ยฃ2000 to save/invest then ยฃ100-ยฃ200 per month

ยฃ2000 to save/invest then ยฃ100-ยฃ200 per month

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Discussion

sbarclay62

Original Poster:

271 posts

21 months

Wednesday 3rd March
quotequote all
Morning all,

I've just come into some cash and for the first time in my life i've no debt and have no urge to waste it (which is exactly what would've happened pre covid). I've never had any savings so its all quite alien to me.

Whats the best/easiest/safest solution for some long term saving? My plan would be put the £2000 into an account then top it up each month. If its a quiet month spending wise i could put £200 in (i.e Jan and Feb when there's not much socialising), a normal month £100 in and if its a busy month (xmas or going on holiday) then may skip it and put nothing in.

I guess the best returns would be a pension but that means i couldn't access it for emergencies or what have you. ISA interest rates seem ridiculously low, buying individual shares seems quite risky. So thinking a stocks and shares ISA or bonds. Any opinions on these two? Any other thoughts?

Blitzed all the money I earnt during my teens and twenties (and had a blast so no regrets) but now starting to be more sensible with regards to money and saving smile

duckson

783 posts

146 months

Wednesday 3rd March
quotequote all
With a long term (5+ years view, preferably higher) something like the Vanguard Lifestrategy is or can be low risk, low fees and will likely return more than a savings account.
Also consider the Intelligent Money thread (sticky at top) as they do similar products and provide other financial help for no cost.

Zero risk you are looking at premium bonds or the usual savings accounts, 0.5% I guess for instant access.

Comacchio

1,106 posts

145 months

Wednesday 3rd March
quotequote all
I've recently started a stocks & shares ISA with Vanguard investing an initial £500 plus a regular investment of £250 pcm into:

https://www.vanguardinvestor.co.uk/investments/van...

My intention is to keep this going for 25 years at which point I'll be 55 with hopefully my mortgage paid off - I'll then start to draw down from the S&S ISA to bridge the gap between 55 and 68 (Likely this will go up to 70 by the time i reach state pension age - my DB pension is linked to state pension age but can be accessed earlier at a 5% per year reduction) as I'd like to retire early. I've also got a S&S LISA (With AJ Bell) that I contribute £150 pcm into, with the intention to access this at age 60.

If you're hoping to leave the money for a long period of time (10-20 years) doing something similar might work out. Worth noting that if you do need to access it in an emergency you're at the mercy of the markets - could be down by a large margin if you're unlucky.

Mr Pointy

7,765 posts

123 months

Wednesday 3rd March
quotequote all
A S&S ISA is a great idea but if you also need to be thinking about pensions as well; maybe split the money every month. Set up a DD so you don't have to make the transfer every month & in the months you have a bit extra top up the contributions manually. Look into Lifetime ISAs as well if buying a house might be a factor in the future.

hyphen

19,553 posts

54 months

Wednesday 3rd March
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What's your housing situation? You say you are debt free, so are rrnting, mortgage free or living at home and putting earphones in when your parents make love.

Comacchio

1,106 posts

145 months

Wednesday 3rd March
quotequote all
hyphen said:
What's your housing situation? You say you are debt free, so are rrnting, mortgage free or living at home and putting earphones in when your parents make love.
Lots don't class a mortgage as a debt. I class myself as in debt if I have money on my CC or a personal loan.

sbarclay62

Original Poster:

271 posts

21 months

Wednesday 3rd March
quotequote all
duckson said:
With a long term (5+ years view, preferably higher) something like the Vanguard Lifestrategy is or can be low risk, low fees and will likely return more than a savings account.
Also consider the Intelligent Money thread (sticky at top) as they do similar products and provide other financial help for no cost.

Zero risk you are looking at premium bonds or the usual savings accounts, 0.5% I guess for instant access.
Comacchio said:
I've recently started a stocks & shares ISA with Vanguard investing an initial £500 plus a regular investment of £250 pcm into:

https://www.vanguardinvestor.co.uk/investments/van...

My intention is to keep this going for 25 years at which point I'll be 55 with hopefully my mortgage paid off - I'll then start to draw down from the S&S ISA to bridge the gap between 55 and 68 (Likely this will go up to 70 by the time i reach state pension age - my DB pension is linked to state pension age but can be accessed earlier at a 5% per year reduction) as I'd like to retire early. I've also got a S&S LISA (With AJ Bell) that I contribute £150 pcm into, with the intention to access this at age 60.

If you're hoping to leave the money for a long period of time (10-20 years) doing something similar might work out. Worth noting that if you do need to access it in an emergency you're at the mercy of the markets - could be down by a large margin if you're unlucky.
I've seen Vanguard mentioned lots on the finance and investment forums etc. Checked them out and being drawn towards LifeStrategy® 60% Equity Fund. Could maybe play it safe and opt for the 40% fund but i'm young enough (thirties) and do enjoy a wee gamble it has to be said.


Mr Pointy said:
A S&S ISA is a great idea but if you also need to be thinking about pensions as well; maybe split the money every month. Set up a DD so you don't have to make the transfer every month & in the months you have a bit extra top up the contributions manually. Look into Lifetime ISAs as well if buying a house might be a factor in the future.
Pension is surprisingly ok. Had a decent career before this that had good matched pension contributions. Still paying into one just now aswell.


Comacchio said:
Lots don't class a mortgage as a debt. I class myself as in debt if I have money on my CC or a personal loan.
I'm in that boat. A home is a need so not really classing that as debt to be honest. The mortgage is pretty cheap and it will be cleared off well before retirement so happy with that. When I said debt-free i meant from "wants" i.e storecards, credit cards, car finance, loans etc.


Thanks everyone for your replies.

Mr Pointy

7,765 posts

123 months

Wednesday 3rd March
quotequote all
sbarclay62 said:
I've seen Vanguard mentioned lots on the finance and investment forums etc. Checked them out and being drawn towards LifeStrategy® 60% Equity Fund. Could maybe play it safe and opt for the 40% fund but i'm young enough (thirties) and do enjoy a wee gamble it has to be said.
At your age I'd go 80% at least. Have a read up about the fund investment aims as the Lifestrategy funds are quite UK biased, which is great if we're doing well but misses out on gains in the US & other markets. Diversity is always a good thing so think about some of the more global offerings like the VWRL fund. Fundsmith is worth looking at too.

leef44

2,156 posts

117 months

Wednesday 3rd March
quotequote all
If there is still some tax advantage to gain then I would put some in a SIPP (depends on your annual pension allowance remaining).

You are looking for flexible access so maybe 50:50 in pension and ISA.

PH seem quite keen on a few sites: Vanguard, Hargreaves Lansdown and IntelligentMoney (the lead thread in Finance Section). It's worth having a look at the first post in that thread.

At your age I would go all in 100% Equity for pension and 80% for ISA but that's just me. It depends how comfortable you feel with these things.

For SIPP or ISA, the total costs is quite similar between Vanguard and HL. IM is a bit more expensive but there is some human interaction/intervention and it's quite fun following the thread biggrin

VR99

704 posts

27 months

Thursday 4th March
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leef44 said:
At your age I would go all in 100% Equity for pension and 80% for ISA but that's just me. It depends how comfortable you feel with these things.
+1 to the 100% Equities but also agree it's not for everyone so if you are comfortable with 60/80% then so be it.
I use Vanguard for my S&SISA and AJ bell for the LISA...both 100% equities albeit one in a fund and the other in an etf.

Claude455

145 posts

110 months

Thursday 4th March
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You say you’ve never had savings before... does that include emergency reserves?

It depends on how prudent you are but some people like to ensure they have easy access to enough cash to cover 3/6/9/12 months of all bills, just in case....

That’s where I’d start before looking at investing in your future, be that higher risk long term funds, additional pension contributions, premium bonds, overpaying your mortgage, or any combination of the above.

There’s no rush to make a quick decision, do plenty of research into not only the options being put forward but why they’re being suggested. Armed with that information you can decide which way you want to go, and everyone is different, choose the option that works for you.

Greshamst

1,429 posts

84 months

Thursday 4th March
quotequote all
Have a look at the r/UKPersonalfinance on Reddit, there’s a really good flowchart on the sidebar that answers the “what do I do now I’ve got some spare money” question.

Personally I’d say you want a low cost index fund/tracker, so echo the above posters, go for vanguard.

The VWRL gives you good global coverage.
I have that along with Lifestrategy 80, and an emerging markets fund.
You’re 30s, so if this money is being locked away for a good while, you could take on the risk associated with a fund that is all equities and no bonds, if it suits your personal risk profile.


TCX

955 posts

19 months

Thursday 4th March
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Comacchio said:
hyphen said:
What's your housing situation? You say you are debt free, so are rrnting, mortgage free or living at home and putting earphones in when your parents make love.
Lots don't class a mortgage as a debt. I class myself as in debt if I have money on my CC or a personal loan.
Mortgage=debt

Douglas Quaid

1,223 posts

49 months

Thursday 4th March
quotequote all
Have you paid off your mortgage?

rigga

6,953 posts

165 months

Thursday 4th March
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Douglas Quaid said:
Have you paid off your mortgage?
Have you read the thread?

Comacchio

1,106 posts

145 months

Thursday 4th March
quotequote all
TCX said:
Mortgage=debt
Mortgage = good debt. Personal loan for a flash car = bad debt.