Si1 Posted January 12, 2016 Share Posted January 12, 2016 If I was saving that much I wouldn't bother trying to buy a house, I'd be saving to buy myself out of having to work ever again! Yes Quote Link to comment Share on other sites More sharing options...
Money Frugality Posted January 12, 2016 Share Posted January 12, 2016 Exactly after8mink.. So save the tax and student debt payments and dump it in pension whilst she still can.. Hence saving much more than 2k a month. Quote Link to comment Share on other sites More sharing options...
19 year mortgage 8itch Posted January 12, 2016 Share Posted January 12, 2016 And if she wanted a family and children? Quote Link to comment Share on other sites More sharing options...
sPinwheel Posted January 12, 2016 Share Posted January 12, 2016 And if she wanted a family and children? Marry someone rich. Quote Link to comment Share on other sites More sharing options...
South Lorne Posted January 13, 2016 Share Posted January 13, 2016 ..why buy now ... when the market is supported by government financial scaffolding ..keep saving and buy when prices are on the down.... Quote Link to comment Share on other sites More sharing options...
Venger Posted January 13, 2016 Share Posted January 13, 2016 220k buying power, rougly 55k salary, roughly 2.85k after tax, pension and plan 1 student loan, really is not hard to spend less than 200 quid a week with your only mandatory expense being travel to work of which sometimes she has all expenses paid She wants a property. She has it in mind to become a landlord. Maybe some hpcers should crowdfund her a bigger buying deposit. Quote Link to comment Share on other sites More sharing options...
Si1 Posted January 13, 2016 Share Posted January 13, 2016 ..why buy now ... when the market is supported by government financial scaffolding ..keep saving and buy when prices are on the down.... Because she needs to support her family's and get employer's prejudices. This gives her a sense of belonging. Quote Link to comment Share on other sites More sharing options...
Dorkins Posted January 13, 2016 Share Posted January 13, 2016 Exactly after8mink.. So save the tax and student debt payments and dump it in pension whilst she still can.. Hence saving much more than 2k a month. She's going to have to repay her student debt at some point, and given that the interest rate is RPI+x% and can be changed at will by the government better to clear it sooner rather than later before it gets too big. Or do you suggest she dumps everything over the student loan repayment threshold (£17.3k pa) into a pension for the next 40 years? Quote Link to comment Share on other sites More sharing options...
Money Frugality Posted January 13, 2016 Share Posted January 13, 2016 Mortgage, this is Britain not Spain nor the 90s. Nowadays if your under 30 have to choose between property, kids or retirement.. Doing any one puts the other further away. Quote Link to comment Share on other sites More sharing options...
Money Frugality Posted January 13, 2016 Share Posted January 13, 2016 In head calculations pretty sure she will save more in tax than the interest of her presumably 22k student loan (assuming type 1 undergrad taking maximum loan & type 2 4k masters). Student loans are just another credit big bubble.. Most on type 2 loans won't ever pay back with their history (unless your g.o) degress.. heck even if your on 30k a year your still cutting it close.. so defer it a few years via contributions and doesn't matter what the interest is, you'll end up spending less assuming you aren't planning to over pay on it. Yes they could say it doesn't get wiped after 30 years but then there's nothing stopping the grad from hopping across the pond. I've never done calculations for putting all above threshold tbh.. might sit down on excel and check one day because that's an interesting approach. Especially if your a type 2 the threshold moves (although frozen till 2020) it isn't right it was changed but realistically average grad starting salary is more like 24 rather than 28-30 level quoted. companies are tightening belts as much as the goverment, it's all relative. Quote Link to comment Share on other sites More sharing options...
Palangot Posted January 13, 2016 Share Posted January 13, 2016 The advice they give her is the same as always - but there is something missing from the analysis when they say "she could borrow up to £220k". Seriously - if that's all she can borrow and even depressing flats in bad areas cost £300k - there is something very wrong. Until the London market turns, we'll not hear the end of the property madness. Quote Link to comment Share on other sites More sharing options...
spacedin Posted January 15, 2016 Share Posted January 15, 2016 In head calculations pretty sure she will save more in tax than the interest of her presumably 22k student loan (assuming type 1 undergrad taking maximum loan & type 2 4k masters). Student loans are just another credit big bubble.. Most on type 2 loans won't ever pay back with their history (unless your g.o) degress.. heck even if your on 30k a year your still cutting it close.. so defer it a few years via contributions and doesn't matter what the interest is, you'll end up spending less assuming you aren't planning to over pay on it. Yes they could say it doesn't get wiped after 30 years but then there's nothing stopping the grad from hopping across the pond. I've never done calculations for putting all above threshold tbh.. might sit down on excel and check one day because that's an interesting approach. Especially if your a type 2 the threshold moves (although frozen till 2020) it isn't right it was changed but realistically average grad starting salary is more like 24 rather than 28-30 level quoted. companies are tightening belts as much as the goverment, it's all relative. Do her parents live in Cambridge? Otherwise she may have borrowed around 40k in student loans when maintenance is taken into account. And it does get wiped after 30 years unlike the old loans which get wiped at 65. Going abroad may make the loan situation worse, I've never been convinced by the way they calculate the payments abroad and she'd have to be very careful about telling them, otherwise it will turn into a commercial loan, one which won't get wiped upon bankruptcy too. Besides, she clearly doesn't want to move away from her family. Quote Link to comment Share on other sites More sharing options...
spacedin Posted January 15, 2016 Share Posted January 15, 2016 Another thing is that she'd be in a very good position to take on a shared ownership property. I hate shared ownership personally and wouldn't encourage anyone to get one but she'd be fine living in one thus her situation doesn't exactly lay sound desperate. She has a plethora of flats to choose from that meet the standard she requires. Quote Link to comment Share on other sites More sharing options...
Guest Posted January 15, 2016 Share Posted January 15, 2016 By the end of a 3 year undergraduate degree the tuition loan + maintenance loan + interest (they start charging interest on your year 1 loan as soon as you enter year 2 of your course) will be approaching 50k. I assume that doing a Masters piles on even more debt. If you never pay it off then you'll be paying the 9% loan tax on your earnings most of your career. That'll probably be more than the 50k anyway. So much for 'never paying it off'. My advice to students is: Do not go to University. If you did, pay off the loan as soon as you're in a position to do so. People should not just accept that they will be in debt their entire lives. Student loans are disgustingly unfair - just another way that inequality is passed down the generations in the 21st century UK. This lady should have got a free education and she should have been able to borrow 3.5x her salary to buy a flat in a middling to nice part of London. It worked for her parents' generation. She should stop dreaming about BTL and start being very angry indeed at how her living standards have been destroyed. Quote Link to comment Share on other sites More sharing options...
Guest Posted January 15, 2016 Share Posted January 15, 2016 Another thing is that she'd be in a very good position to take on a shared ownership property. I hate shared ownership personally and wouldn't encourage anyone to get one but she'd be fine living in one thus her situation doesn't exactly lay sound desperate. She has a plethora of flats to choose from that meet the standard she requires. Shared ownership is a trap. If she takes on a 25 or 30 year mortgage for 30% of a flat, and she's already a higher-rate taxpayer, how on earth is she going to afford the other 70% before she dies? Will she really be earning close to 200k, a decade or so down the line? She'll be paying both rent and a mortgage for that entire term. And if house prices continue to rise so will the cost of the remaining share, so she's not even locking in a price before she 'misses the boat'. And if she comes to sell, who will have the cash to buy a 600k shared-ownership shoebox? Far better to stay at home with her very generous parents. Quote Link to comment Share on other sites More sharing options...
PopGun Posted January 15, 2016 Share Posted January 15, 2016 By the end of a 3 year undergraduate degree the tuition loan + maintenance loan + interest (they start charging interest on your year 1 loan as soon as you enter year 2 of your course) will be approaching 50k. I assume that doing a Masters piles on even more debt. If you never pay it off then you'll be paying the 9% loan tax on your earnings most of your career. That'll probably be more than the 50k anyway. So much for 'never paying it off'. My advice to students is: Do not go to University. If you did, pay off the loan as soon as you're in a position to do so. People should not just accept that they will be in debt their entire lives. Student loans are disgustingly unfair - just another way that inequality is passed down the generations in the 21st century UK.This lady should have got a free education and she should have been able to borrow 3.5x her salary to buy a flat in a middling to nice part of London. It worked for her parents' generation. She should stop dreaming about BTL and start being very angry indeed at how her living standards have been destroyed. Again +1 to all that Quote Link to comment Share on other sites More sharing options...
spacedin Posted January 15, 2016 Share Posted January 15, 2016 Shared ownership is a trap. If she takes on a 25 or 30 year mortgage for 30% of a flat, and she's already a higher-rate taxpayer, how on earth is she going to afford the other 70% before she dies? Will she really be earning close to 200k, a decade or so down the line? She'll be paying both rent and a mortgage for that entire term. And if house prices continue to rise so will the cost of the remaining share, so she's not even locking in a price before she 'misses the boat'. And if she comes to sell, who will have the cash to buy a 600k shared-ownership shoebox? Far better to stay at home with her very generous parents. Yes it's a trap but she can afford it so why is she talking about roping in her parents or friends into the equation? Why has she got it into her head that she doesn't need government help but is happy to rely on the help of her friends or her parents? That Help to Buy ******** is actually designed for people in her position. We presume she needed financial help from the government to go to university, even if that's in the form of a loan, why is she so averse to taking it now? Quote Link to comment Share on other sites More sharing options...
VeryMeanReversion Posted January 15, 2016 Share Posted January 15, 2016 My advice to students is: Do not go to University. If you did, pay off the loan as soon as you're in a position to do so. I've been wondering about advice like that for my kids. The student loan calculator on MSE is a good tool for working out whether it is worth paying it off or not. In most cases, it seems to be not worth it. If you have done a useful degree and expect a good salary, best to pay it off asap. If I was 18 again: 1. Stay at home with parents 2. Do a useful degree via OU 3. Work somewhere where you can get some relevant experience. Any salary will do. Blag some money towards course fees after a while. 4. Takes 5 years but you end up with no debt, a useful degree and some experience If is was 24 again. 1. Don't bother coming back to the UK 2. Don't register with the student loans people, change name (a bit) Quote Link to comment Share on other sites More sharing options...
Si1 Posted January 15, 2016 Share Posted January 15, 2016 (edited) I've been wondering about advice like that for my kids. The student loan calculator on MSE is a good tool for working out whether it is worth paying it off or not. In most cases, it seems to be not worth it. If you have done a useful degree and expect a good salary, best to pay it off asap. If I was 18 again: 1. Stay at home with parents 2. Do a useful degree via OU 3. Work somewhere where you can get some relevant experience. Any salary will do. Blag some money towards course fees after a while. 4. Takes 5 years but you end up with no debt, a useful degree and some experience If is was 24 again. 1. Don't bother coming back to the UK 2. Don't register with the student loans people, change name (a bit) FE colleges do some worthwhile degrees for about 4 to 5 k per year tuition fees, can do full time but break up into two chunks, year 1-2 for which you are awarded a formal 'foundation degree' award, and if you get 2.2 standard then can go onto a'top up' year immediately afterwards or with a gap, to get a full degree. Just a thought for those considering these things for their kids. I rate the subjects like applied science, medical science, or applied IT or business, these are useful employable degrees and can lead to further more advanced study too. Things like media and photography, I recommend less highly. For the 'good' degrees they do, I doubt employers would discriminate to hard against them when lower education costs are the motivating factor. Edited January 15, 2016 by Si1 Quote Link to comment Share on other sites More sharing options...
Timak Posted January 15, 2016 Share Posted January 15, 2016 I've been wondering about advice like that for my kids. The student loan calculator on MSE is a good tool for working out whether it is worth paying it off or not. In most cases, it seems to be not worth it. If you have done a useful degree and expect a good salary, best to pay it off asap. If I was 18 again: 1. Stay at home with parents 2. Do a useful degree via OU 3. Work somewhere where you can get some relevant experience. Any salary will do. Blag some money towards course fees after a while. 4. Takes 5 years but you end up with no debt, a useful degree and some experience If is was 24 again. 1. Don't bother coming back to the UK 2. Don't register with the student loans people, change name (a bit) Going to University was great. I made life long friends, met my now wife, and had 3 fun years in a nice environment. However I could have learned more in 6 months browsing Youtube then I did in 3 years of "study". I left with a 2:1 in Economics without even knowing the basics. Looking back the educational part of my time was massively less significant than the moving away from home and having to grow up bit. Quote Link to comment Share on other sites More sharing options...
Si1 Posted January 15, 2016 Share Posted January 15, 2016 I left with a 2:1 in Economics without even knowing the basics. Looking back the educational part of my time was massively less significant than the moving away from home and having to grow up bit. You're more honest about it than Kate Barker! Quote Link to comment Share on other sites More sharing options...
spyguy Posted January 15, 2016 Share Posted January 15, 2016 Going to University was great. I made life long friends, met my now wife, and had 3 fun years in a nice environment. However I could have learned more in 6 months browsing Youtube then I did in 3 years of "study". I left with a 2:1 in Economics without even knowing the basics. Looking back the educational part of my time was massively less significant than the moving away from home and having to grow up bit. I that you Mr Mark Carney? You're quite smart for a economist. Must do not admit they are out of their depth. Quote Link to comment Share on other sites More sharing options...
justthisbloke Posted January 15, 2016 Share Posted January 15, 2016 By the end of a 3 year undergraduate degree the tuition loan + maintenance loan + interest (they start charging interest on your year 1 loan as soon as you enter year 2 of your course) will be approaching 50k. I assume that doing a Masters piles on even more debt. If you never pay it off then you'll be paying the 9% loan tax on your earnings most of your career. That'll probably be more than the 50k anyway. So much for 'never paying it off'. My advice to students is: Do not go to University. If you did, pay off the loan as soon as you're in a position to do so. People should not just accept that they will be in debt their entire lives. Student loans are disgustingly unfair - just another way that inequality is passed down the generations in the 21st century UK. My son didn't get a degree but very easily got a reasonable job. His peers are mainly grads with a variety of degrees and debts. OK, he's not on some well paid graduate trainee fast track but, benefiting from the cheap rates (£200pm) at the Hotel of Mum and Dad (HOMAD) he's still whacking £1k a month into savings. Quote Link to comment Share on other sites More sharing options...
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