What should I do with 15k (stocks and shares vs cash isa)?

lovepigeon

Hi here is the situation:

I have 2 X previous years cash isas (worth about 7k)
1 X bond (about 3k, cannot move this for 2 years)
about 3k in a savings account (rubbish interest)
+ have just received 4k.
Also hoping to save ~ 4k a year for the next 3 years, so hopefully in 3 years time I will have about 30k in total saved up.

BUT I have 28k of student debt (all SLC)!

I've been meaning to move the old isas to higher interest isas for a little while now and am considering a stocks and shares isa but I am scared of risk and not sure of which provider would be best for this. On the other hand I worry the value of the cash isas is being eroded away by inflation. So what is a sensible savings strategy (ie what % in stock and shares isa vs cash isa). I also saw that virgin money - but probably others also - do a bonds and gilts isa that in terms of risk and return is somewhere between a cash and s+s isa so would this be a good option?
Alternatively I could use this money to pay off some of my student debt but then I think in the long run I'm better off not doing this in case I need the money at a later date (for a house deposit or if have children).

Any advice welcome.

smallfry27

It depends what interest rate you are paying on your debt, and whether this is more than you could earn on your savings.

I suggest a multi-pronged approach. Save a little, pay off your debts a little, invest a little. Don't get into S&S until you fully understand what you are buying, preferably using the DIY brokers instead of paying a lot of management charges. Only invest what you can afford to loose. You can't predict how much it will be worth at the time you hope to use it, and for short term plans (less than 10 years) is not the best option.

If you are worried about inflation, look at National Savings & Investments Indexed Linked Certificates which are linked to RPI, and is only locked up for 3 or 5 years.

P.S. You should always keep an emergency fund on instant access, some say 6 months worth of outgoings, but whatever you are comfortable with.