Am I making the most of my savings?

MDE · 3 January 2018 at 1:58PM

I've been lucky enough to be able to put some money away over the past few years, but as interest rates have fallen and fallen I have always been concerned that I am not making the most of the money in terms of interest earnings.

I have few requirements... I want most of the money to be easily accessible, I want to be able to manage it online as much as possible and I like being able to see it grow... so monthly interest is nice but not essential.

I currently have:

Nationwide Flex personal account. Generally starts at about £2000 at the start of the month and drops to a few hundred at the end of the month as I have spend and moved money to higher interest places.

Nationwide Flexplus Joint account, from which all household bills are paid. We do use the benefits provided with this account.

TSB monthly saver- has a £250 standing order going in to it each month.

TSB Classic Plus- Balance maintained at £1500 to maximise interest. 2 direct debits go out each month and a standing order in to and out from Nationwide to fulfil all requirements.

Nationwide Flex Monthly Saver with £500 standing order going in each month.

Post office Online Saver with £3125 in it, which is used to "dump" any excess money in.

Al Rayan Bank 1 year fixed @ 5%, matures in August.

I have a credit card with £0 balance, a mortgage which I overpay by small amounts each month and a car on PCP @ 0% so no benefit in overpaying this.

Is there any better way I could use my money? I am not averse to investing but don't really understand what to do with this!

AlanP_2 · 3 January 2018 at 2:08PM

First of all investing isn't like saving, typically investments are long term and not meant for "easy access" dipping in and out of.

You haven't said what the total pot is - do you have enough to keep an Emergency Fund in cash (about 3-6 months of livig expenses say) and invest the residual amount?

What are your objectives, timescales and your overall situation as regards pensions for you and your partner?

The reason I ask is that looking at the overall financial situation can lead to a better outcome than picking on just one aspect (savings accounts / rates).

MDE · 3 January 2018 at 2:26PM

Hi, so the total pot saved up at the moment is about 14k. I'm comfortable with this, it's a decent safety buffer if something went really wrong and means that when the car balloon payment is due (September) I can meet it without borrowing to purchase the vehicle or replace with something else (it's Diesel so will see how that one goes...!).

I am a teacher so have a TPS pension which is allegedly very good- i'll tell you in 30+ years. I have 6 months full sick pay and 6 months half sick pay so that'd decent too.

I can keep putting the residual away into various saving accounts as I am at the moment, but wasn't sure if there was something better that i was missing.

Thanks.

TheShape · 3 January 2018 at 2:50PM

As there are two of you, if you've not both had FlexDirect accounts paying 5% before, you could each have a FlexDirect account and a joint FlexDirect account allowing you to save £7500 for the next year at 5%. You could also have a Flexclusive Regular Saver each if you currently only have one.

MDE · 3 January 2018 at 3:15PM

Thanks for this. I have already had the nationwide flex @ 5% for a year which has now morphed to the standard flexaccount. Sadly my partner isn't too into switching accounts and happily leaves money with Santander in an ISA at less than 1%. I have tried to convince her of the error of her ways but it's like pulling teeth! :money::j:money:

jimjames · 3 January 2018 at 3:22PM

MDE wrote: »

I can keep putting the residual away into various saving accounts as I am at the moment, but wasn't sure if there was something better that i was missing.

Thanks.

Yes there is something you are missing once you have an emergency fund in place and that's investments. As above they aren't intended to be for dipping in and out of - but in the main they are easy access if needed - it's just that the value might be lower when you wanted to access if it was an emergency. Adding money monthly means you can buy through thick and thin - if the market drops you get more for your money.
A good place to read up more is https://www.monevator.com

MDE · 3 January 2018 at 3:48PM

Thanks for this. Does anybody have any further advice regarding investments?

Kim_13 · 3 January 2018 at 7:06PM

The TSB monthly saver can be beaten - Lloyds, BOS and Halifax increased theirs to 2.5% in December. TSB are still paying the 2% they were paying before the base rate increase.

You might find this Regular Saver thread useful: http://forums.moneysavingexpert.com/showthread.php?t=608697

MDE · 3 January 2018 at 8:49PM

Would it be worth be looking at a Lifetime ISA on a smallish scale? The returns look good and there is money I could invest and leave until I was 60.

If so, what looks best?

Kim_13 · 3 January 2018 at 10:14PM

You might find the MSE guide on lifetime ISA's useful, if you haven't seen it already: https://www.moneysavingexpert.com/savings/lifetime-ISAs

ValiantSon · 4 January 2018 at 12:46AM

MDE wrote: »

I am a teacher so have a TPS pension which is allegedly very good- i'll tell you in 30+ years. I have 6 months full sick pay and 6 months half sick pay so that'd decent too.

Yes, TPS is a good pension - you'll get nothing close to it in the open market. However, in case you haven't already, I'd give serious thought to augmenting your pension through Faster Accrual. The best option is paying the extra contributions to buy at 45ths rather than 57ths. Don't forget, also, that you will get tax relief on these extra contributions. You have to make a nomination every year for this before the new tax year (ideally you should do it in January to ensure everything is processed on time). It is fairly easy to do via MyPension Online (Select "Apply for flexibilities" from the Task List on the right).

Am I making the most of my savings?

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