What to do with surplus funds?
Discussion
Nice problem to have, I appreciate.
My partner and I both currently pay into a S&S ISA, Lifetime ISA and both put in a good amount per month into a SIPP in addition to our workplace pensions.
We have a joint Sandander Select account which pays interest up to £20k. We're now over this balance and it's increasing every month by £2-3k - clearly the amount over £20k is not earning anything in terms of interest. We have the usual regular savers, but at a few hundred a month the problem remains and we get the problem of what to do with the lump sum at the end of the term.
Having already maxed out our ISA allowances and pension contributions (not quite as good as it sounds, as I have a final salary workplace scheme and recent salary increases mean that my annual allowance needs to be carefully monitored) I'm not quite sure what to do with the surplus balance.
I don't think we're at the level of needing an IFA, but any pointers would be welcome.
My partner and I both currently pay into a S&S ISA, Lifetime ISA and both put in a good amount per month into a SIPP in addition to our workplace pensions.
We have a joint Sandander Select account which pays interest up to £20k. We're now over this balance and it's increasing every month by £2-3k - clearly the amount over £20k is not earning anything in terms of interest. We have the usual regular savers, but at a few hundred a month the problem remains and we get the problem of what to do with the lump sum at the end of the term.
Having already maxed out our ISA allowances and pension contributions (not quite as good as it sounds, as I have a final salary workplace scheme and recent salary increases mean that my annual allowance needs to be carefully monitored) I'm not quite sure what to do with the surplus balance.
I don't think we're at the level of needing an IFA, but any pointers would be welcome.
jonspectre said:
Nice problem to have, I appreciate.
My partner and I both currently pay into a S&S ISA, Lifetime ISA and both put in a good amount per month into a SIPP in addition to our workplace pensions.
We have a joint Sandander Select account which pays interest up to £20k. We're now over this balance and it's increasing every month by £2-3k - clearly the amount over £20k is not earning anything in terms of interest. We have the usual regular savers, but at a few hundred a month the problem remains and we get the problem of what to do with the lump sum at the end of the term.
Having already maxed out our ISA allowances and pension contributions (not quite as good as it sounds, as I have a final salary workplace scheme and recent salary increases mean that my annual allowance needs to be carefully monitored) I'm not quite sure what to do with the surplus balance.
I don't think we're at the level of needing an IFA, but any pointers would be welcome.
As you're under 40, I'd guess you have a mortgage so pay it off. My partner and I both currently pay into a S&S ISA, Lifetime ISA and both put in a good amount per month into a SIPP in addition to our workplace pensions.
We have a joint Sandander Select account which pays interest up to £20k. We're now over this balance and it's increasing every month by £2-3k - clearly the amount over £20k is not earning anything in terms of interest. We have the usual regular savers, but at a few hundred a month the problem remains and we get the problem of what to do with the lump sum at the end of the term.
Having already maxed out our ISA allowances and pension contributions (not quite as good as it sounds, as I have a final salary workplace scheme and recent salary increases mean that my annual allowance needs to be carefully monitored) I'm not quite sure what to do with the surplus balance.
I don't think we're at the level of needing an IFA, but any pointers would be welcome.
NickCQ said:
Retire / reduce working hours?
Pick up an expensive hobby, i.e boats, horses, hard drugs etc etc?
Thanks. Looking to change up the car for something a little more potentially ruinous in due course... but not quite yet.Pick up an expensive hobby, i.e boats, horses, hard drugs etc etc?
I'm not yet 35 and enjoy my work, so don't really want to change that.
More looking for places to dump the money having exhausted the usual recommendations of SIPP/ISAs.
jonspectre said:
NickCQ said:
Retire / reduce working hours?
Pick up an expensive hobby, i.e boats, horses, hard drugs etc etc?
Thanks. Looking to change up the car for something a little more potentially ruinous in due course... but not quite yet.Pick up an expensive hobby, i.e boats, horses, hard drugs etc etc?
I'm not yet 35 and enjoy my work, so don't really want to change that.
More looking for places to dump the money having exhausted the usual recommendations of SIPP/ISAs.
Otherwise what I do is use the Vanguard direct platform to put savings in excess of SIPP/ISA/Mortgage overpayment directly into low-cost index tracking funds.
Without wishing to sound sanctimonious or 'PH' about it, the other thing I did as my income increased was increase my charitable giving in line... that can easily get forgotten.
Pension fully paid up - check.
ISA fully paid up - check.
No mortgage - check.
You Sir, have won the game.
For low risk, NS&I would be somewhere to start parking the extra for a while.
Property might also be something I would be considering once you have built up a pot big enough to purchase something like a small semi or 2 up 2 down with cash. Any plans for a second home in retirement? That could be something you could look to buy also?
Something you are probably underestimating might be your tax situation in retirement though by the sounds of it.
An IFA is defo worth looking at, although you are going to need to accept its not going to be cheap.
ISA fully paid up - check.
No mortgage - check.
You Sir, have won the game.
For low risk, NS&I would be somewhere to start parking the extra for a while.
Property might also be something I would be considering once you have built up a pot big enough to purchase something like a small semi or 2 up 2 down with cash. Any plans for a second home in retirement? That could be something you could look to buy also?
Something you are probably underestimating might be your tax situation in retirement though by the sounds of it.
An IFA is defo worth looking at, although you are going to need to accept its not going to be cheap.
xeny said:
VCTs.
Also it's perfectly practical to invest in equities outside a pension or ISA wrapper - think about assets to optimise use of CGT allowance vs dividend allowance.
+1 thats what I did.Also it's perfectly practical to invest in equities outside a pension or ISA wrapper - think about assets to optimise use of CGT allowance vs dividend allowance.
VCT give you a nice tax credit.
Also Growth stocks as cap gains is less than marginal tax rates
Also NS and I as its guaranteed for your emergency/rainy day fund.
I assume you have repaid any mortgage? Better that than any NS and I stuff IMO.
After that, there is also EIS funds, Angel Investing etc. Lots of good options for tax credits and so forth. You just need to manage the risks as you enter the risky end of the spectrum. Hence IMO you should retire all debt first.
You're under 35 and struggling to find something to do with spare cash?
f
k me, are you that lacking in imagination? There is a big world out there to enjoy, and plenty of things to splash out on - take your pick from holidays, hobbies, eating out, simply investing more in property or shares....basically do whatever you like with it! Personally I'd spend more on holidays, short breaks and eating out, your interests may differ, but to not know what to do with it.... you need to try harder!
f
k me, are you that lacking in imagination? There is a big world out there to enjoy, and plenty of things to splash out on - take your pick from holidays, hobbies, eating out, simply investing more in property or shares....basically do whatever you like with it! Personally I'd spend more on holidays, short breaks and eating out, your interests may differ, but to not know what to do with it.... you need to try harder! Gassing Station | Finance | Top of Page | What's New | My Stuff