Can you afford to go perm or inside IR35?

[edison]

That's a really daft thing to suggest. Hey kids, we're going to uproot you all from your friends and school, mummy and daddy will now be doing 6 hour commutes to work and you all get to share a bedroom (no fighting for the top bunk!) cos that means we pay less to live.

Oh yeah, and we're moving to Doncaster

What a ridiculous response! There are similar size houses to where I live in the same school catchment area that cost at least 200k less. If the OP is that worried about his situation then he should consider all options and these don't have to mean relocating so far away.

[Fraidycat]

What a ridiculous response! There are similar size houses to where I live in the same school catchment area that cost at least 200k less. If the OP is that worried about his situation then he should consider all options and these don't have to mean relocating so far away.

Its an option, i would have no problems with if if things ever came down to that point, but i don't think Mrs FC would go for it as she is more status conscious than i am.

[FIERCE TANK BATTLE]

Damn that's a huge mortgage payment! Hahah. Mine was like, £600/month and I asked them to put it up at remortgage as high as they could and it's now around £1100, you must live in quite the chalet at £2000/month lol

One thing to note is that many lenders allow you to undo your overpayments, so if you overpay a lot and then go crap I need the money, you can get it back. Obviously some caveats about time frames and such but something to think about.

[Permatractor]

Not in London


Sent from my iPhone using Contractor UK Forum

I would never accept 47 in London (65k minimum) This role is in Herts & actually the shares are currently around 5% & not 3% like I thought so won't be all that far from 50k. Still not as good as contracting (even inside) but my latest contract rate wasn't great & I hated the role so time to switch over to perm for me. I will miss contracting though.

[eek]

What a ridiculous response! There are similar size houses to where I live in the same school catchment area that cost at least 200k less. If the OP is that worried about his situation then he should consider all options and these don't have to mean relocating so far away.

The cost of moving is probably enough however to remove all short and medium term benefits of reducing the mortgage payment.

As I said given that interest rates are low the best approach is to fix the rate (as they are currently low) increase the term and then keep payments where they are via overpayments.

Then if things go bad you only need £4k a month to live on not £5k.

[hobnob]

When I was in London (1 bedroom flat), my mortgage was originally £600/month; I reduced that to £40/month by the time I left.

When was that??

I bought the flat for £100k in 2004, and sold it in 2018. This was in Croydon (zone 5), and the flat was above a shop, so not super luxurious! However, there are good train lines from there into central London.

I got lucky with the mortgage: I had a fixed interest rate for a few years, which then reverted to "base rate + 2%". So, when the fixed term ended, my mortgage payments got significantly cheaper! (The banks don't offer that deal anymore...) That also meant that I didn't have any limits on overpayments, so after I'd paid off credit cards and unsecured loans I threw all my spare cash at the mortgage. I was in a permie job paying £60k, which was enough to cover my costs and leave a surplus.

I keep an Excel file for my personal budget, with monthly/annual costs. Based on that I can calculate how much net income I need to live off, then I can use online calculators to figure out what gross salary would provide that. Obviously everyone's circumstances will be different (e.g. I don't have any dependents), but I could maintain my current lifestyle on a £40k gross salary (in a permanent job), and I'm currently on £280/day (inside IR35). I'd love to get one of the contracts I hear other people talking about here (e.g. £700/day outside IR35), but I don't need that to pay the bills.

Not sure if that's any use to the OP, but hopefully it answers the question.

[ladymuck]

I bought the flat for £100k in 2004, and sold it in 2018. This was in Croydon (zone 5), and the flat was above a shop, so not super luxurious! However, there are good train lines from there into central London.

I got lucky with the mortgage: I had a fixed interest rate for a few years, which then reverted to "base rate + 2%". So, when the fixed term ended, my mortgage payments got significantly cheaper! (The banks don't offer that deal anymore...) That also meant that I didn't have any limits on overpayments, so after I'd paid off credit cards and unsecured loans I threw all my spare cash at the mortgage. I was in a permie job paying £60k, which was enough to cover my costs and leave a surplus.

I keep an Excel file for my personal budget, with monthly/annual costs. Based on that I can calculate how much net income I need to live off, then I can use online calculators to figure out what gross salary would provide that. Obviously everyone's circumstances will be different (e.g. I don't have any dependents), but I could maintain my current lifestyle on a £40k gross salary (in a permanent job), and I'm currently on £280/day (inside IR35). I'd love to get one of the contracts I hear other people talking about here (e.g. £700/day outside IR35), but I don't need that to pay the bills.

Not sure if that's any use to the OP, but hopefully it answers the question.

Yeah technicallly Croydon is part of Greater London but it's really just the crap end of Surrey. No wonder you could buy a flat there by collecting bar codes off packets of Frosties.

[BigJohn]

There’s a lesson in all of this, don’t fall victim to lifestyle inflation when you pick up good day rate contracts.

It just keeps you trapped in the rat race longer than you should be if you’re earning double or treble what the permie colleagues are getting because your sky high expenses they have taken your savings rate to virtually zero.

Also sounds like OP wouldn’t mind living a basic life and saving some money so if you’re single don’t get married and if you’re married you control the finances.

[Fraidycat]

There’s a lesson in all of this, don’t fall victim to lifestyle inflation when you pick up good day rate contracts.

It just keeps you trapped in the rat race longer than you should be if you’re earning double or treble what the permie colleagues are getting because your sky high expenses they have taken your savings rate to virtually zero.

Also sounds like OP wouldn’t mind living a basic life and saving some money so if you’re single don’t get married and if you’re married you control the finances.

My life style really isn't that inflated. Its not like i lease new german cars and take multiple holidays abroad.

Really my only extravagance/ out of control spending is spending £500 a month more on food compared to a lower income family.

In London a 100K a year perm salary, or 135K inside IR35 salary, can these days only support a moderately better than average family lifestyle.

High taxes and high cost of living. And it only gets worse every year.
Although 2020 has been an exception, but not the kind we would ever hope for. But the sting in the tail is going to be more tax rises in the years a head.

[SueEllen]

My life style really isn't that inflated. Its not like i lease new german cars and take multiple holidays abroad.

Really my only extravagance/ out of control spending is spending £500 a month more on food compared to a lower income family.

In London a 100K a year perm salary, or 135K inside IR35 salary, can these days only support a moderately better than average family lifestyle.

High taxes and high cost of living. And it only gets worse every year.
Although 2020 has been an exception, but not the kind we would ever hope for. But the sting in the tail is going to be more tax rises in the years a head.

You think your lifestyle isn't inflated.

Anyway go to MSE and learn how to save money in things you don't need to spend a lot on.