Saving & investment options now mortgage paid off

southerngirl_2

Hi everyone,

Looking for peoples thoughts and opinions on what I could do to make the most of my financial situation.

I'm 35yrs old, no dependents, no debts apart from my mortgage. Up until now my focus has been on overpaying the mortgage and at the end of this month it will be paid off in full.

I have a NHS pension which I have been paying into for the last two years - I was a bit late starting on the pension front!

I currently have £5000 (emergency fund) in an easy access cash isa.

My salary/earnings fall into the 20% tax band. After all monthly expenses have been paid I should now be left with on average £1500 mth to put towards savings and/or investments.

My thoughts were to put
- £470 mth into cash isa (£5640 allowance over 12mths) 2.75%
- £250 mth (maximum allowed) into regular saver 8%
This leaves me with another £700+ which I'm not sure what to do with. I'm meeting with someone at HSBC next week to discuss stocks & shares ISA. After looking on the HSBC website at savings and investments options I'm now feeling awfully confused.

In my early 20's I did invest in unit trusts for nearly 10yrs. By the time I withdrew the money (put towards house deposit) I felt like I'd just broken even and my money would have been better off in a high interest savings account (rates were better back then!). After this experience it's left me a little unnerved about going down this route/or similar again.

My knowledge of investments options is very limited. I would say I have a low risk attitude (I'm aware though that to get the returns there will be some element of risk) and my gut reaction is to fill up my cash isa and put the rest in savings accounts - however I'm finding the interest I'd be earning isn't even enough to buy a cup of coffee!

I currently have no large financial purchases to make in the future so don't plan to make any withdrawals on this money.

Ultimately I looking to see how I can make my money work most efficiently for me. All thoughts and opinions welcome.

Thanks in advance.

oldvicar

Buy an AP (additional pension) within the NHS scheme. At your age it might cost around £1750 for every extra £250 p.a. of index linked (from now) pension purchased if paid at age 65. Max of £5000 extra pension can be bought. BARGAIN ??

http://www.nhsbsa.nhs.uk/1289.aspx

r192

you may be better of speaking to a IFA , instead of a advisor at the bank as the bank will only offer their products, IFA can look across the board at all the different financial companies and see which product suits you best,

atush

I agree about buying an extra index linked pension as described (give you are late joining- BAD mistake to pay off mtg instead of joining a FS scheme). Congrats ont he mtg, but you would have done better to have joined the pension and taken a few more years to pay off the mtg.

I also agree that while you can visit HSBC, leave w/o signing ANTHING as it will be bead mistake no2. Banks are there to make money for their shareholders, not you. So go to an IFA as said above. If you dont' know of a good one, go to www.unbiased.co.uk and pick a nubmer in your area, call them and pick the 2 you felt best about to visit.

I would in your case get a S&S ISA but i would not be likely to choose an HSBC one. I would choose a DIY approach and get an online platform from someone like (but there are more ) Cavendish online, or Hargreeves Lansdown.

BLB53

In your situation, I would be looking at investing in equities in a S&S isa. I would go for a low cost execution-only online option like sippdeal or interactive and then choose a few low cost trackers or investment trusts like City of London. Be sure to reinvest any dividends to boost your returns.
Lots of good suggestions on www.monevator.com

southerngirl_2

Thanks all for taking the time to reply.

I'm still feeling confused by S&S ISA and pensions so will spend time educating myself better before committing to anything. I'll definitely look to purchase additional pension just need to get my head around it first.

darkpool

atush wrote: »

I also agree that while you can visit HSBC, leave w/o signing ANTHING as it will be bead mistake no2. Banks are there to make money for their shareholders, not you. So go to an IFA as said above.

I agree with what you say about bank advisers being there to make money for shareholders, but do you not think IFAs are there to make money for themselves?

If you accept that bank staff give poor advice because of self interest etc, you really have to accept that IFAs give poor advice as well, as they also have a certain amount of self interest at heart.