Climbing the housing ladder and planning for a comfortable retirement are two of the most common financial goals. However, very few attempt both at the same time.
Harry Smeeden, a 33-year-old doctor from Salisbury, Wilts, has a long-term vision. He wants to buy his first house with his partner in the next 12 months.
After that, he plans to invest so that he can retire comfortably at age 60 with an income of £ 40,000 a year.
An avid light aircraft pilot and former RAF reservist, Dr Smeeden is keen to buy a house worth between £ 400,000 and £ 450,000.
His annual moves as a junior doctor had made it difficult to choose an area to buy, he said, but he settled in Salisbury after moving to Cathedral City from his native Yorkshire.
For a deposit, Dr Smeeden saved £ 32,396 in a Lifetime Isa. He also expects to receive £ 50,000 from his parents which, together with £ 50,000 from his partner, will bring their deposit to £ 132,000.
Dr Smeeden also has £ 92,000 in an Isa and £ 15,280 in a personal pension, mostly invested in individual stocks. He has taken an adventurous approach to investing and is open to taking risks.
However, as a young doctor, he said that he did not have the time or the expertise to continue investing in stocks and would rather like to transfer his savings to funds, ideally those that invest in such a way. ethics.
He has £ 5,500 in cash and earns around £ 65,000 a year, but can work additional shifts as needed to earn an additional £ 12,000 a year.
In five years his salary is expected to increase by £ 10,000 and in 15 years he hopes to earn £ 100,000 as a consultant.
He doesn’t want to save every penny, however, and would like to take two big vacations a year at a cost of around £ 5,000.
With a secure and growing income, Dr Smeeden has a good place to start. But is there enough to fund a comfortable retirement?
Nick Onslow, UK Group Certified Financial Planner
Dr. Smeeden’s financial goals are typical of young people: to own property, to enjoy life and to plan for retirement. He is in a very strong position to make this a reality.
I believe the most important part of his financial planning is to climb the housing ladder. Mortgage rates are very low. However, inflation in September jumped to 3.1 pc and there are forecasts of 4 pc by Christmas. Banks have already started raising interest rates in response.
It would be a good idea for Dr Smeeden and his partner to take out a five-year fixed rate mortgage to protect against future rate increases.
If they bought a £ 450,000 house with a deposit of £ 100,000, the best rate is a five-year fix from Atom Bank to 1.59pc. It comes with an arrangement fee of £ 1,500, which can be added to the loan, and if taken over 25 years would result in monthly repayments of £ 1,415.