New Job-Pay Rise-What To Do With Cash

michmar72

Hi

Got a new job, yippee and my pay increase will give me a extra £167 net a month, what would you with the extra?

1)I have had no pension for the past 10 years as current company didn't have a scheme, so if there is a company pension put it in there? ( I have 10 years worth from previous jobs)?

2)Save it I save £300 a month at the moment, plus £40 in a AXA cash builder scheme?

3)Pay more of the mortgage, our mortgage was over 10 years but changed it back to over 25 years when times got tough, I could now pay the extra again?

4)Something else??

I can manage on what I already get, so don't need to spend it, I want to use it wisely.

Thanks in advance.

kidmugsy

(1) is good if the employer's contribution is handsome
(3) is good if your loan is expensive. What's the interest rate?

More generally, what do you fear? I'm worried about a spell of severe inflation, so I very much like ns&i Index-Linked Savings Certificates. After the first year you can view them as a nearly-instant access account on particularly attractive terms.

michmar72

Hi

Thank you for your quick reply.

I don't have all the pension details yet but will bear that in mind.

Our mortgage is an offset flexible mortgage, I can;t find a statement to tell you the current rate but its 70k and we pay £374 a month.

I think my priority is getting mortgage free.

Cheers

edinburgher

1)I have had no pension for the past 10 years as current company didn't have a scheme, so if there is a company pension put it in there? ( I have 10 years worth from previous jobs)?

Do you mean your previous employer? If your current employer offers a scheme I'd put in whatever's required to get the employer match.

Paying off your mortgage would be great for peace of mind, but you should use the handy calculator over on the mortgage section of MSE to see if it's worthwhile. Find out the exact rate from your provider and plug the details in to see if you'd make more money saving/investing elsewhere.

Should I pay off my mortgage? Guide

I had this conversation with my inlaws recently who were on such a low rate that saving into a rubbishy, 2% interest ISA was actually making them a profit over paying the mortgage

Also (and it might go without saying), make sure that you're paying your cash savings into the best paying ISA you can find to minimise the effects of inflation (or buy some index-linked bonds as suggested above).

Whatever you do though, using this extra money to make life easier (whether you pay off the mortgage faster, take out another pension or save more) is a great choice

michmar72

Hi Edinburger

Thanks for this.

Sorry I mean I have 10 years worth of pension with previous employers pension schemes, but with the job I am just leaving that I had for 10 years ish they had no pension scheme, so I have a huge gap.

The mortgage advice is fab, cheers xx