Time To Start Saving for the Future

Citizen_kane_2

Im 37 and my wife is 31. With house prices so high we put all our spare money into a cash ISA in my name and one in my wifes name so we can have a decent deposit. We save about £1400 per month into this.
Im a contractor and my wife is permanent

We seem to have become a little too concerned with the house deposit but this is because we dont want to stay in rented too long as will be starting a family soon.

I know we should be saving for the future but we dont know where to start. We are both very careful with our money and don't spend it on things we don't need.
Neither of our jobs offer a pension scheme so we are on our own.
Can anyone tell us where to start? I did speak to an advisor years ago but he suggested a stocks and shares ISA.

Thanks for any help

Linton

£1400 per month is more than your joint cash ISA limits so you could use the cash beyond those limits to start long term S&S ISAs which can be held with an online broker. At 37 you certainly need to be saving for your retirement if you dont want to live what could be the final third of your life in poverty.

As to what to invest in.. here you need to either educate yourself or pay for advice from an IFA.

BLB53

Being self employed, you really need to think seriously about a pension sooner rather than later - possibly a sipp if you feel confident about taking charge of investing the money. For basic rate tax payers, for every £80 you put in, the taxman will add a further £20.

DIY is not so difficult - main thing is low costs imo.

atush

You do need to save for your future, and a pension is one way to do it (alongside of cash and S&S ISas). It has advantages over Isas in that attracts tax relief so is immediately worht more than you pay in, and your employers Will have to pay into one for you soon (by the end of 2016). It is also not taken into acct if you should fall on hard times and be on benefits. for a time (unlike other savings). But you cannot touch it til 55, so other savings are essential.

So with 1400 a month, I think you can both afford to put in 100 at least each. Not enough really, but hopefully once you have your deposit you can put more savings into it.

CLAPTON

I think you are right to put priority on the house deposit
how much have you saved
how much do you earn
where abouts do you live

bigfreddiel

Citizen_kane wrote: »

Im 37 and my wife is 31.

rule of thumb - half your age as a % of your salary is what you should be paying into your pension - so that would be 19% and 16% respectively

the rest into isa's - cash one till you have 6 months salary then the rest into s&s isa

hope that helps

fj

CLAPTON

bigfreddiel wrote: »

rule of thumb - half your age as a % of your salary is what you should be paying into your pension - so that would be 19% and 16% respectively

the rest into isa's - cash one till you have 6 months salary then the rest into s&s isa

hope that helps

fj

of course, rules of thumb are for people who don't understand the principles of the subject matter and so only apply in standard average situations

xylophone

Don't forget that you will need an emergency fund, especially when you are householders, so you will need to budget for this.

The cash ISA limit goes up to £5640 per person from 6 April.

http://www.cavendishonline.co.uk/pensions/pension-guidance/types-of-pensions/
http://www.lovemoney.com/news/savings-investments-pensions/pensions/14667/new-top-pension-for-retirement-savers
The above might be of interest.

dunstonh

rule of thumb - half your age as a % of your salary is what you should be paying into your pension - so that would be 19% and 16% respectively

Although the OP is self employed and that means he is going to get a lower state pension. So, his contributions will likely have to be a bit higher to compensate.

Its a good guide to get you thinking of the ballpark figure but I wouldnt rely on it for real planning.

atush

The important thing is to get started.