Wealth Check: 'I'm living with my Mum, and I want to move out'

Mary Barber has worked as a sales manager for a soft drinks company for a year. She currently shares a two-bedroom flat with her mum, but would like to move out, ideally by February next year. She isn't sure, however, whether her finances are in good enough shape to justify taking on a mortgage.

Mary's current salary is £28,000 and she gets a bonus worth up to a further 20 per cent of pay each year. She does have a small amount of savings and she has also joined her company's pension scheme. However, Mary does have some debts, including a student loan of £1,248 and a loan from Barclays with more than £3,600 still to repay.

We asked three financial advisers for their advice: Drew Wotherspoon, of John Charcol; Ben Yearsley, of Hargreaves Lansdown; and Darren Littler, of Savills Private Finance.

Case notes

Mary Barber, 25, sales manager, London

Salary: £28,000, plus a yearly bonus.

Savings: A Barclays savings account that currently holds £4,000 and an ISA with Abbey, worth about £2,200.

Debts: Student loan with £1,248 to pay and £3,632 on a Barclays bank loan.

Pension: Mary is a member of her work money purchase pension scheme.

Monthly spending: £830 on living expenses and bills.


Mary believes she would be able to get a mortgage of around £150,000 and this is about right looking at her salary and bonus, the advisers say. However, before purchasing a property Mary needs to think about both the initial costs and the ongoing payments.

Littler says that Mary needs to remember that the upfront costs of purchasing a property include stamp duty - on a property of £150,000, this would be 1 per cent or £1,500. Then there will be the lender's valuation fee, the survey and legal costs - these could easily add up to a further £1,500.

These costs will obviously affect the size of the deposit Mary can put down, though some lenders will assist with these costs. Northern Rock contributes £500 towards legal bills on completion, for example.

Mary has made a decent start with her savings but she should increase them to at least £7,500 in the next few months. That would be a deposit of 5 per cent on a property with a purchase price of £150,000, giving her access to cheaper mortgage deals. The difference in price between a 95 per cent and 100 per cent mortgage is about 0.35 percentage points, which equates to a saving of about £25 a month, says Wotherspoon.

Wotherspoon also thinks that Mary should consider spending slightly less on a property and instead use some of her savings to pay off her bank loan. However, this depends on what's available in her local housing market - at the very least, she must make sure the interest rate on the loan is competitive.


Everyone should have at least three to six months' salary saved for a rainy day and the ideal place is a mini cash ISA - a tax-free and easily accessible account. Mary's Abbey ISA is therefore a good account.

Mary's debts are relatively small, according to Yearsley, and should be paid off in a couple of years. He doesn't think she should be too concerned about them, though he also thinks that she may be able to find a cheaper interest rate.

Once Mary has bought her property she should start looking at her long-term savings - a stocks and shares ISA would be a good place to start. Yearsley suggests that Mary should invest via a fund supermarket in order to get access to a range of different fund management companies under the same roof.


Mary has made a good start with her pension, and she would be happy to increase her monthly contributions. There's no reason why she shouldn't if she can afford to, but she is saving more than most people her age, so there's no rush.

However, Yearsley suggests that Mary should check that her pension funds are performing well. He also points out that, with so long to go to retirement, she can afford a higher degree of risk. Mary should realise, though, that her aim of retiring by 50 may not be possible as the pension rules are changing.


Another key issue is income protection, and Mary needs to check with her employer to see if they offer any sort of cover. Permanent health insurance or critical illness cover would be worthwhile for someone with no dependents. This type of insurance can be expensive, but will cover you if you can't work due to ill health.

For a free financial check-up, write to Wealth Check, 'The Independent', 191 Marsh Wall, London E14 9RS, or e-mail cash@independent.co.uk

Life and Style
LifeReddit asked a simple question with infinite answers this week
Life and Style
Pepper, the 3ft 11in shiny box of circuits who can tell jokes and respond to human emotions
techDavid McNeill tests the mettle of one of the new generation of androids being developed in Tokyo
Life and Style
Arts and Entertainment
Armando Iannucci, the creator of 'The Thick of It' says he has
tvArmando Iannucci to concentrate on US show Veep
Luis Suarez looks towards the crowd during the 2-1 victory over England
German supporters (left) and Argentina fans
world cup 2014Final gives England fans a choice between to old enemies
Arts and Entertainment
A still from the worldwide Dawn of the Planet of the Apes trailer debut
peopleMario Balotelli poses with 'shotgun' in controversial Instagram pic
A mugshot of Ian Watkins released by South Wales Police following his guilty pleas
peopleBandmates open up about abuse
Basketball superstar LeBron James gets into his stride for the Cleveland Cavaliers
sportNBA superstar announces decision to return to Cleveland Cavaliers
Javier Mascherano of Argentina tackles Arjen Robben of the Netherlands as he attempts a shot
world cup 2014
Arts and Entertainment
The successful ITV drama Broadchurch starring David Tenant and Olivia Coleman came to an end tonight
Four ski officials in Slovenia have been suspended following allegations of results rigging
sportFour Slovenian officials suspended after allegations they helped violinist get slalom place
14 March 2011: George Clooney testifies before the Senate Foreign Relations Committee during a hearing titled 'Sudan and South Sudan: Independence and Insecurity.' Clooney is co-founder of the Satellite Sentinel Project which uses private satellites to collect evidence of crimes against civilian populations in Sudan
Arts and Entertainment
Balaban is indirectly responsible for the existence of Downton Abbey, having first discovered Julian Fellowes' talents as a screenwriter
tvCast members told to lose weight after snacking on set
Life and Style
More than half of young adults have engaged in 'unwanted but consensual sexting with a committed partner,' according to research
Life and Style
A binge is classed as four or more alcoholic drinks for women and five or more for men, consumed over a roughly two-hour period
Finacial products from our partners
Property search
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business


    £50000 - £70000 per annum: Harrington Starr: Business Analyst Consultant (Fina...

    Programme Support, Coms, Bristol, £300-350p/d

    £300 - £350 per day + competitive: Orgtel: My client, a leading bank, is curre...

    (Junior) IT Systems Administrator / Infrastructure Analyst

    £28000 - £32000 per annum + pension, 25 days holiday: Ashdown Group: A highly ...

    Finance Officer

    Negotiable: Randstad Education Birmingham: Randstad Education are seeking a Fi...

    Day In a Page

    A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

    A History of the First World War in 100 Moments

    Peace without magnanimity - the summit in a railway siding that ended the fighting
    Scottish independence: How the Commonwealth Games could swing the vote

    Scottish independence: How the Commonwealth Games could swing the vote

    In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
    Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

    A writer spends a night on the streets

    Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
    Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

    UK's railways are entering a new golden age

    New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
    Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

    Conchita becomes a 'bride' on Paris catwalk

    Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
    Pétanque World Championship in Marseilles hit by

    Pétanque 'world cup' hit by death threats

    This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
    Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

    Why did we stop eating whelks?

    Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
    10 best women's sunglasses

    In the shade: 10 best women's sunglasses

    From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
    Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

    World Cup final: Messi? Mascherano is key for Argentina...

    No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
    Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

    Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

    18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
    The true Gaza back-story that the Israelis aren’t telling this week

    The true Gaza back-story that the Israelis aren’t telling this week

    A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
    A History of the First World War in 100 Moments: The German people demand an end to the fighting

    A History of the First World War in 100 Moments

    The German people demand an end to the fighting
    New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

    New play reveals what Oscar Wilde said at trials

    For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
    Can scientists save the world's sea life from

    Can scientists save our sea life?

    By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
    Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

    Richard III review

    Martin Freeman’s psychotic monarch is big on mockery but wanting in malice