Savings after Uni

Student_of_£

Hi, I currently have £1,845 in a 3.05% ISA untill Aug '13, (After which I will transfer to the best rate) I am adding to it where I can and when I finish Uni in May '14 I plan to have around £8800-£9100 saved.
I plan to use my savings to live on when I finish uni as I don't want to go on the dole and I forsee a prolonged period of being unemployed.
My question is when I do get a job (let's assume it pays £15,000 net) what do you suggest I do with my savings? I plan to save 40-50% of my salary to make an emergency fund but what should I do when this has been done? Pension? Invest?

Thanks

atush

Well, first off lets hoep you earn more than 15K net as a graduate ;-) My son is in your situation. He just graduated and is woriking earning around 26K.

First, he joined his company pension. then he set up a DD to pay me a small rent. Then he set up 2 regular savers to take his spare cash. he is also now considering some small regular equity savings.

So for you, I would also suggest joining the company pension, and setting up regular savers. When these mature you can put the balance into your isa for the next year and open more regular savers.

Given your level of cash savings is proposed to be around 9K (and growing with the regular savers) also start saving into equities.

Over periods of 10 years or more (sometimes less) they outperform cash deposits and beat inflation (which cash isn't doing at the moment). Consider saving into a S&S isa with a low cost platform, or into an investment trust savings scheme.

Eponym

Salary obviously depends on your field and whether you get a graduate job or a normal job. Engineers and the like can expect £26,000, but I don't know anyone who started their first job after graduating on that sort of money. I myself was much closer to the £15000 you refer to. In any case, it's better to base your estimate on a low figure than a high one - you may do better but probably won't do worse.

I agree with atush in general but it also depends on your needs. You may want to buy a house within a few years of graduating, for example, which will affect what you decide to do. How good your company pension scheme is will also be a factor. (If they don't provide one, or it's rubbish, you'll need to make your own arragements to ensure your putting enough money aside).

In my own case, I joined the pension (Civil Service) straight away and pay my parents rent whilst saving for a house deposit. I also pay £50 pm into a S+S ISA to build up a portfolio. This is a long-term investment. I pay £50 pm on the basis that it's the minimum you can invest and that it means investing £600 over a year, which is about a month's savings so it doesn't push back my house deposit saving by too much.

Dazza86

I graduated around 5 years ago now and my Fiance and I bought our own flat a year ago.

I'd suggest saving to get on the property ladder and saving into a fund or something similar for the long term.

Even with the mortgage and everything else, we're still managing to save around £700 a month on various things. Save what you can, spend what you need.