Discussion
Hi all, just after a simple bit of advice. At the moment I find myself saving about 5k/6k a year and I have no idea where to put it.
Its currently in a Santander savings account (about 10k) where I'm getting about 4% interest on the first 4k and bugger all on the rest.
I'm saving this money as just surplus pay so I can't really (hopefully) see my situation getting worse only better.
I don't need a bigger house or anything as wife, kids and I are happy as we are. I just don't want it losing value as inflation continues.
Any advice on where I can put it? I know its not a great deal but it's growing with time so I think I need to put things in order now.
Thanks for the help.
Its currently in a Santander savings account (about 10k) where I'm getting about 4% interest on the first 4k and bugger all on the rest.
I'm saving this money as just surplus pay so I can't really (hopefully) see my situation getting worse only better.
I don't need a bigger house or anything as wife, kids and I are happy as we are. I just don't want it losing value as inflation continues.
Any advice on where I can put it? I know its not a great deal but it's growing with time so I think I need to put things in order now.
Thanks for the help.
My approach.
First think about how much you need as a rainy day fund. 3-6 months of expenses is the usual recommendation. Put this in a high interest savings account or premium bonds if you want.
Then pension provision. The tax savings are particularly good and will give you the best bang for buck bar none particularly if you are a high rate tax payer or crossing into one of the penal marginal tax rate zones (eg loss of child benefit or 30hrs childcare)
Then ISAs - open a vanguard isa and stick it into funds monthly with a long ish term view. (Ie you won’t need to touch it because you have the rainy day find for that) and it’ll likely do better than the savings rate over a long enough time frame.
First think about how much you need as a rainy day fund. 3-6 months of expenses is the usual recommendation. Put this in a high interest savings account or premium bonds if you want.
Then pension provision. The tax savings are particularly good and will give you the best bang for buck bar none particularly if you are a high rate tax payer or crossing into one of the penal marginal tax rate zones (eg loss of child benefit or 30hrs childcare)
Then ISAs - open a vanguard isa and stick it into funds monthly with a long ish term view. (Ie you won’t need to touch it because you have the rainy day find for that) and it’ll likely do better than the savings rate over a long enough time frame.
welshjon81 said:
Hi all, just after a simple bit of advice. At the moment I find myself saving about 5k/6k a year and I have no idea where to put it.
Its currently in a Santander savings account (about 10k) where I'm getting about 4% interest on the first 4k and bugger all on the rest.
I'm saving this money as just surplus pay so I can't really (hopefully) see my situation getting worse only better.
I don't need a bigger house or anything as wife, kids and I are happy as we are. I just don't want it losing value as inflation continues.
Any advice on where I can put it? I know its not a great deal but it's growing with time so I think I need to put things in order now.
Thanks for the help.
I'd be looking at whether paying into a SIPP could be favourable to you, in terms of reducing your taxable pay. Its currently in a Santander savings account (about 10k) where I'm getting about 4% interest on the first 4k and bugger all on the rest.
I'm saving this money as just surplus pay so I can't really (hopefully) see my situation getting worse only better.
I don't need a bigger house or anything as wife, kids and I are happy as we are. I just don't want it losing value as inflation continues.
Any advice on where I can put it? I know its not a great deal but it's growing with time so I think I need to put things in order now.
Thanks for the help.
Quite a few 1-2yr bonds paying around 4% at the moment too, so you could lock some away.
I'd also be buying global passive trackers in a ISA too depending on your tax position.
Can you get involved with a SAYE scheme through your employer?
£500 is the max I can pay in per month where I work, and the "scheme price" is generally set 25% lower than share price.
After 3 (or 5 years) the shares will hopefully have either remained the same value, in which case your 25% up on your investment, or they might have increased by a further 10+%.
Even if they drop below the scheme price, you can take all your money out at the end of the agreement (or part way thru if you wich to cancel it) and get all your capital returned that you've put it.
£500 is the max I can pay in per month where I work, and the "scheme price" is generally set 25% lower than share price.
After 3 (or 5 years) the shares will hopefully have either remained the same value, in which case your 25% up on your investment, or they might have increased by a further 10+%.
Even if they drop below the scheme price, you can take all your money out at the end of the agreement (or part way thru if you wich to cancel it) and get all your capital returned that you've put it.
MattS5 said:
Can you get involved with a SAYE scheme through your employer?
£500 is the max I can pay in per month where I work, and the "scheme price" is generally set 25% lower than share price.
After 3 (or 5 years) the shares will hopefully have either remained the same value, in which case your 25% up on your investment, or they might have increased by a further 10+%.
Even if they drop below the scheme price, you can take all your money out at the end of the agreement (or part way thru if you wich to cancel it) and get all your capital returned that you've put it.
No such scheme where I work. The Mrs is in one at hers though and she has made a bomb over the years, so very much worth doing.£500 is the max I can pay in per month where I work, and the "scheme price" is generally set 25% lower than share price.
After 3 (or 5 years) the shares will hopefully have either remained the same value, in which case your 25% up on your investment, or they might have increased by a further 10+%.
Even if they drop below the scheme price, you can take all your money out at the end of the agreement (or part way thru if you wich to cancel it) and get all your capital returned that you've put it.
I think what Mazinbrum mentioned would work best for me with Raisin. I'm not looking to set the world on fire but a 5% rate would do!
Anyone have something similar going?
Thanks for the advice so far.
Henry Fiddleton said:
Pay off your mortgage if you have one.
Need more information before knowing if this is great or truly terrible advice. (I'll go with terrible in my case)e.g. My mortgage is at 1.29% so if I was to pay £500 per month into my mortgage, it would save me a pretty small amount over the next 10 yrs
But if I paid it into my pension instead, I would immediately get somewhere near half of that back in tax plus would then have the growth on top- the performance of this will almost certainly be better than the mortgage. (in fact, it could drop in value and still beat the mortgage due to the tax saved!
As I can access my pension in less than 10 yrs time, it makes almost no sense to me to pay off my mortgage
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