Advice needed, what to do with savings, etc

Frugality_2

Hi,

In this rocky financial squeeze, I've managed to find myself a good job.

My salary is ~30k a year (I live in the north).

Since university, I've had an ISA but not yet been able to afford the full £3,200 annual allowance, so I've only managed to save up nearly £6,000. A good start I know, but with interest rates to abysmal, it's not growing near as lucratively as the 6% I was offered with Abbey one year ago.

Anyway, my new monthly income, after Student Loans, rent for Dad etc is about £1,450.

Now obviously until April I will continue to max out my ISA (not far to go, 2k), but then in April under-50s benefit from the new 5.1k allowance, or £425 p/month if disciplined. I'll do a SO so I pay my 425, but I don't drink, smoke, I only buy general necessities and petrol.

So I should have nearly £600-1000 left over if I am disciplined enough, and I don't really know what to do with it. Perhaps open a savings account, but there aren't many benefits to this as it's taxed. I'd also like to get into S&Shares and use my ISA allowance on that, but really don't know where to start a sound (albeit petty) investment strategy.

Any help greatfully received.

G_M

No one can really tell you definitively what you should do. Best thing is to get an understanding of the options, how different savings or investment markets work, and then decide what's best for you.

Read up Martin's pages, browse through the differen threads on the forum (there are countless similar queries all with different responses to learn from!), or go to the library/Smiths and read the money magazines or borrow a book on investing.
You've lots of time to learn before next April!

CLAPTON

what interest rate are you getting on your ISA?

Frugality_2

CLAPTON,

About 1.5% at the moment with one-year variable rate with Abbey. When I opened it it was 6%.

Baldur

Frugality wrote: »

About 1.5% at the moment with one-year variable rate with Abbey. When I opened it it was 6%.

Transferring it to an ISA provider that accepts transfers and pays a better rate would appear to be a good starting point. (The annual Cash ISA allowance is currently £3,600, rather than £3,200, for under 50s).

bendix

What's wrong with stocks and shares? You're only 30, after all.

Lokolo

bendix wrote: »

What's wrong with stocks and shares? You're only 30, after all.

Tell Stephen Gately that

Frugality_2

I'm confused.

I'm 23.

And I haven't got a clue about S&Shares if anyone can assist me..

...also the best ISA at the moment is only 2% more then what I am getting

bendix

Apologies. I thought you were 30. Even more reason to look at shares then, either in an ISA or by way of pension. Have you started your retirement planning yet?

If you are able to save £425 a month into a cash ISA and the same or more into shares (either through an ISA or a pension fund) at the mere age of 23, you're doing very well and will never ever regret it.

Baldur

Frugality wrote: »

...also the best ISA at the moment is only 2% more then what I am getting

Cash ISAs can be transferred into Stocks & Shares ISAs.....

Sceptic001

Frugality wrote: »

...also the best ISA at the moment is only 2% more then what I am getting

Frugality, if you are getting 1.5% and the best is 2% more then that is a difference of 133% on the return received.

£100 invested for ten years at 1.5% becomes £116
£100 invested for ten years at 3.5% becomes £141

Compound interest is a wonderful thing!