Checking my savings plan

Jam_Warrior

New to saving from last year. Just sanity checking my 2013/14 plan to the crowd to check I'm doing the sensible thing.


Currently have:

Modest savings in an ISA which has of course dropped rate like a stone now.

A mortgage rate of 2.5% and freedom to overpay without penalty.

A wife with no ISA of her own.


Plan:

No ISAs that accept transfers are paying higher than the mortgage rate, so set aside 6 month mortgage emergency fund and transfer into best new instant access, transfer available, ISA going (2.3% Cheshire?), use the rest to make a lump sum mortgage over payment.

Get wife to apply for best ISA going. No need for instant access as emergency fund covered above, but don't tie in for more than a year as I optimistically hope things can't be this bad as far as the market goes next year! (Nottingham BS 4.0%?)

Regular savings go into hers. If by some miracle we hit her ISA limit then we can start filling in mine.



Sound like a good plan?

Edit: Ah, I see that I am actually allowed more than one ISA as long as my current year's contributions are all in one place? That's even better then as if we do fill the wife's limit we can still see what's available on the market for me to start some 13/14 contributions, right?

saintalan

Jam_Warrior wrote: »

...
Get wife to apply for best ISA going. No need for instant access as emergency fund covered above, but don't tie in for more than a year as I optimistically hope things can't be this bad as far as the market goes next year! (Nottingham BS 4.0%?)

Regular savings go into hers. I...

The Nottingham (best of the Regular) is supposedly Branch Only, some tried last year and did it by post, so I am trying it as its a bit far for me.

Good Luck

psychic_teabag

You have the option of withdrawing from old ISA and using it as new money for an ISA that doesn't allow transfers. Almost always a very bad idea, but sometimes it's the right thing to do. If you intend withdrawing money from old ISAs anyway, it's an option. It sounds like you don't expect to use up two ISA-allowances-worth this year anyway ?

For regular savings, consider a non-ISA regular saver. Can get 6% taxable from first direct. Could transfer it to an ISA (or use it to pay off mortgage) when it matures in a year, then start over.