What to do with maturing savings

monty100

Next month a 10 year savings bond will mature, giving us around £28,000. We have 3 PEPs which have fluctuated up and down over the years (at the moment, two are up and one is down below original investment level), and have yet to use this year's ISA cash allowance. Our mortgage has 5 more years to run. We owe about £50,000, 36,000 of which is an endowment which is projected to be around £15,000 short in 5 years time. We can remortgage penalty free this August. Any suggestions as to the best course of action? We could use all the savings to pay off the mortgage, but then we would have to be really disciplined to start 'saving' from the savings we would make (if you see what I mean). What would you do?

ED

bumping this msg, hoping somone can respond to monty100.

Possible partial repayment of mortgage is out of my experience. A tip re ISAs may be to hold fire until a probable Base Rate rise announcement on May 10th. Inflation having risen 0.30% to 3.1 indicates a possible 0.50% interest rate rise, rather than the usual 0.25%.

dunstonh

The fact its a PEP gives an indication of the time scale range. In that period you would expect most cautious to medium/high risk investments within the PEP to have made significant gains. Only some high risk areas you would expect to see in a negative position after all this time.

So, that suggests that the PEP investments are not optimal. That is easily resolved by some fund switching and building a better portfolio.

I would also check they match your risk profile.

monty100

Thanks Ed and Dunstonh

The ISAs are really just being used as a tax-free savings account while we decide what to do with the money.

We have held the PEPs for 10 years now. As you would expect, they have been up and down like yoyo's. We have taken some money out of some of them, and presently one is performing well, one is sluggish, and one has less in it than we put in 10 years ago. I am waiting for that one to return to this level and will take it out. (they are all ethical funds). I think our approach to risk has become more averse - but we also want some growth and that's why we are leaving them for now.

missile

monty100 wrote: »

We owe about £50,000, 36,000 of which is an endowment

Who do you owe the other £14K and at what rate?

If this is CC or a loan I expect it is at a higher rate and I would certainly pay this off first.

If a PEP is worth less than your original investment 10 years ago :eek: You really ought to do something. Almost anything would seem better than waiting for it to pick-up.