Author Archives: Financial Independence UK

March Dividend Update




“Image courtesy of Master isolated images / FreeDigitalPhotos.net”.

March has been and gone, so it’s time to update how I have done on the dividend front for the month.

My dividend income in March last year was £414.89, this year it has increased by a whopping 46.96% to £609.70. The dividends paid in my SIPP increased by 37% to £343.39 and in my ISA they increased by 62% to £266.31.

The individual payments are shown in the table below.

Continue reading

Financial Independence – Step 1 Completed



Friday was the day I formally submitted my letter of resignation, so step 1 of our journey to Financial Independence has been completed.

I have asked to leave on 9th June 2017, which is earlier than my contracted notice period, but I believe that I will be able to leave on this date.

Mrs FIUK (who will also stop work on the same date) and I have picked the 9th June as it is around the time when I will have earned the full value of my annual tax free allowance, so all my earnings for 2017 / 2018 will be tax free, as an added bonus I will have paid tax through PAYE therefore I will get a refund at the end of the tax year. We have also picked this date as it will allow us to start our Financial Independence period during the long days of Summer, and should also be able to be outside doing the things that we enjoy instead of being shackled to our desks in an office.

Once we no longer have to turn up for work 5 days a week, it will allow us to get up later in the morning, look at the weather and choose to do what we want to do, so if the weather is good that day we can go out walking or cycling in the beautiful scenery that surrounds us, see photo below of Ennerdale which is about 20 minutes away.

We could choose to work in our garden, which although it is not massive, has been left mainly as grass to minimise the time required to maintain it during the two days per week we currently have off work. In future we will be able to create a garden that we enjoy, as the time we have for tending to it will only be governed by the weather.

If the weather is not so brilliant, we could choose to bake bread, cook a lovely meal from scratch, make meals that we can freeze for future to use up leftover food (which we tend to throw away at present). We may also not feel that we want to minimise the time spent doing our weekly shopping as we will have seven full days a week instead of two, and therefore we can shop around to get the best value, which may involve shopping at several shops in order to obtain the best quality at the best prices as compared to currently wanting to “waste” as little of our weekend as possible. This should also allow us to keep more of our spend local and help local shopkeepers.

The extra time will also give us the opportunity to undertake voluntary work either for charities to help people who are in need of assistance, or for nature and wildlife organisations to help protect the environment in which we live.

Red squirrel from our living room

All in all, once we have finished work, we have total choice of the things that we do, and when we do them, so it fits in with our chosen lifestyle as compared to the present where it has to fit around the demands of our employers.




Aviva Dividend up 12%




Image courtesy of Ambro at FreeDigitalPhotos.net

The insurance company Aviva have today released their final results for 2016, and I love the opening statement

 “Aviva’s results are simple and clear cut: more operating profit,  more capital, more cash, more dividend. And there is more to come.”

The report then went on to report that operating profit was up 12%, and their total dividend for the year was up by the same amount. The real potential icing on the cake was the statement

Continue reading

February Dividend Update




Image courtesy of Gualberto107 / FreeDigitalPhotos.net

It’s one of my favourite blog topics today, and that is to write an update on the dividends I received in February. With increases from all the companies (ranging from 10% by Vodafone to only 1% for United Utilities) I received the sum of £510.20

 The details of dividends received are contained in the table below.

Continue reading

January Dividends




My dividend income in January was a total of £540.64, which was made up of £381.45 from my SIPP and £159.19 from my ISA, this is an increase of £13.80 from January 2016. This is a disappointing 2.62% increase as Amec Foster Wheeler cut their dividend, but this is still more than inflation over this period, and it is possible that they will grow their dividend again as they start to benefit from the rise in the oil price, which is one of their key markets.

The details of dividends received in January are shown in the table below:

Continue reading

Even a Small Dividend Increase is Good News




BAE Systems announced their year end results on Thursday, which showed an increase in orders received and order backlog, plus an increase in Operating Profit (on a constant currency basis). The important bit from my point of view is that they also increased their dividend, which although this was only by 2%, it is still an increase.

As a result of this dividend increase I have effectively received this pay rise without having to expend any effort, or having to turn up in one place each workday, so as a result I have received £470 in dividends in the last twelve months, and if they match the 2% rise next year I will receive nearly £480 in dividends.

Although this increase is not a huge increase, there are companies who are raising their dividends significantly (see post on BHP Billiton’s increase), so overall I should receive total increases that beat inflation.

In addition to the dividend increase, the share price of BAE Systems has increased by around 25% in the last 12 months, which as I am approaching the time when I will be taking cash out of my FIRE Engine will increase either the amount I can withdraw each year, or the length of time before I will have used up all of the value of my FIRE Engine.




BHP Billiton Dividend Increases by 150%!




BHP Billiton have today announced their 2017 Interim Dividend at 40cents per share, which is a massive 150% increase from last year’s 16cents. The increase is due to the improved profitability as a result of the increase in commodity prices that has been experienced over the last year or so.

Although the increase is obviously welcome it is still less than the dividends paid in 2014 and before, but profits have not yet returned to the levels they were at that time. However, if the 40cents was repeated in the final results, the dividend yield would be around 4.5% in sterling terms (based on a $1.25 to £1 exchange rate), which is well above the FTSE average.

Continue reading

Strategy for using my FIRE Engine





When Mrs FIUK and I finish work, we will need to provide an income to pay our bills from our investments. As there is not enough in our SIPP and ISA to cover these costs from dividends / investment growth alone until we are receiving our state and final salary pensions, we will need to gradually reduce the value of our investments.

We have therefore calculated the drawdown of our SIPP/ISA to ensure that we should not use up our investments before we receive our pensions.

Based on the current position, our investments when we finish work should be:

 

            Value of SIPP, ISA and Company Pension                £261,5001

 

            Cash available                                                              £21,000

            Value of Company Shares                                          £17,500

 

1 includes payments into my SIPP and ISA up to June 2017 as finishing work in June means we will be able to receive a rebate of the tax on our earnings of approximately £2,500.

  Continue reading

Financial Independence is Just Round the Corner




I haven’t posted anything for such a long time as I didn’t feel I had much to say other than monthly dividend reports, new purchases etc.

Now however, Mrs FIUK and I will be stopping work this year and living off of our SIPP / ISA until our final salary pensions and state pensions kick in, so I thought that I would resume posting in the lead up to this exciting moment and report on how I have calculated that we can live without salaries. Once we are no longer working I will also be able to show what can (or can’t) be achieved with regard to leaving work early without a huge pension pot (I define huge as above £500,000 as this would provide £20,000 per year with a withdrawal rate of 4%). Continue reading