Sharesave payout. What to do with it.

We are soon expecting a 5 year maximum sharesave payout. With increases in the share price the shares are likely to be worth circa 35,000 with a potential 6% annual dividend stream (we are not higher rate tax payers).

Now we have had pretty good payouts in the past. Some we won on, selling shares to refit our kitchen but we kept the balance and lost a lot of paper profit in the dotcom fall on the rest. The company also paid no dividends for a while so we know what can happen. We have also seen big gains and are fully aware of the risk we take if we keep them as is.

Our mortgage is now 65k and we overpay by about 500 a month as the endowment is due to pay out only about 35k in 2016.

Due to overpayments we have little in savings - about 3k plus sharesaves and directshares of 375 per month total - but we live within our means, no other debt or card balances, and if we need any unexpected extras call on the mortgage surplus (which we did last year when we built a conservatory for 18k - hence the reason the mortgage is 65k)

What I would like to know is what you would all do with the sharesave payout in our situation and why.

Replies

  • Hello

    I will be in exactly the same position in 1 years time (assuming share price remains at current value) we have planned the following

    1 - Remove/sell shares to the value of our CGT holding each financial year (should shares remain constant, it would therefor take 4 years to remove completely)
    2 - Place these monies into an ISA (2 ISA's , one in my girlfriends and 1 in my name)
    3 - With the remianing shares , you will receive dividends that will reduce by 1/4 each year for the 4 years

    The reason we have decided on this option is that to sell £34k in shares in 1 tax year, would leave us with a CGT bill of £5-6k. The shares would have to take a dramatic plunge to lose this much,and we get the added bonus of £5k dividends over the 4 years.

    We pay in £250 per month into the scheme, and are planning when finishing the scheme, to save this money to pay the mortgage off. We havnt seen £250/month for 4 years and have lived no problems, so seems silly to have the temptation on spending given our goal of being debt free in 4 1/2 years :D
    Proud To Be Dealing With My Debts - 1420 Days To Go!
    LBM: £103,592.98 / Currently £78,500.08 - Down 24.22% / Mortgage: £92,800.00 / Loan: £17,284.21 / Overdraft: £450.09 / C/Card 0%(October 08): £5,601.54 / C/Card 0% (January 09): £1075.22 / Child Care: £137.80
    Share Investments: £51,390.74 / Money Owed From GS: £5,812.61
  • Kez100Kez100 Forumite
    2.2K Posts
    .....Thanks.
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