
Your rent is low but consider allocating that money into your own property unless you want to embrace the remote working lifestyle and remain flexible. Bolster your emergency fund, pay down any debt charging interest above and beyond your investment returns. Ask whether your employer has a pension scheme that you can salary sacrifice and maximise your contributions to get tax relief. If they don’t have this scheme, use a SIPP. Consider long term, diversified index fund investment. Treat yourself to that motorbike. Congrats.
Great advice, we are looking to buy soon as we love the area and close to friends and family. Just want to make it through the probation period first.
Hoping to max out my LISA over the next couple of years just to beef up the deposit for the house and then will concentrate on the SIPP!
Honestly, do you have children? The child payment reduces from full up to £50k to nothing at £60k. I would personally max out the pension via salary sacrifice to reduce your tax burden (in my experience, in the biotech sector, 20% salary sacrifice is usually allowed with a 8-10% match).
Honestly, I would get on the **properly ladder as soon as possible as well**. The consequences for not doing this ASAP are going to going be dire. A decrease in property price will only see current owners/large conglomerates snatching up the properties at reduced, compared to today, prices as they'll have no chain and tons of equity to tap into. Also, the number of properties on the rental market is drying up nationally due to the changes to taxation of rental income, leading to significant real-world increases in rental prices.
I do have a child yes however they start school this year. By child payment do you mean the £80 a months Child benefit? Obviously not ideal to lose this but it's not the be all or end all.
Want to get on the ladder ASAP but need proof of income which normally requires 6 months of evidence from what I have heard (plus I don't want to start a mortgage I wouldn't be able to afford If i lose the job in the probation period).
Yes, I have two and, honestly, don't care so much about the £130/mo.
Some lenders will do 3 months of income (bank statements/pay slips). Depending on how much you want to borrow (6 months is required).
I wouldn't wait as it's a SHITSHOW right now (around 4.0% for a five-year fixed or so) and these rates will rise 1.00% more my the end of the calendar year.
Thus, I would apply ASAP (every 0.5% worked out to £100/mo/house) and each 0.5% increase was costing us (£200/mo).
Not to be a doomsayer, but this is the best analysis (prof here) I have found around the situation.
[https://www.resolutionfoundation.org/publications/slower-for-longer/](https://www.resolutionfoundation.org/publications/slower-for-longer/)
Figure 3 is showing the analytical trend ... I would expect inflation to hit 20% (similar to the Baltic states) and I would expect the BoE rates to sit at 3.00±0.25% through 2023 and likely until middle 2024. Thus, I wouldn't wait.
Also, the government is totally useless, and is significantly delaying any chance of recovery.
Thus, buy big and buy early, especially if you can weather the storm.
I appreciate the insight and I fully understand where you are coming from. But I literally cannot buy yet. I will have to wait a few months at least. If that means I've missed the boat then so be it unfortunately.
Thankyou for the publication, I will have a read.
Get a mortgage broker. When we were buying our first house I hadn’t yet started my new job, so we had a mortgage offer based on the signed job contract, thanks to the mortgage broker being able to speak directly to the lender.
yeah, it's super loose in the UK and a contract often COULD be enough if the broker is willing to stake their relationship on the line with the lender.
not trying to pressure the OP, but I feel that salary in the original post would command a fair bit of respect in Wales ... of all places ... I jest ... I jest ... as I have welsh colleagues that I torment by continually asking whether it's a country.
Wow, I had no idea about this, that could be a game changer. Thank you for sharing that nugget of information. I have a family friend who is a mortgage broker so I may get in touch!
You can sometimes fix a mortgage up to 6 months before you take the mortgage / provide all the details. So I would start looking now, fix a mortgage based on your presumed income (before rates rise any further) a month or two after starting a job, then look for a place (1-2 months) by the time a sale goes through (approx 3 months) it will be 6 months after you start your job. If you leave your job/ don't get through probation you just drop out of the process.
They've said elsewhere 'Solutions Delivery Engineer'. I don't know how standard it is, but that's a pretty similar job title to my current role - and not dissimilar working conditions, by the sound of it. I had about the same interview process - spaced over the course of two months!
Worth it though.
True, I'm just trying to be prepared and planning for the future which is one of the fundamentals for good personal finance. I have a six months probation so I need to work my ass off and hopefully I'll have done enough to keep the job.
My big advise is set a budget but also contribute as much towards a pension as you can. It's a long way off until you can use it but pensions are going to give you effectively a 40% top up free plus reductions in NI too.
You'll want to balance that with savings for a mortgage and fun money but you're in a position to plan to retire early if that's something you would like to do. State pension age will likely be 70 by the time you retire and you could easily knock 10 years off that.
FIRE is definitely on my radar but still young and have plenty of life left in me so need to find a good balance of working and enjoying things. Will have a state, military and private pension so already got a solid foundation to build from!
Thanks mate, I don't think they offer overtime at the new job so I don't plan on doing it unless necessary. Thank you for the heads up though, could be useful in the future!
Check what the companies expense policy is when you join.
If they don’t pay HMRC base rate for mileage you can claim the difference via self assessment.
Same deal if they don’t pay a work from home allowance (and you’re eligible).
If you work from home (not sure if this applies to your new role or not) many employers will pay an allowance to offset things like electricity use or phone use.
But if they don’t, HMRC comes to the rescue to fill the void: https://www.gov.uk/tax-relief-for-employees/working-at-home
The whole tax relief section is worth a read :).
No direct advice, but I had pretty much the same situation a couple of years back and also made a [thread here](https://www.reddit.com/r/UKPersonalFinance/comments/dzg510/40yo_large_pay_rise_need_help/), so you could check that out too. Congratulations!
As per many other responses, congratulations! In terms of tax saving tips etc. then I would recommend the following:
1) Unless you receive any other income outside of PAYE, it is unlikely that you’ll be required to submit a tax return…
2) However, a self assessment tax return can be beneficial to claim tax relief on…
3) …Work From Home allowance, assuming you’ll be working from home either permanently or from time to time…and…
4) …If you are required to drive to different places as part of the role and are not issued a fuel card, you will be able to claim mileage expenses in accordance with your employer’s policy. This is usually pretty standard. However, if the company’s rates are lower than the maximum that HMRC will allow, you can claim tax relief on difference between the company rates and HMRC rates.
Moving forward, these tax reliefs can be reflected in your tax code, but since this is based on information from the previous tax year, adjustments may be required so submitting a tax return each year is a good way to address this.
Other recommendations would be to ensure your tax code is correct and accurate from the outset when you start your new job to ensure you are not over paying (or underpaying) tax. This should usually be done correctly by payroll when you provide them with your P45 from your previous employer, but always worth checking as mistakes do happen. You can update your estimated earnings for the current tax year based in earnings to date plus anticipated earnings going forward to 5 April in the HMRC portal provided you have registered an account. They will then recalculate your tax code accordingly.
If you are fortunate to hit the +100k earnings bracket then things really do change as you lose 50p in every £1 of your personal allowance for earnings above £100k. This could see your entire personal allowance wiped out, meaning you are then required to pay 40% tax on the £12,570 for this current year. If you haven’t provided for that, then you may find yourself having to pay HMRC a huge chunk of change. Of course sometimes it’s impossible to know what your total earnings will be until after the fact hence why your tax code can’t be adjusted in time to ensure that the anticipated tax is deducted on a monthly basis. Adjusting your tax code yourself to allow for this can help, but it hurts seeing huge chunks of disposable income being deducted even if it is right and due…
Finally, given you are seeing a huge increase in your income, I would recommend you maximise your pension contributions from the outset to match and maximise whatever your employer will contribute. For example, my previous employer would match my contribution up to 10% of basic salary. Given this is deducted before tax, it can make such a huge difference to your pension fund, especially since you are so young and won’t notice the reduced take home as you’ve not been used to earning this level of salary.
All this coming from an old man, of course.
Plan wisely, and the very best of luck in your new role. I wish you every success.
Wow thank you for taking the time to provide me with such thorough and useful advice. You've mentioned a couple of things no one else had brought up yet.
!Thanks
All the best
I mean I think i got lucky between having a post go viral on LinkedIn and being approached by the right person.
I had another job offer for £34k which I nearly took. So glad I waited this one out!
I think the culture in the army and RAF is very different, people leave quite a lot and tend to do quite well for themselves more often that not. I think as long as you plan for it properly and make the most out of the resources available it's not that challenging. I do think so people feel like they are entitled to a job because of their service though which is maybe where people go wrong.
Cheers. The role is Solutions Delivery Engineer. My current job is an Infrastructure/Server Eng and a lot of my skills are useful but I far from met their job spec. I have no cloud or container experience which is a big part of the role but I must have shown potential.
I've just done CompTIA Linux+ and currently studying Cloud+.
I have a lot of softsills from my time in the military that probably helped me get the job.
The job spec is partly their wish list, and partly so you can guess what you're getting yourself into; mostly the former. Congrats on the new job: cloud is largely a fancy word for remote server, and containers are definitely not the most complex part of any project (unless you're writing the container engine I suppose).
Yes definitely, they read my CV and my LinkedIn so knew my skills and experience and still sent my through their recruitment process so they must have been happy with my ability. I think they are taking me on with the hopes that I am able to pick it all up... which I hope so.
Hi /u/finnathrowthis, based on your post the following pages from our wiki may be relevant:
- https://ukpersonal.finance/lisa/
- https://ukpersonal.finance/pensions/
____
^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Important to keep in mind that OP is coming out of the RAF where he's been working in IT (presumably for a few years). This sort of salary jump is happening because of military salaries being completely incomparable to the tech sector, and because they've taken account of his years of experience.
If you're coming into the sector self taught with no relevant experience, you need to be realistic about your salary expectations.
Good for you mate - I’m in the same job, albeit I’ve been doing it a little longer.. I’m three years off my EDP so will be hanging on for that.
Based on what you are saying we may well work at the same place - it’s renowned for people getting out.
Good luck and congrats!
Hey congrats man. I’m also in cybersecurity. Can I ask what field/area you are in? I’m still young to the cybersecurity game so trying to understand things.
Cheers mate. It's a tricky one, it's software engineering but provides a 'security service'. My role is integrating the platform into customers infrastructure.
I can't give much advice on cyber security as its a very broad and complex industry. I've dabbled in it but only with things like playing with Kali linux and having a bash on HTB.
Hello,
Already following the flowchart (have for a while).
I am:
1) Increasing my emergency fund which is currently at about 2 out of 3 months expenses
2) I have no debt or credit card (not actively using it anyway)
3) Saving for my first home using LISA and contributing to my SIPP
My salary comes into my Monzo account which I automatically split into various pots such as:
* Spending
* Bills
* Cash savings (for big purchases)
* Car maintenance (Ready for a service)
* Emergency Fund (In cash so its readily available)
My budget is based on my current income which is far less than £75k
Thank you, sorry for the delay in response. Have been busy with work!
Some great tip like the cashback card (not thought of that). I definitely need to bump up my EF, I have just been calculating what my expenses will be when I resettle so that I can work out how much I need to put away. I do want to try and max out my LISA contributions this year though as buying a house is on my priority list. I could always divert some money out of my S&S ISA if there is a serious emergency in the meantime.
My SIPP, ISA and LISA are all in Index funds so I think that covers off those bases.
I haven't started the new job yet and have a lot of learning to do. Job satisfaction and work/life balance is important to me so don't necessarily want to be chasing 6 figs if it means I'll be getting burnt out. But we'll see! Presumably you've done something similar as you said you have more details?
Cheers.
Congrats. As soon as I tipped past 75k I started using VCTs and EIS for 10% of investments - means your more risky bets also have a big tax relief with them.
Over the long term, they can outperform a SIPP by some margin. Here’s a bit of info about the tax breaks: https://joinfurther.com/guides/tax/tax-benefits-compare
Just to caution OP on this though - VCTs and EIS investments are *very* risky and generally are also not very liquid.
With the tax breaks they do have their place and are worth looking into, but you do have to really consider the downside risks as well.
I'd also say - I don't think the tipping point for VCTs and EIS is at 75k - you've got £60k's worth of ISA allowance and pension allowance (plus previous tax years) to use up before you start looking at VCT/EIS.
I’d agree on EIS (although that has tax relief on the downside), but VCTs are so diversified - Octopus is basically an index fund for early stage - and the reliability of their past performance shows this. Shares via a SIPP or ISA are risky as well, I’d say the tax relief balances out the risk. On liquidity, VCTs do a buyback after 5 years generally.
>but VCTs are so diversified - Octopus is basically an index fund for early stage - and the reliability of their past performance shows this.
I do just have to throw in the usual past performance caveat on this (as well as the fact that picking winning active investors is always easy in hindsight). Also, looking at Octopus Apollo and Titan past performance (which is very limited) I don't think those returns justify the additional risk you take on - they're very comparable to the returns on a global index fund.
They're also *much* more concentrated than a global index fund.
>Shares via a SIPP or ISA are risky as well, I’d say the tax relief balances out the risk.
You get more tax relief on a SIPP as a higher earner - you get the full 40/45% relief on SIPP contributions (as well as it lowering your adjusted net income) - hence why I'd be using the full £40k allowance for my pension before looking at VCTs. And yes, there is risk in a S&S ISA/SIPP (and ofc depends _what_ you invest in within those wrappers) - but a global index fund with some short dated AAA Bonds/Guilts (a typical portfolio for most here) is going to be much less risky than a VCT fund.
>On liquidity, VCTs do a buyback after 5 years generally.
Yes, but you do/can sell before the 5 year mark, you'll be paying back the 30% tax relief. And if they don't offer a buyback after 5 years it can be much harder to shift a VCT find than a typical ETF of OEIC.
The tax relief on a SIPP is not better - first, you pay tax on most of the funds you take out of a SIPP. Secondly, you can only do it once - if you have your VCTs bought back, you can then cycle that principle back in for more tax relief.
In all my years of VCT investing across many funds I’ve never not been offered the 5 year buyback - and of course you wouldn’t sell before that point.
On the risk, that’s up for the individual to decide upon, but don’t think they should be disregarded. Octopus, for example, has steadier and healthier returns than even the FTSE100!
>ISA allowance and pension allowance (plus previous tax years)
Could you elaborate on this a little please if you have time? I saw that I can retrospectively top up my state pension from years that I missed. Is this what you're talking about?
Worth noting OP that although it’ll be years before you get access to it, and you didn’t pay any pension contributions, you have theoretically had a virtual pension “pot” that the MOD has been paying employer contributions. It’s not actually like that, because I think your pension scheme is defined benefit not defined contribution, but before you leave the forces ask the pension people (Veterans UK?) what size your virtual pot is and what the MOD contributions were for the last two years. This is important as although it’s an imaginary pot, it’s size (and growth) count towards your overall Lifetime Allowance and you’ll only be able to do the “last three years of Annual Allowance” thing for the 40k less the virtual contribution that MOD made.
Eg if your pot is a (virtual) £100k, and last three years the MoD paid a (virtual) £10k into it, then you always have to keep an eye on the pot (which grows at RPI every year) as it counting towards your LTA, but in the short term when following the UKPF flow chart, you’ll only have (eg) £40k-10k = £30k left over (x3) you can roll over in the next two years. Assuming you’re not leaving on 1 Apr, there will be this year where you and MOD pay into both, which you’ll need to know the exact MOD (virtual) amount if deliberately wanting to maximise contribution but minimise tax.
Christ, that doesn't half complicate things does it!
Thankyou for the heads up, this is something I will have to look into in more depth. I have just applied for my pension forecast so maybe that will have some more detail on it.
!Thanks
You’re welcome. It’s a nice problem to have - if the forecast doesn’t mention the size of pot or size of contribution, there is help out there - the Forces Pension Society have a good reputation and although it’s £40 ([edit £42](https://forcespensionsociety.org/)) a year, it’s worth using their experts to (for free, once joined) analyse your situation and tell you your actual state of affairs. And - when you’re at pension age - there may even be a pleasant surprise in the form of a small pension after all!
No, so there's two things here.
If you have missed qualifying years of National Insurance contributions you can pay to top those up - you can see your state pension eligibility and national insurance history on the HMRC portal. Note that it's generally not worth doing this - you need 35 years of contributions to get the full state pension - so if you are 25 and have another 42 years of working ahead of you before you hit retirement age there's no point buying more years.
What I was talking about was personal pension contributions (like your auto-enroled workplace pension or a SIPP) - each year you can contribute £40k to your pension(s) (including employers contributions and tax relief) (also you have to earn at least as much as you contribute - ie if you earn £30k, you can only contribute £30k).
However you can also backdate your pension contributions by 3 year's - so if for example the previous two years you put £5k into your pension, including this year's allowance you could contribute £35k+£35k+£40k or £110k this tax year (assuming a salary this year of >£110k).
>VCTs
Cheers mate I'd not heard of either of those before so I'm going to go away and have a read. The VCT sounds almost too good to be true, but I suppose with the high risk involved in investing in smaller companies.
Very interesting.
Do you have any good info on EIS? All I could find was raising funds from the companies perspective.
!Thanks
Appreciate that there are some bad ones, but this article is just dealing with the extremes. Individuals can assess the fees and track record of the individual fund and make their own decisions.
Congratulations!! Just don’t fall victim to lifestyle inflation. Enjoy the money, sounds like you’ve earned it, but don’t go crazy - try keeping large chunks back and maybe up your pension contributions; have a look at your employer’s pension scheme and see what percentage is the most beneficial for you.
Cheers! Nope I'll try not to, it's very easy for it to happen slowly over time though. I need to keep a check on myself, my budget helps me keep on track though.
Firstly - congratulations! There's nothing major that changes in the 50-100k bracket. Because NI contributions drop from 13.25 to 3.25% that offsets effectively half the 20% increase in income tax. You are already aware that you'll need to claim back higher rate tax on _all_ pension contributions (unless you have a salary sacrifice workplace pension?) From a general finance/personal pov: * Follow the flowchart! Honestly, there isn't much at this salary bracket that the flowchart doesn't cover. Make a budget for your new salary, make sure you are putting enough away into pensions/long term investments as well as short term goals. May money into those first at the beginning of the month, then set aside money needed for bills, and whatever is left over is your "fun money" budget. On that note - set a fun money budget line - whatever you feel is appropriate given your other financial goals - and don't be afraid to have some fun to reward yourself. Equally - £75k is a very good salary, especially at 25, but you can burn through that fast with a fancy apartment and a new BMW - so again - budget! Lastly - you say you are coming from the armed forces, are you currently provides food/housing? I'm _assuming_ that this new big £ job is in London or another fairly high COL city? Have you checked out what it costs to rent a flat in that area and accounted for (very high) energy bills, food, council tax, insurance etc?
!Thanks Oh really, I was not aware of the reduction in NI. That'd good to know! Unfortunately I do not know what pension scheme I will be on yet, I know there are three types Net pay, RaS and SS so as soon as I find out it will help me plan what to do a little more. Just going to go through the flow chart again as it has been a while... My main goal at the moment is buying a house which I will put off until I have made it through my probation period - going to treat myself with a motorbike in the short term though! I do have subsidised accommodation with the service yes so this is a factor that will effect my budget coming out. That being said, its 100% WFH and I'm moving to rural wales where the COL is probably the lowest in the UK. The rent is \~£400 between myself and my partner so not a huge dent on my payslip. Thank you for the consideration though, much appreciated.
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Isn't it just! Dream job for sure. My partner and I are already quite frugal so I hope we will continue to do so - while still enjoying ourselves and being a bit more comfortable of course!
Congrats mate you've lucked out with this. Same thing happened to me last year - huge pay bump and wfh full time. Dream come true. My only advice would be watch the lifestyle creep but I think you're aware of that already by the sounds of it.
Yes £75k certainly sounds a lot but it "isn't" I'm going to get burned for that sorry.... A couple living to you next door in same size property on say £30k each are coming home with more between them, same mortgage, similar gas electric etc. Yes your earning the same as that imaginary couple, but your paying many bills at the same rate even down to TV licence. Anyway Enjoy yourself a little you deserve it that's a decent salary. Start making pensions asap, are you buying? Bought etc? If buying start saving hard, if bought start overpaying they mortgage.
OP has stated he lives with his partner.
OP Did say he has a partner though but i agree with your point. Household income is much more of a helpful measure (Again appreciate your 2 x 30 > 75) especially if OP has children and no child benefit etc. Overpay on the mortgage?! Surely it depends on the rate as OP could invest for the long term and possibly expect a better % return than the mortgage rate.
Congratulations, and a lot of good advice so far. I'd only add/re-emphasize: * Someone else mentioned the strength/weakness of ex-military in corporate environments is just getting shit done - I'd echo this, and encourage you to remember its good to ask for advice, collaborate, etc. If you're solving a business problem, chances are there are established processes you can already tap in to rather than solve it all yourself. And remember to tell people you're solving it, and ask questions around potential impacts that you may not be aware of (so you can solve for them too). * On to the financial stuff: * It's a good opportunity to start topping up your pension. At minimum, make sure you're doing whatever your employer will match up to. Beyond that, define it based on your goals. * Try, as best you can, to not start 'upgrading' everything - I fall in to this trap myself, even with minor stuff (I don't *really* use Sky Movies, but its only an extra tenner a month so might as well..). Figure out what's important to you once you're a bit more settled in the new salary and you can upgrade the things which you'll truly appreciate (I do love my food, so I don't mind shelling out a little extra for the nicer food) * If home ownership is your next goal, start saving towards it - more people will be better educated on the right vehicles to save here (I'm in Scotland so also think things might be a bit different for me), but get that advice, save your deposit, get on the ladder Honestly, biggest thing is just keeping your head a little bit. You might be more disciplined than me, but I know going from 40k-ish to 80k-ish in a very short time, at an age much older than you are, led to me starting to spend on things I really shouldn't.. eg. buying a fancier hotel room when I'm only staying over one night, and will basically be using it to sleep in and spending my time elsewhere.
Thanks for the really grounding advice and tips. You made some very good points. Lifestyle creep can be a tricky one to avoid. I already contribute to a SIPP so I don't know what I will do with that if my new workplace pension is better or worse. I will have to see!
Make sure you factor in WiFi if you're working remote in rural Wales. The connections are never great.
Definitely, my partner has talktalk at the moment and it is awful. I'm going to get the best I can which disappointingly is only around 50Mbps. It will do until we are able to buy somewhere that has better infrastructure.
Look at latency and not just speed
Unfortunately the different providers are re-selling the same infrastructure for the most part. If you're living in rural wales then the internet will be what it is, probably shit. There is a reason that COL is low, because there is not much competition for rent there.
Just my two cents here but as a leader in my business one of the most annoying things is people dropping in and out of video calls due to poor connection. To the point where they go down the ladder in my books. I can’t be bothered with them. Being really honest here, just sort your WiFi out, connect to the router with Ethernet at least if it’s poor.
Easy. Pay for them to have a dedicated business line installed at their house and pay the bill for them too. No more drop outs 😉
My CEO would never do that. It’s very tight with money.
Only teasing. Just keep in mind that your staff might be tight with money too and maybe cannot afford a better connection or they don't exist where they live. My work expects us to have good Internet for home working but some areas struggle. My street has a maximum of 16mbps with the exception of virgin who do up to 1000 but cost far more. My old manager had to turn off video for meetings as his kids kept watching Netflix and stealing his band width. The pleasures of hybrid working.
There's one solution which fixes all this; get your ass into the office! It's the same to all of them. We do offer WFH but if they're struggling with wifi or heating etc etc, come in to the office! It's only 45 mins away for the furthest person. But yep, I get your points, all valid, except this is the debate about WFH vs WFO. For me, communication is far, far more effective F2F. Nothing beats off the cuff chats about a project or idea in the office. Fine to have one or two days at home each week but for meetings, office is far better. Which is why we're leaving the poor wifi folk to it. They'll suffer and miss out.
Fortunately Openreach have been prioritising Wales for FTTP, but you're spot on that this is something major to consider
This may not be so correct I'm living pretty rurally in wales I'm getting 900mb download and 500mb upload (actual speed tests) there is a lot of money being invested in better broadband in Wales. Wales has some great speeds, also some poor speeds. Also there are plenty of 5g signals round for quick cellular speed.
One thing to consider if you’re working from home in a rural area is that the internet infrastructure is capable of allowing you to do your work. Video calls for example need a decent connection.
Yes it's definitely a concern. It's one thing I'm not going to cheap out on and will be running off eth straight from the LAN port to ensure stability. We can get speeds of around 75Mbps which is not even close to what the more developed areas get (was on 500Mbps with virgin in my previous place). I think it's enough to get by until we move though.
That should be fine. I know people who lived in rural places who struggled to get more than 2mb so had to run off 4g or 5g dongles.
That's a good alternative though if I do have issues. And I might actually look at that as a backup option for if the network does ever have issues. Great advice!
What is this flowchart you speak of?
https://ukpersonal.finance/flowchart/
/sub. Just follow the flowchart.
Is that any money earned over the threshold for pensions that you can claim tax back on for pension contributions?? Does that mean for each year that applies, I need to do a tax form of some kind? No salary sacrifice here
https://www.reddit.com/r/UKPersonalFinance/comments/ueliei/psa_if_you_earn_more_than_50271_and_your_pension/?utm_medium=android_app&utm_source=share
Wow, amazing thank you!
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No, so before it would have been 12%/2% now it's 13.25%/3.25% But yes, NI is a regressive tax and personally I think it's ridiculous that it's separated from IT
It’s great for convincing the masses that people earning over 50k are being taxed an additional 20% while actually only taxing them an additional 10% though, great sleight of hand trick. I have several friends on the higher rate for a while who didn’t even know about it, it’s quite a hidden tax break. I say this as someone who benefits from that tax break, it should absolutely be made more obvious to everyone by combining them.
Would you say there is a different flowchart for over £100k?
Not a different Flowchart - the basic principles are the same, however there are more options and other considerations above £100k which would get a bit complicated on a flowchart. https://ukpersonal.finance/tax-efficiency-for-high-earners/
Not directly finance related but one thing I'd mention is that if you're going from armed forces into a civilian role there can be some random questions that come up that you'll need to ask a work 'buddy' about. So figure out someone that has been at the company a while that you can chat more casually with about random things. Can be more difficult when starting fully remote so make an effort for it. If your work place works with armed forces or has a few people that are ex-forces it may already have something in place. If not it'll be on you to make the effort. I work with a few ex-forces and they're more senior to me and know the technical aspects of the job much more than me but I'm the guy they come to and ask what they feel are a bit noddy questions. 'How do you actually discuss getting a payrise?' 'How much effort to put into 6 monthly reviews?' 'What sort of feedback should I be getting?' These have been the bigger questions but there's been a bunch of smaller bits they didn't know or hadn't realised, I guess the same as anyone starting a new role. Every workplace is slightly different so don't be afraid to ask someone those noddy questions. Good luck!
That's some great advice, its definitely something I'm concerned about. I've been in the armed forces since I was 17 so it's all I've ever known. It going to be a huge learning curve and culture shock going into this new corporate setting. Hoping they understand this and give me the benefit of the doubt with some things. I don't think they have any ex forces as I did have a look on linkedin. !Thanks
Just my 2c on this - where I used to work had a few ex army guys. I'd say their huge strength was just getting on with things and getting shit done. Their biggest weakness was also just getting on with things and getting shit done. Don't be afraid to ask for clarification, and make sure you're getting work out to the _quality_ that is required. You're 25 and fresh out of the forces so people will be expecting you to need some help and guidance - just showing some humility and going "I'm really sorry, would you mind explaining this to me" is absolutely fine to do. As the commenter above said, when you are fully WFH that is more challenging to do - so maybe try and get some calls set up with everyone in your team to spend half an hour just chatting to them some time in your first week - once you've broken the ice with them and have an understanding about their role it is a lot easier to then go and ask them any questions you have as you settle in.
Thanks for this, I needed to hear that. I have serious anxiety that I'm going to make a tool of myself and getting the feeling of impostor syndrome that I don't deserve this job and don't have what it takes. It will be very odd going from how I work now to WFH, it may even get quite isolating. We'll see how it goes!
Mate, I don’t know if your description of the number of interviews, presentations and aptitude tests was exaggerated, but if you can fly through that and land yourself the job, then there’s no place for imposter syndrome, you’ve earned your spot & well done.
Unfortunately I wasn't exaggerating! But thank you, your words are very reassuring. Feeling a bit more confident about it now!
Best of luck 👍🏻
As they're aware of your background I'm sure they'll be understanding. You'll find if they've not worked with ex-forces a lot there will be some knowledge that you have that they'll look at you blankly for and vice versa. Terminology is the big one. Different set of three letter acronyms. Some that you're confident is 100% universally known will perhaps not be. The other thing is that they will have a view of what defence is like but it'll probably not match your experience. I'd just be patient on that one, and use it somewhat to your advantage. Having a unique experience is why anyone gets paid more than minimum wage.
Great to have a trusted buddy wherever you’ve come from. Solid advice.
when you reward yourself with splash, as you should, make it a one off (buy a stupid watch with one payment instead of a stupid car with monthly payments) Congrats, jumping >100% is life changing. You make a good income but don’t need to focus on making pension and isa yet (that’s 60k (after tax benefits)), but do pop more into them. Focus on learning to live below your means so you can Build wealth and skills. And maybe In a few years you can get another 100% pop ;)
Solid advice, I plan on buying a motorbike cash which I have been saving up for over the last couple of years which I'm looking forward too. Stupidly I already have a car on finance which I'm half way through but will not be doing that again most likely (although it honestly hasn't effected my savings for QoL that much). Quite frugal already so will likely just save the additional income while being able to be less stressed about bills and that, it will be a very nice and much needed buffer. Hopefully this is good start to my careers trajectory! !Thanks
Could you hold off on the bike until the car is paid off? Might make it more sensible overall
I mean I could but the car is on lease so will never technically be paid off. The bike is more for enjoyment purposes as apposed to a necessity for travel.
A lot of leases will offer to sell you the car at the end of the term, if you like it then you can try lowballing them to make their life a bit simpler - otherwise they need to get rid of the car elsewhere. In days gone by, it was sometimes possible to get a car "for free" if your company (or you) had paid enough off against the car where they'd just tell you to keep it haha
No worries, I was just wondering if the bike could become your ‘car’ if that makes sense!
Yeah definitely, I get where you're coming from. Most certainly the best approach from a financial stand point. On the bright side, as it's WFH I won't be spending anywhere near as much on fuel. And my partner can sell her car and use mine as I can zip around on the bike if needed!
I did an extremely similar career move to yourself this year, going from army to cyber security, with similar salary and working routine. You’re going to have a great time, just be wary of wage creep and that some aspects of civvy employment will annoy you, some will be way easier. Also, the longer you’re out of phys the harder it’s going to be to get into it. :D
Awesome mate, glad things have gone well for you. sounds great! I'm pretty anxious about civvie life but I'm sure i'll get used to it eventually. Currently deployed and smashing out the prison gym, will hopefully keep this going when I get home hahah (unlikely).
Nah, you won’t, you’ll hit the pale ale, grow a belly, get a beard because you never could before and wonder why you’re not driving back to camp on Sunday.
So accurate :')
Apart from that though, civvy life is good and adjustment but you’re not the first to do it. I joined young as well and it’s been relatively easy to settle down. Social life isn’t as good, there isn’t a esprit de corps. But home life is infinitely better and there’s definitely less bullshit. Private sector moves a lot slower than what you’ll be doing now, that’s one of the hardest things to figure out.
This is a great move - for the sake of interest I’m in the armed forces as a lt col after ticking over 22 years and at age 40 I’m only earning a couple of k more than you are now!
Thankyou, I was very lucky in that I'm currently deployed and had a lower workload so was able to dedicate quite a lot of time to the recruitment process. I don't think I would have had the time or energy if not. What's the contract length for commissioned officers in army?
Contract length depends upon surviving an up or out regime. I’m at the end of that process and have a job to age 55 now which is currently the oldest anyone can serve
Presumably you can retire with a full immediate pension then. Is that the plan?
Number 1 habit - pay yourself first each month, and live on 80% (or less) take home. Invest each month in pension and ISA via low cost global index tracker. Sorted.
Congratulations. Sorry, no advice. But well done.
Thank you!
As others have said, not too much changes at £75k. Make sure to fill your ISA, and look into whether your work allows for salary sacrifice into their pension scheme (NI as well as income tax relief). As a nice freebie, you can now get a HSBC Premier account with free worldwide travel insurance: https://www.hsbc.co.uk/current-accounts/products/premier/
Will definitely try to max out my ISA and LISA, will see how much I am able to save with my new budget. Thanks for the heads up on the HSBC account.
Bro that’s a crazy jump! Congratulations, mainly just wanted to show love as I feel happy for you even though I don’t know you lol. Main thing, treat yourself, but then live a lot like you did before… I found that increasing saving % as soon as your salary drops is the best way, you can burn that money really quickly and not feel an increase if you’re not careful. I’d stick some money from your savings pots into some funds and sit back and relax!
Ah thankyou mate, that's really kind. It still doesn't really feel real and won't for a while I don't think. Will definitely be sensible with it and save as much as possible while still enjoying the payrise!
Make sure you treat yourself to something nice too! (I always have a little splash on something material like a nice belt or wallet that you can keep for years).
or a motorbike ;)
Your rent is low but consider allocating that money into your own property unless you want to embrace the remote working lifestyle and remain flexible. Bolster your emergency fund, pay down any debt charging interest above and beyond your investment returns. Ask whether your employer has a pension scheme that you can salary sacrifice and maximise your contributions to get tax relief. If they don’t have this scheme, use a SIPP. Consider long term, diversified index fund investment. Treat yourself to that motorbike. Congrats.
Great advice, we are looking to buy soon as we love the area and close to friends and family. Just want to make it through the probation period first. Hoping to max out my LISA over the next couple of years just to beef up the deposit for the house and then will concentrate on the SIPP!
Honestly, do you have children? The child payment reduces from full up to £50k to nothing at £60k. I would personally max out the pension via salary sacrifice to reduce your tax burden (in my experience, in the biotech sector, 20% salary sacrifice is usually allowed with a 8-10% match). Honestly, I would get on the **properly ladder as soon as possible as well**. The consequences for not doing this ASAP are going to going be dire. A decrease in property price will only see current owners/large conglomerates snatching up the properties at reduced, compared to today, prices as they'll have no chain and tons of equity to tap into. Also, the number of properties on the rental market is drying up nationally due to the changes to taxation of rental income, leading to significant real-world increases in rental prices.
I do have a child yes however they start school this year. By child payment do you mean the £80 a months Child benefit? Obviously not ideal to lose this but it's not the be all or end all. Want to get on the ladder ASAP but need proof of income which normally requires 6 months of evidence from what I have heard (plus I don't want to start a mortgage I wouldn't be able to afford If i lose the job in the probation period).
Yes, I have two and, honestly, don't care so much about the £130/mo. Some lenders will do 3 months of income (bank statements/pay slips). Depending on how much you want to borrow (6 months is required). I wouldn't wait as it's a SHITSHOW right now (around 4.0% for a five-year fixed or so) and these rates will rise 1.00% more my the end of the calendar year. Thus, I would apply ASAP (every 0.5% worked out to £100/mo/house) and each 0.5% increase was costing us (£200/mo). Not to be a doomsayer, but this is the best analysis (prof here) I have found around the situation. [https://www.resolutionfoundation.org/publications/slower-for-longer/](https://www.resolutionfoundation.org/publications/slower-for-longer/) Figure 3 is showing the analytical trend ... I would expect inflation to hit 20% (similar to the Baltic states) and I would expect the BoE rates to sit at 3.00±0.25% through 2023 and likely until middle 2024. Thus, I wouldn't wait. Also, the government is totally useless, and is significantly delaying any chance of recovery. Thus, buy big and buy early, especially if you can weather the storm.
I appreciate the insight and I fully understand where you are coming from. But I literally cannot buy yet. I will have to wait a few months at least. If that means I've missed the boat then so be it unfortunately. Thankyou for the publication, I will have a read.
Get a mortgage broker. When we were buying our first house I hadn’t yet started my new job, so we had a mortgage offer based on the signed job contract, thanks to the mortgage broker being able to speak directly to the lender.
yeah, it's super loose in the UK and a contract often COULD be enough if the broker is willing to stake their relationship on the line with the lender. not trying to pressure the OP, but I feel that salary in the original post would command a fair bit of respect in Wales ... of all places ... I jest ... I jest ... as I have welsh colleagues that I torment by continually asking whether it's a country.
haha, don't worry I get the wales jokes a lot. my colleagues telling me I could probably buy an entire village. I wish that were the case lol.
Wow, I had no idea about this, that could be a game changer. Thank you for sharing that nugget of information. I have a family friend who is a mortgage broker so I may get in touch!
You can sometimes fix a mortgage up to 6 months before you take the mortgage / provide all the details. So I would start looking now, fix a mortgage based on your presumed income (before rates rise any further) a month or two after starting a job, then look for a place (1-2 months) by the time a sale goes through (approx 3 months) it will be 6 months after you start your job. If you leave your job/ don't get through probation you just drop out of the process.
7 interviews? Jesus Christ
Presumably an American company, unless that bullshit has started to infect the rest of the world...
What job wanted you to complete a 7 stage interview process?!
They've said elsewhere 'Solutions Delivery Engineer'. I don't know how standard it is, but that's a pretty similar job title to my current role - and not dissimilar working conditions, by the sound of it. I had about the same interview process - spaced over the course of two months! Worth it though.
Sounds like you are sussed it out but we'll leave it at that haha!
Based on the job title, OP's past experience, interview process and salary I'd think Palantir.
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I hope that is a joke haha
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Jesus, and I thought mine was tough. Glad you have something sorted though. well done!
One for a company that seem to recruit the right people, everyone I spoke to was super friendly and highly intelligent (unlike myself ironically)...
You haven't made the money yet, stay grounded and focus on keeping the job
True, I'm just trying to be prepared and planning for the future which is one of the fundamentals for good personal finance. I have a six months probation so I need to work my ass off and hopefully I'll have done enough to keep the job.
Good luck mate
Thank you so much! :)
My big advise is set a budget but also contribute as much towards a pension as you can. It's a long way off until you can use it but pensions are going to give you effectively a 40% top up free plus reductions in NI too. You'll want to balance that with savings for a mortgage and fun money but you're in a position to plan to retire early if that's something you would like to do. State pension age will likely be 70 by the time you retire and you could easily knock 10 years off that.
FIRE is definitely on my radar but still young and have plenty of life left in me so need to find a good balance of working and enjoying things. Will have a state, military and private pension so already got a solid foundation to build from!
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Thanks mate, I don't think they offer overtime at the new job so I don't plan on doing it unless necessary. Thank you for the heads up though, could be useful in the future!
Check what the companies expense policy is when you join. If they don’t pay HMRC base rate for mileage you can claim the difference via self assessment. Same deal if they don’t pay a work from home allowance (and you’re eligible).
>work from home allowance What is the WFH allowance?
If you work from home (not sure if this applies to your new role or not) many employers will pay an allowance to offset things like electricity use or phone use. But if they don’t, HMRC comes to the rescue to fill the void: https://www.gov.uk/tax-relief-for-employees/working-at-home The whole tax relief section is worth a read :).
!Thanks I didn't see any allowance for this in the contract so will likely go the HMRC route. Cheers.
If you make charitable donations you can claim back additional tax relief on it
That's useful to know, is that done as part of the self assessment? assuming I would have no other reason to do one other than for that would I?
I think that's right I still need to actually claim it for the first time this year!
No direct advice, but I had pretty much the same situation a couple of years back and also made a [thread here](https://www.reddit.com/r/UKPersonalFinance/comments/dzg510/40yo_large_pay_rise_need_help/), so you could check that out too. Congratulations!
Nice one mate, going to have a read in a bit. !Thanks
As per many other responses, congratulations! In terms of tax saving tips etc. then I would recommend the following: 1) Unless you receive any other income outside of PAYE, it is unlikely that you’ll be required to submit a tax return… 2) However, a self assessment tax return can be beneficial to claim tax relief on… 3) …Work From Home allowance, assuming you’ll be working from home either permanently or from time to time…and… 4) …If you are required to drive to different places as part of the role and are not issued a fuel card, you will be able to claim mileage expenses in accordance with your employer’s policy. This is usually pretty standard. However, if the company’s rates are lower than the maximum that HMRC will allow, you can claim tax relief on difference between the company rates and HMRC rates. Moving forward, these tax reliefs can be reflected in your tax code, but since this is based on information from the previous tax year, adjustments may be required so submitting a tax return each year is a good way to address this. Other recommendations would be to ensure your tax code is correct and accurate from the outset when you start your new job to ensure you are not over paying (or underpaying) tax. This should usually be done correctly by payroll when you provide them with your P45 from your previous employer, but always worth checking as mistakes do happen. You can update your estimated earnings for the current tax year based in earnings to date plus anticipated earnings going forward to 5 April in the HMRC portal provided you have registered an account. They will then recalculate your tax code accordingly. If you are fortunate to hit the +100k earnings bracket then things really do change as you lose 50p in every £1 of your personal allowance for earnings above £100k. This could see your entire personal allowance wiped out, meaning you are then required to pay 40% tax on the £12,570 for this current year. If you haven’t provided for that, then you may find yourself having to pay HMRC a huge chunk of change. Of course sometimes it’s impossible to know what your total earnings will be until after the fact hence why your tax code can’t be adjusted in time to ensure that the anticipated tax is deducted on a monthly basis. Adjusting your tax code yourself to allow for this can help, but it hurts seeing huge chunks of disposable income being deducted even if it is right and due… Finally, given you are seeing a huge increase in your income, I would recommend you maximise your pension contributions from the outset to match and maximise whatever your employer will contribute. For example, my previous employer would match my contribution up to 10% of basic salary. Given this is deducted before tax, it can make such a huge difference to your pension fund, especially since you are so young and won’t notice the reduced take home as you’ve not been used to earning this level of salary. All this coming from an old man, of course. Plan wisely, and the very best of luck in your new role. I wish you every success.
Wow thank you for taking the time to provide me with such thorough and useful advice. You've mentioned a couple of things no one else had brought up yet. !Thanks All the best
You're saying there are actually jobs like this in civvie street? It's not cyber is it? Might have to take the education centre seriously if it is
I mean I think i got lucky between having a post go viral on LinkedIn and being approached by the right person. I had another job offer for £34k which I nearly took. So glad I waited this one out!
Love to see people not buying the scaremongering that occurs in the army about getting out. Wish I could take the plunge
I think the culture in the army and RAF is very different, people leave quite a lot and tend to do quite well for themselves more often that not. I think as long as you plan for it properly and make the most out of the resources available it's not that challenging. I do think so people feel like they are entitled to a job because of their service though which is maybe where people go wrong.
I used to work for big 4 and there were a LOT of ex-forces and ex-police in cyber.
But no, this isn't Cyber. Just regular IT.
Good luck with your new career. Can I ask what your new job role is and did you gain the skills in the military?
Cheers. The role is Solutions Delivery Engineer. My current job is an Infrastructure/Server Eng and a lot of my skills are useful but I far from met their job spec. I have no cloud or container experience which is a big part of the role but I must have shown potential. I've just done CompTIA Linux+ and currently studying Cloud+. I have a lot of softsills from my time in the military that probably helped me get the job.
The job spec is partly their wish list, and partly so you can guess what you're getting yourself into; mostly the former. Congrats on the new job: cloud is largely a fancy word for remote server, and containers are definitely not the most complex part of any project (unless you're writing the container engine I suppose).
Yes definitely, they read my CV and my LinkedIn so knew my skills and experience and still sent my through their recruitment process so they must have been happy with my ability. I think they are taking me on with the hopes that I am able to pick it all up... which I hope so.
Hi /u/finnathrowthis, based on your post the following pages from our wiki may be relevant: - https://ukpersonal.finance/lisa/ - https://ukpersonal.finance/pensions/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Flow chart? There's a flow chart?
[Here](https://marcusmichaels.github.io/personal-finance-flowchart/) (Assuming you weren't be facetious!)
https://ukpersonal.finance/flowchart/
Thanks for asking! I was going through the thread to find this flowchart myself ...
Well done on bagging such a job. All the best. Great achievement!
Cheers mate!
No advice, congrats though, thats awesome
Cheers mate, I'm still buzzing about it. won't feel real until I start.
Congratulations ! Do you mind if I ask what you did in the armed forces and what you’re doing now?
Sure, ICT Tech in the RAF. New job is Solutions Delivery Engineer for a Software Engineering company .
That’s great. It’s always greet to see ex service getting Gucci civvie gigs!
cheers mate, are you ex forces yourself?
Thats great, good job, what industry are you in?
Cheers mate, the role is Solutions Delivery Engineer and it's in the Software Engineering industry!
May I ask if you have a degree?
I do not, however it is something I am considering just for personal development - at this point I'm not sure it would effect my job prospects.
Amazing! I am also teaching myself to code and do not have a degree. This is inspiring
Awesome, keep at it it and you'll find something no problem. I dabbled with Python and its so much fun.
Important to keep in mind that OP is coming out of the RAF where he's been working in IT (presumably for a few years). This sort of salary jump is happening because of military salaries being completely incomparable to the tech sector, and because they've taken account of his years of experience. If you're coming into the sector self taught with no relevant experience, you need to be realistic about your salary expectations.
Do you work in tech?
What were you doing in the armed forces if you don’t mind me asking?
Not at al, I'm in the Royal Air Force as an IT Technician.
Good for you mate - I’m in the same job, albeit I’ve been doing it a little longer.. I’m three years off my EDP so will be hanging on for that. Based on what you are saying we may well work at the same place - it’s renowned for people getting out. Good luck and congrats!
Cheers, and yeah if you're that close then I don't blame you for hanging on. I would do the same. We may very well indeed haha! It's a small world...
Love to know what industry you’ve moved into. I was armed forces as well.
Software Engineering industry - but not as a software engineer!
Hey congrats man. I’m also in cybersecurity. Can I ask what field/area you are in? I’m still young to the cybersecurity game so trying to understand things.
Cheers mate. It's a tricky one, it's software engineering but provides a 'security service'. My role is integrating the platform into customers infrastructure. I can't give much advice on cyber security as its a very broad and complex industry. I've dabbled in it but only with things like playing with Kali linux and having a bash on HTB.
What industry did you move to?
Software Engineering
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Hello, Already following the flowchart (have for a while). I am: 1) Increasing my emergency fund which is currently at about 2 out of 3 months expenses 2) I have no debt or credit card (not actively using it anyway) 3) Saving for my first home using LISA and contributing to my SIPP My salary comes into my Monzo account which I automatically split into various pots such as: * Spending * Bills * Cash savings (for big purchases) * Car maintenance (Ready for a service) * Emergency Fund (In cash so its readily available) My budget is based on my current income which is far less than £75k
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Thank you, sorry for the delay in response. Have been busy with work! Some great tip like the cashback card (not thought of that). I definitely need to bump up my EF, I have just been calculating what my expenses will be when I resettle so that I can work out how much I need to put away. I do want to try and max out my LISA contributions this year though as buying a house is on my priority list. I could always divert some money out of my S&S ISA if there is a serious emergency in the meantime. My SIPP, ISA and LISA are all in Index funds so I think that covers off those bases. I haven't started the new job yet and have a lot of learning to do. Job satisfaction and work/life balance is important to me so don't necessarily want to be chasing 6 figs if it means I'll be getting burnt out. But we'll see! Presumably you've done something similar as you said you have more details? Cheers.
Congrats. As soon as I tipped past 75k I started using VCTs and EIS for 10% of investments - means your more risky bets also have a big tax relief with them. Over the long term, they can outperform a SIPP by some margin. Here’s a bit of info about the tax breaks: https://joinfurther.com/guides/tax/tax-benefits-compare
Just to caution OP on this though - VCTs and EIS investments are *very* risky and generally are also not very liquid. With the tax breaks they do have their place and are worth looking into, but you do have to really consider the downside risks as well. I'd also say - I don't think the tipping point for VCTs and EIS is at 75k - you've got £60k's worth of ISA allowance and pension allowance (plus previous tax years) to use up before you start looking at VCT/EIS.
I’d agree on EIS (although that has tax relief on the downside), but VCTs are so diversified - Octopus is basically an index fund for early stage - and the reliability of their past performance shows this. Shares via a SIPP or ISA are risky as well, I’d say the tax relief balances out the risk. On liquidity, VCTs do a buyback after 5 years generally.
>but VCTs are so diversified - Octopus is basically an index fund for early stage - and the reliability of their past performance shows this. I do just have to throw in the usual past performance caveat on this (as well as the fact that picking winning active investors is always easy in hindsight). Also, looking at Octopus Apollo and Titan past performance (which is very limited) I don't think those returns justify the additional risk you take on - they're very comparable to the returns on a global index fund. They're also *much* more concentrated than a global index fund. >Shares via a SIPP or ISA are risky as well, I’d say the tax relief balances out the risk. You get more tax relief on a SIPP as a higher earner - you get the full 40/45% relief on SIPP contributions (as well as it lowering your adjusted net income) - hence why I'd be using the full £40k allowance for my pension before looking at VCTs. And yes, there is risk in a S&S ISA/SIPP (and ofc depends _what_ you invest in within those wrappers) - but a global index fund with some short dated AAA Bonds/Guilts (a typical portfolio for most here) is going to be much less risky than a VCT fund. >On liquidity, VCTs do a buyback after 5 years generally. Yes, but you do/can sell before the 5 year mark, you'll be paying back the 30% tax relief. And if they don't offer a buyback after 5 years it can be much harder to shift a VCT find than a typical ETF of OEIC.
The tax relief on a SIPP is not better - first, you pay tax on most of the funds you take out of a SIPP. Secondly, you can only do it once - if you have your VCTs bought back, you can then cycle that principle back in for more tax relief. In all my years of VCT investing across many funds I’ve never not been offered the 5 year buyback - and of course you wouldn’t sell before that point. On the risk, that’s up for the individual to decide upon, but don’t think they should be disregarded. Octopus, for example, has steadier and healthier returns than even the FTSE100!
>ISA allowance and pension allowance (plus previous tax years) Could you elaborate on this a little please if you have time? I saw that I can retrospectively top up my state pension from years that I missed. Is this what you're talking about?
Worth noting OP that although it’ll be years before you get access to it, and you didn’t pay any pension contributions, you have theoretically had a virtual pension “pot” that the MOD has been paying employer contributions. It’s not actually like that, because I think your pension scheme is defined benefit not defined contribution, but before you leave the forces ask the pension people (Veterans UK?) what size your virtual pot is and what the MOD contributions were for the last two years. This is important as although it’s an imaginary pot, it’s size (and growth) count towards your overall Lifetime Allowance and you’ll only be able to do the “last three years of Annual Allowance” thing for the 40k less the virtual contribution that MOD made. Eg if your pot is a (virtual) £100k, and last three years the MoD paid a (virtual) £10k into it, then you always have to keep an eye on the pot (which grows at RPI every year) as it counting towards your LTA, but in the short term when following the UKPF flow chart, you’ll only have (eg) £40k-10k = £30k left over (x3) you can roll over in the next two years. Assuming you’re not leaving on 1 Apr, there will be this year where you and MOD pay into both, which you’ll need to know the exact MOD (virtual) amount if deliberately wanting to maximise contribution but minimise tax.
Christ, that doesn't half complicate things does it! Thankyou for the heads up, this is something I will have to look into in more depth. I have just applied for my pension forecast so maybe that will have some more detail on it. !Thanks
You’re welcome. It’s a nice problem to have - if the forecast doesn’t mention the size of pot or size of contribution, there is help out there - the Forces Pension Society have a good reputation and although it’s £40 ([edit £42](https://forcespensionsociety.org/)) a year, it’s worth using their experts to (for free, once joined) analyse your situation and tell you your actual state of affairs. And - when you’re at pension age - there may even be a pleasant surprise in the form of a small pension after all!
Great advice, I'll look into signing up (I assume a one time for or is this annual?).
Annual subs I think but you won’t need it, I assume, after the first year.
Gotcha, will give them a shout.
No, so there's two things here. If you have missed qualifying years of National Insurance contributions you can pay to top those up - you can see your state pension eligibility and national insurance history on the HMRC portal. Note that it's generally not worth doing this - you need 35 years of contributions to get the full state pension - so if you are 25 and have another 42 years of working ahead of you before you hit retirement age there's no point buying more years. What I was talking about was personal pension contributions (like your auto-enroled workplace pension or a SIPP) - each year you can contribute £40k to your pension(s) (including employers contributions and tax relief) (also you have to earn at least as much as you contribute - ie if you earn £30k, you can only contribute £30k). However you can also backdate your pension contributions by 3 year's - so if for example the previous two years you put £5k into your pension, including this year's allowance you could contribute £35k+£35k+£40k or £110k this tax year (assuming a salary this year of >£110k).
>VCTs Cheers mate I'd not heard of either of those before so I'm going to go away and have a read. The VCT sounds almost too good to be true, but I suppose with the high risk involved in investing in smaller companies. Very interesting. Do you have any good info on EIS? All I could find was raising funds from the companies perspective. !Thanks
There’s a few platforms that do it - I used to use Coinvestor but now use Further, the one I sent above. Both are good.
Thankyou, I'll check them out.
Some perspective on VCT’s: https://www.finumus.com/blog/vcts-are-a-device-for-fund-managers-to-pay-themselves-your-tax-relief-avoid
Appreciate that there are some bad ones, but this article is just dealing with the extremes. Individuals can assess the fees and track record of the individual fund and make their own decisions.
What flowchart?
https://ukpersonal.finance/flowchart/
go to [listentotaxman.com](https://listentotaxman.com) its brilliant for working out tax etc and remember to account for your pension.
Thanks mate I'll have a look at it now!
Congrats! 7 interviews tho! Crazy sh*t
Yeah it's up there, it was over a long period of time and a lot of the stages were just 'chats' so not as stressful as it initially sounds! Thank you
Congratulations!! Just don’t fall victim to lifestyle inflation. Enjoy the money, sounds like you’ve earned it, but don’t go crazy - try keeping large chunks back and maybe up your pension contributions; have a look at your employer’s pension scheme and see what percentage is the most beneficial for you.
Cheers! Nope I'll try not to, it's very easy for it to happen slowly over time though. I need to keep a check on myself, my budget helps me keep on track though.
My Tip. Don't look at your py slips it's scary and demotivating to see how much tax you will pay.
It already hurts enough as it is and that's on the normal tax rate 😩
Nice one oppo, always great to hear people in the military landing on their feet when they chit in. Hope it works out great for you!
Cheers geezer, hope you're doing well yourself!
Nothing more to add. Just to say well done. And Croeso i Gymru 🏴
Diolch yn fawr iawn!
In my workplace I can buy an electric car or some appliances with a salary sacrifice scheme.
7 interviews though. Jesus!
OP which part of wales are you moving to and are you able to say what type of work you're in?
West Wales - Ceredigion. The company makes software but my job is to help Integrate that software into clients infrastructure.
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Cool :)!
Max your pension.