Wealth Check: 'We took a chance moving to France, but what now?'

Writer Sue Tabbitt moved abroad three years ago, with her Canadian husband, Nicholas. Ms Tabbitt works as a freelance copywriter and journalist, while Mr Tabbitt teaches dancing.

Writer Sue Tabbitt moved abroad three years ago, with her Canadian husband, Nicholas. Ms Tabbitt works as a freelance copywriter and journalist, while Mr Tabbitt teaches dancing.

The couple admit that they took a risk by moving to France, where they bought an old watermill with a view to running dancing holidays. The mill in a country area in the North, was bought with a mortgage of £70,000, three years ago.

But now, with two young children, they are looking for ways to cut costs and to produce a more stable income. They have put their mill on the market and might even consider returning to the UK.

We put their case to Anna Bowes at Chase de Vere, Gillian Cardy at Professional Partnerships Independent Financial Planning and Jennifer Storrow at Gee

SUE TABBITT, 35, FREELANCE JOURNALIST

Eduction: BSc in Psychology from Lancaster University

Debt: £13,000 on credit cards; £3,000 overdrafts

Salary: Sue's business has a turnover of £45,000

Property: A mill in France, bought with a mortgage of £70,000, three years ago.

Savings: £200 a month into an offshore account

Investments: None

Pension: Private, company and state pension plans

Outgoings: An average of £2,000 per month, after tax and social charge payments

DEBT

Part of the Tabbitts' problem is that, although their mortgage is relatively low, their other debts are high, at more than £16,000. Much of the debt is on credit cards, usually the most expensive way to borrow.

Looking around for cheaper ways to borrow - such as moving some of the money to a credit card offering an interest-free period for balance transfers - will help, says Ms Storrow. Ms Bowes suggests that consolidating the non-mortgage debt to a low-rate bank loan could help.

But the experts agree that the Tabbitts cannot put off undertaking a thorough appraisal of their budget, and that this will undoubtedly mean cutting their outgoings. "They will need to budget for paying off the debt and stick to it. This will probably mean tightening their belts for the time being," cautions Ms Bowes.

SAVINGS

Savings are simply not a priority when there are debts to service. Ms Cardy suggests that the couple should use the money from their offshore accounts to pay off some or all of their debts. "It doesn't make sense to have savings whilst debt is accruing at credit card rates," she says. Ms Storrow agrees that cutting debt should come before savings.

PENSION

Although most of us fail to save enough for retirement, the Tabbitts are unfortunately not really in a position to add to their pension savings right now. Ms Tabbitt and her husband both have some pension funds from the UK, and she pays into a French state pension, which is compulsory.

Ms Cardy says that the Tabbitts should leave any changes to their pension arrangements until they know whether they are staying in France or coming back to the UK. Ms Bowes says that they could consolidate their savings into one pension plan, assuming their pension scheme rules allow it. Ms Storrow suggests the couple should take specific advice about their pensions, once they know whether they can join an occupational scheme in the UK.

MORTGAGE AND PROPERTY

The Tabbitts might be able to find a cheaper mortgage deal, but switching charges and legal fees could wipe out any immediate savings. Again, much depends on the longer-term plan. "Releasing capital from your property may be sensible in principle, but do your sums properly, as the cost of living in a smaller property may not be significantly lower, especially after you have deducted the cost of living," says Ms Bowes.

MOVING BACK TO THE UK

The Tabbitts need to think long and hard about whether moving back to the UK is what they want - and whether it will really make them any better off. Ms Tabbitt is already worried that they might be priced out of the UK property market, and some other costs, such as childcare, will almost certainly go up if they return.

Ms Cardy suggests that the Tabbitts might want to look at ways of boosting their income and cutting their costs in France, short of abandoning their dream and returning home. They might be able to do more marketing, or review the services they offer and the prices they charge.

They might also be able to think outside the box and look at ways to restructure their lifestyle in order to cut costs, Ms Cardy says. For example, could changing their working arrangements do away with the need for childcare?