£500 a month to save & invest - best way to split
Discussion
Trying to decided how best to divide c. £500 a month.
Currently paying around 10% pa into a pension.
Thinking maybe overpay mortgage by £150 a month and investing £350 into stocks and shares isa (pick my own via 212).
Could maybe lift the pension by 1% a month too?
Read a lot about pensions and investments being more profitable long term than paying off the mortgage but would like to see that getting chipped away at too.
Currently paying around 10% pa into a pension.
Thinking maybe overpay mortgage by £150 a month and investing £350 into stocks and shares isa (pick my own via 212).
Could maybe lift the pension by 1% a month too?
Read a lot about pensions and investments being more profitable long term than paying off the mortgage but would like to see that getting chipped away at too.
Thanks for advice so far - I am buying EFTs such as S&P 500 and this is probably where the majority of my money will be going.
I’ve picked a few others e.g Vanguard worldwide etc and some more specific / niche ones and copied some pies.
Most of the EFTs and pies are made up of the companies I have bought some shares of - they tend to be large stable companies which I plan to own for years / decades etc. not going for quick trades so hopefully this is a safer policy.
Aiming for dividend payments but with some selected for growth in there too.
Aiming for a diverse spread and only investing a moderate amount which I can afford.
I won’t be engaged or learn anything unless I have a half decent amount invested.
I’ve picked a few others e.g Vanguard worldwide etc and some more specific / niche ones and copied some pies.
Most of the EFTs and pies are made up of the companies I have bought some shares of - they tend to be large stable companies which I plan to own for years / decades etc. not going for quick trades so hopefully this is a safer policy.
Aiming for dividend payments but with some selected for growth in there too.
Aiming for a diverse spread and only investing a moderate amount which I can afford.
I won’t be engaged or learn anything unless I have a half decent amount invested.
mark seeker said:
Wombat3 said:
Global Tracker (Something like VWRL) but look at the fees & decide whether you want an accumulator or dividends.
If you want to do something a bit more speculative then something like a Cyber Security fund (but DYOR)
All in an ISA or a SIPP obvs.& use a cheap platform (212 ./ AJ Bell etc)
Similar thoughts, I would probably split 3 ways between pension, VHVG or VWRP (tracker) and VUAG (SP500). If you can I would get a product with dividends reinvested so you don't need to manually have that admin. Agreed re putting these in a S&S ISA.If you want to do something a bit more speculative then something like a Cyber Security fund (but DYOR)
All in an ISA or a SIPP obvs.& use a cheap platform (212 ./ AJ Bell etc)
Yes this is exactly what my plan is
Cats_pyjamas said:
What is the current interest rate of your mortgage? Having greater liquidity (cash to hand), may be more beneficial than locking it into equity in your house. Or if you need a new car, you can't just pull the cash out of your house, but you could premium bonds or other accounts.
There are many variables, ie are you a higher rate earner. If so you'll be taxed on interest over and above £500, unless it's in some sort of wrapper.
Your pension is probably the most tax efficient way of saving money, however remember you may not be able to access that until later in life.
I do the following:
Circa 2k in an instant access account earning around 4.5%
Around 25k in premium bonds, see it as my rainy day fund/possible lump off the mortgage at a suitable time. I also top this up if I have any left over funds. It maybe not the most efficient in earning, however it mitigates taxable income from the 'interest'.
£400/ month into S&S ISA.
I do also contribute a bit more into my pension.
Sounds good. Did you know the cash held in the account on 212 earns something like 5.2%?There are many variables, ie are you a higher rate earner. If so you'll be taxed on interest over and above £500, unless it's in some sort of wrapper.
Your pension is probably the most tax efficient way of saving money, however remember you may not be able to access that until later in life.
I do the following:
Circa 2k in an instant access account earning around 4.5%
Around 25k in premium bonds, see it as my rainy day fund/possible lump off the mortgage at a suitable time. I also top this up if I have any left over funds. It maybe not the most efficient in earning, however it mitigates taxable income from the 'interest'.
£400/ month into S&S ISA.
I do also contribute a bit more into my pension.
The s&s isa - are you selecting your own shares or paying into a banks isa? I was following some guides on investing in shares etc but generally they are just picking the major companies which make up FTSE 100 or S&P ETFs - nothing wrong with that but it seems the easier option is to just buy into these ready-made portfolios rather than doing it yourself?
Obviously lots of variables and pros/cons but I wonder if that’s what most ppl are doing? Lower risk?
Thanks
Just picking up on this, I have been reading about SIPPS and just wanted to get my head around a few points….
Guide I read said that there will be tax relief so if I put in 80% the govt top up 20%. They said if I’m a higher rate tax payer I can then claim another 20% back through SA so the effective payment by me is only 60%.
- just wondering if the pension I pay in to at work, which is paid into before tax, will already be getting the 40% tax benefit or just the 20% (I don’t currently complete a SA). I.e I’m trying to establish if a SIPP would work better for me from a tax perspective (when compared to the existing mortgage).
- I presume both are much better from a tax point of view than an ISA?
I would still keep my work pension but maybe pay the £150 month into a sipp and ask it’s invested in ETFs and then the remaining £350 into the ISA so it’s readily available.
Thanks
Guide I read said that there will be tax relief so if I put in 80% the govt top up 20%. They said if I’m a higher rate tax payer I can then claim another 20% back through SA so the effective payment by me is only 60%.
- just wondering if the pension I pay in to at work, which is paid into before tax, will already be getting the 40% tax benefit or just the 20% (I don’t currently complete a SA). I.e I’m trying to establish if a SIPP would work better for me from a tax perspective (when compared to the existing mortgage).
- I presume both are much better from a tax point of view than an ISA?
I would still keep my work pension but maybe pay the £150 month into a sipp and ask it’s invested in ETFs and then the remaining £350 into the ISA so it’s readily available.
Thanks
Not putting in life changing amounts, investing in vanguard S&P so well established and low risk, rest going into pension.
I’m not putting cash in for the 5.2% interest, just buying shares via 212 platform so I presume the Bulgarians some are concerned about can’t take those shares once bought.
I’ll crack on and report back in a year to let you know how I’ve got on.
I’m not putting cash in for the 5.2% interest, just buying shares via 212 platform so I presume the Bulgarians some are concerned about can’t take those shares once bought.
I’ll crack on and report back in a year to let you know how I’ve got on.
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