Savings Advice Please!

bwlv1

Morning folks,

Hope you can help me, I am having leftover a decent chunk of money each month,£350-£500 from my wages. This is where you come in, im a newbie to mse but follow closely so have been reading up on my options. Here is my situation:

Age 22
Cash ISA allowance full for this year
Company Pension Plan (fs 60ths)
Cant make overpayments on mortgage for another 2 years (Well i can but it will simply reduce payment rather than term due to promotional period)
No other debts

My stance is that another pension scheme is not required due to having one already, i would like to just lump it into ISA's but until April thats not an option.

Have looked into stocks and shares ISA's but dont feel 100% confident with them due to lack of my own personal knowledge.

Heres where you guys come in, what do i do ?

Thanks, Ben

psychic_teabag

You could start a regular-saver account or two, dump the money in there, then when they mature in 12 months time, you can pay the proceeds into next year's ISA. If you're a basic-rate tax-payer, you may actually be better off doing this than putting the money straight into the ISA in April since you can get at least 5% gross (so 4% net) from a regular saver, which is more than you can get from most ISAs at the moment.

bwlv1

thanks, lloyds tsb seem to be offering the best deal at the moment, maximum £250 per month into their regular saver will give roughly £80 before tax at the end of the 12 months. will be going for that! any advice for the rest of my left over income?

jimjames

When you say you have a lack of knowledge of share based ISAs is there anything specific you don't understand?

WIth a share based ISA you can invest in unit trust funds or directly into shares. ISA managers such as Hargreaves Lansdown allow you to invest from as little as £50 per month into funds and you can vary or stop your payments at any time. Based on your age stock market investments could be worth considering as you have a long time available for the funds to grow.

You do need to remember that the value of the fund isn't guaranteed and can drop as well as rise but if you are paying monthly, every month the market is lower you will buy more than when it is higher.

I started off with a tracker fund in my first ISA and then moved on to more risky and varied investments as my knowledge grew. One of the cheapest tracker funds at present is the HSBC All Share or FTSE 100 tracker.

Baldur

benwolves wrote: »

thanks, lloyds tsb seem to be offering the best deal at the moment, maximum £250 per month into their regular saver will give roughly £80 before tax at the end of the 12 months. will be going for that! any advice for the rest of my left over income?

Skipton Building Society are offering 5% AER variable on their Regular Saver but permit monthly deposits of £10-£500, rathe than a maximum of £250; Principality are also offering 5% fixed on their Birthday Regular Saver on £25-£500 per month but this account can only be opened in specified branches on specified dates.

bwlv1

thanks baldur! just phoned ltsb and opened a current account ready for the saver, might leave it now and use the skipton instead! EDIT: Just read into both and decided to stick with ltsb due to easier access to my money, should i need it in an emergency.

jimjames, i just didnt feel confident that i would make a decent selection when it came to s&s isa's so tried to avoid it, even after reading into it , i wasnt comfortable. But for £50 per month i may give the HSBC trackers a shot.

psychic_teabag

You could just open both Lloyds and Skipton savers. Lloyds allows only one payment per month (but flexible over amount and timing). Skipton allows several payments per month up to the max. So for the latter, could have a standing order for the minimum, and then top it up if you decide you have spare money at the end of the month.

BTW for both regular savers : you get best results by opening with first deposit at the end of the month (ie now), but arranging for subsequent payments at start of month, rather than on month anniversaries. And with Lloyds, T&C do not forbid a 13th payment. In fact, I think that's also true of Skipton. Might be a little hard-pressed to get the first Lloyds payment in for this month though..? There are threads about this in the main savings forum.

Oh - one final tip - Halifax reward current account gives you £5 a month (net) just for bouncing £1000 in and out, briefly, once a month. Money for nothing ! A perfect place to bounce 1k out and in of your Lloyds current account to get its perks (assuming it's a vantage account).

bwlv1

yep i will make sure i get one in asap and then change the SO to the 1st of the month. Money Saving here i come !
CHeers all:beer:

blueberrypie

Baldur wrote: »

Skipton Building Society are offering 5% AER variable on their Regular Saver but permit monthly deposits of £10-£500, rathe than a maximum of £250; Principality are also offering 5% fixed on their Birthday Regular Saver on £25-£500 per month but this account can only be opened in specified branches on specified dates.

First Direct is offering 8% on deposits up to £300/month (and if you don't add £300 every month, you can top it up in later months).

psychic_teabag

I don't know about Lloyds, but natwest standing orders have been known to be paid early if the due date is at the weekend. Rarely matters, but here it's important that the payment arrives in the correct calendar month. So I tend to play safe and leave it a few days into the month.

bwlv1

Will bear that in mind thankyou psychic. Regular Saver to be set up tomorow, just (after much reading and deliberation!) opened a S&S ISA with Hargreaves and Lansdowne, £50 per month into one of their managed funds (Income and Growth), fees seemed very competitive.