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  • FIRST POST
    • MDE
    • By MDE 3rd Jan 18, 12:58 PM
    • 149Posts
    • 73Thanks
    MDE
    Am I making the most of my savings?
    • #1
    • 3rd Jan 18, 12:58 PM
    Am I making the most of my savings? 3rd Jan 18 at 12:58 PM
    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!
Page 1
    • AlanP
    • By AlanP 3rd Jan 18, 1:08 PM
    • 1,052 Posts
    • 752 Thanks
    AlanP
    • #2
    • 3rd Jan 18, 1:08 PM
    • #2
    • 3rd Jan 18, 1:08 PM
    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
    • By MDE 3rd Jan 18, 1:26 PM
    • 149 Posts
    • 73 Thanks
    MDE
    • #3
    • 3rd Jan 18, 1:26 PM
    • #3
    • 3rd Jan 18, 1:26 PM
    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
    • By TheShape 3rd Jan 18, 1:50 PM
    • 1,185 Posts
    • 971 Thanks
    TheShape
    • #4
    • 3rd Jan 18, 1:50 PM
    • #4
    • 3rd Jan 18, 1:50 PM
    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
    • By MDE 3rd Jan 18, 2:15 PM
    • 149 Posts
    • 73 Thanks
    MDE
    • #5
    • 3rd Jan 18, 2:15 PM
    • #5
    • 3rd Jan 18, 2:15 PM
    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!
    • jimjames
    • By jimjames 3rd Jan 18, 2:22 PM
    • 12,341 Posts
    • 10,922 Thanks
    jimjames
    • #6
    • 3rd Jan 18, 2:22 PM
    • #6
    • 3rd Jan 18, 2:22 PM
    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.
    Originally posted by MDE
    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 www.monevator.com
    Remember the saying: if it looks too good to be true it almost certainly is.
    • MDE
    • By MDE 3rd Jan 18, 2:48 PM
    • 149 Posts
    • 73 Thanks
    MDE
    • #7
    • 3rd Jan 18, 2:48 PM
    • #7
    • 3rd Jan 18, 2:48 PM
    Thanks for this. Does anybody have any further advice regarding investments?
    • Kim_13
    • By Kim_13 3rd Jan 18, 6:06 PM
    • 1,682 Posts
    • 1,914 Thanks
    Kim_13
    • #8
    • 3rd Jan 18, 6:06 PM
    • #8
    • 3rd Jan 18, 6:06 PM
    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
    Sealed Pot 11 #520 ~ /£100
    VSP 2018 #9 ~ £0/£180.00
    CCCC 2018 #1 ~ £8.00/£180.00

    I'm a Board Guide on the Savings and Investments , Budgeting and Bank Accounts , Credit Cards and Marriage, Relationships and Families boards which means I volunteer to help get your forum questions answered and keep the forum running smoothly. Please remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this.) Any views are mine and not the official line of MoneySavingExpert.com
    • MDE
    • By MDE 3rd Jan 18, 7:49 PM
    • 149 Posts
    • 73 Thanks
    MDE
    • #9
    • 3rd Jan 18, 7:49 PM
    • #9
    • 3rd Jan 18, 7:49 PM
    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
    • By Kim_13 3rd Jan 18, 9:14 PM
    • 1,682 Posts
    • 1,914 Thanks
    Kim_13
    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
    Sealed Pot 11 #520 ~ /£100
    VSP 2018 #9 ~ £0/£180.00
    CCCC 2018 #1 ~ £8.00/£180.00

    I'm a Board Guide on the Savings and Investments , Budgeting and Bank Accounts , Credit Cards and Marriage, Relationships and Families boards which means I volunteer to help get your forum questions answered and keep the forum running smoothly. Please remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this.) Any views are mine and not the official line of MoneySavingExpert.com
    • ValiantSon
    • By ValiantSon 3rd Jan 18, 11:46 PM
    • 232 Posts
    • 220 Thanks
    ValiantSon
    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.
    Originally posted by MDE
    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).
    • MDE
    • By MDE 4th Jan 18, 6:24 AM
    • 149 Posts
    • 73 Thanks
    MDE
    Thanks. I've certainly considered it but not done anything about it. I will have another look.
    • pip895
    • By pip895 4th Jan 18, 8:48 AM
    • 496 Posts
    • 280 Thanks
    pip895
    I would also recommend looking at starting a S&S isa - pick a multi asset fund like VLS80 and put in from as little as just £25/month. Over a decent time period it will always beat cash deposits.
    • MDE
    • By MDE 4th Jan 18, 12:55 PM
    • 149 Posts
    • 73 Thanks
    MDE
    Thanks. Would it be worth me looking at an S&S Lisa? Nutmeg looks to be a good offering. I understand the penalties info withdrew before I was 60 and would only look to put in money I knew I could be without.
    • ValiantSon
    • By ValiantSon 4th Jan 18, 6:39 PM
    • 232 Posts
    • 220 Thanks
    ValiantSon
    Thanks. Would it be worth me looking at an S&S Lisa? Nutmeg looks to be a good offering. I understand the penalties info withdrew before I was 60 and would only look to put in money I knew I could be without.
    Originally posted by MDE
    It could be. The 25% government bonus is certainly enticing as long as you definitely aren't going to want access to the money until you are 60 (or on buying your first home). I'm not as struck on Nutmeg, however. Their fees seem a bit expensive. "Average costs" are 0.72% for their Fixed Allocation Portfolio. This compares poorly with other platforms where you could expect to pay around 0.5% (or less) investing in multi asset trackers in a regular ISA. The Fully Managed Portfolio is more expensive at an "average cost" of 1.04%. Actively managed funds are more expensive than passive funds, but this still seems quite high.

    Not all platforms offer LISAs, however, so you have less choice than with an ordinary ISA, but of course without the LISA you don't get the free 25% bonus from the government. You might want to have a look at the following, however, who do offer LISAs (none of these are a recommendation, I simply offer them as areas to investigate for a comparison on costs and potential returns):

    The Share Centre - Charges no operating, opening, or dealing fees. You pay the OCF (ongoing management fee) for the funds you are invested in. They only offer three funds and the one that is most suitable to you is a personal matter related to your attitude towards risk, but for a long term investment I would have thought the Adventurous Accumulation Fund was most likely. This does cost 1.82% per annum, so actually more than Nutmeg.

    AJ Bell Youinvest -Charges opening fees. You pay the OCF (ongoing management fee) for the funds you are invested in plus 0.25% platform fee, plus £1.50 per purchase (or sale) of funds (if I were you it is multi asset trackers that I would be considering as they can give you a widely diversified portfolio at low cost). So, if you were to buy into a fund like Vanguard LifeStrategy (20, 40. 60, 80, or 100) - these are well-diversified and low cost multi asset passive trackers - and invest a regular amount each month from your income, then an annual cost would be 0.47% (platform fee 0.25% + fund OCF 0.22%) plus £18. This should work out cheaper than The Share Centre, but is a bit less clear compared to Nutmeg. An additional benefit, in my view, is that you would also have much more flexibility in investments than either of those two offer.

    Hargreaves Lansdown - Charges no opening fees or dealing fees. You pay the OCF (ongoing management fee) for the funds you are invested in plus 0.45% platform fee. So with the above scenario of a Vanguard LifeStrategy fund you would pay 0.67% per annum and no additional charges (platform fee 0.45% + fund OCF 0.22%). This seems to me to be the best option, offering the cheapest charges and the most flexibility of investments. It also seems that they are the only platform who offer the same pricing structure as their normal ISA.

    Bear in mind that the range of available platforms and funds is greater with a regular ISA, so you may want to explore that as an additional option. You can only invest a maximum of £4000 per annum in a LISA, but you can also have an ISA in the same year, in which you can invest up to an additional £16,000 (you have a total allowance of £20,000 in ISAs).

    I hope this is of some help.
    Last edited by ValiantSon; 05-01-2018 at 1:03 AM. Reason: Correcting my inability to add up!
    • MDE
    • By MDE 5th Jan 18, 6:43 PM
    • 149 Posts
    • 73 Thanks
    MDE
    I was lucky enough to be given some money for my birthday yesterday. I just went to pay it in to my monthly saver and got rejected. It seems Nationwide have limited the monthly saver from £500 per month to £250 per month. Are there any other monthly accounts which offer higher payment allowances with 5% interest?
    • YorkshireBoy
    • By YorkshireBoy 5th Jan 18, 6:49 PM
    • 29,693 Posts
    • 17,646 Thanks
    YorkshireBoy
    I was lucky enough to be given some money for my birthday yesterday. I just went to pay it in to my monthly saver and got rejected. It seems Nationwide have limited the monthly saver from £500 per month to £250 per month. Are there any other monthly accounts which offer higher payment allowances with 5% interest?
    Originally posted by MDE
    Santander, HSBC, M&S, and First Direct all offer 5% regular savers. All require a current account for access. However, only First Direct can beat £250 a month.
    • ValiantSon
    • By ValiantSon 5th Jan 18, 7:00 PM
    • 232 Posts
    • 220 Thanks
    ValiantSon
    I was lucky enough to be given some money for my birthday yesterday. I just went to pay it in to my monthly saver and got rejected. It seems Nationwide have limited the monthly saver from £500 per month to £250 per month. Are there any other monthly accounts which offer higher payment allowances with 5% interest?
    Originally posted by MDE
    Nationwide made that change a little while ago. It was a new issue of the account, so you must have reached the maturity date already on the £500 version. If you hadn't reached maturity then you would still be able to deposit £500. So it make sense to withdraw your money from that account and move it into an interest paying current account, e.g. Tesco 3% on £3000 or TSB 3% on £1500.

    Only First Direct are allowing deposits over £250 now. They allow you to pay £300 p/m, which is still better than others. You do need to hold a current account with them, but as Nationwide aren't going to be paying above 1% to you on the FlexDirect account (you must have reached 12 months with that too) then you could switch to First Direct and benefit from the £125 switching bonus (go through the link on MSE) and then open a regular saver with them.

    Keeping the Nationwide accounts will net you a maximum (assuming £2500 in current account and £250 p/m regular saver) of £105.64 (made up of £25 interest on current account and £80.64 from regular saver). Switching to First Direct will net you (assuming £300 p/m regular saver) £221.77. So you will make 109.9% more by switching to First Direct.

    N.B. No direct debits are needed to operate the First Direct account, but you do need to deposit £1000 per month. Of course that deposit doesn't have to stay in the account, so you could transfer £1000 in, have £300 go into your regular saver and the remaining £700 come back out to another current account that you use for your main banking.
    • ColdIron
    • By ColdIron 5th Jan 18, 7:20 PM
    • 3,748 Posts
    • 4,584 Thanks
    ColdIron
    If you open a savings account with them such as the imaginatively named Savings Account and pop a pound in it, First Direct will waive the monthly funding requirement. I believe you can do this at the same time as opening the 1st Account
    • MDE
    • By MDE 5th Jan 18, 7:34 PM
    • 149 Posts
    • 73 Thanks
    MDE
    Hi

    I have had an FD account before so wouldn't get the £125. HSBC look to have a decent offer at the moment? £150 plus additional £50 after 12 months. Any drawbacks?
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