What to do with £300 p/m

Hyp3rion

Hi,

I was wondering what the best thing to do with a spare £300 per month is.
I have been reading a fair bit about SS ISA's on here and other sites but I not reached a very good understanding of this subject and not sure if it is the right thing for me to do. I am looking at a long term investment.

I'm 43, have a final salary pension which I cannot pay AVC's to.
I have a mortgage with 18 years to run which is 145,000 @ 3.99%

Any thoughts are appreciated.

Hyp

poolforever

Maybe a regular saver? First Direct allow £300 per month. You'll make about £90 on top of our savings.

atush

3.99%? How much can you overpay a year w/o penalty?

100 to that might be an idea, with the other 200 into a S&S ISA. I assume you have a cash emergency/slush fund in cash ISAs?

JohnRo

I'm not saying it's the right thing to do but wouldn't something like IP distribution be a better option for the money? Modest income and capital growth over the long term, I know it won't be a white knuckle, hold on to your hat, ride and the returns quite tame by some standards but overall return should beat the mortgage rate quite comfortably.

Hyp3rion

I asked Halifax how much I could overpay and as I am on their SVR they informed me that I can overpay as much as I liked without penalty.

I do have an emergency fund but not in a cash ISA.

redbuzzard

Hyp3rion, if you have a non-working Th3ia at home, that would cover £3600 a year into a pension for her, with £720 left over for beers after the tax top up.

Just a thought, if applicable.

Or a tidy monthly instalment to a S&S ISA for one of you if you haven't that covered. At your age, equity index funds would be my choice - not advice of course.

BaxUk

As you are allowed overpayments on your Mortgage, personally i would use the money to overpay!

You wont see the benefit short term, but long term you will be really doing yourself a favour!

JohnRo

BaxUk wrote: »

You wont see the benefit short term, but long term you will be really doing yourself a favour!

That all depends on whether the extra money used to pay off the mortgage sooner could have been earning a better total return elsewhere doesn't it?

atush

so, overpay by 100 a month.

Think about pension for non working spouse.

Move all cash to ISAs as you pay tax, any cash outside pf isas in the OH name as long as not a tax payer.

Rest of money, after 3-6 months spending in cash ISas, into S&S isas?

Bean123

I'm not in too dissimilar a position to you; others suggested that I should ensure I had an emergency cash fund (in ISA to protect against tax), and then consider splitting your spare cash between overpayments and equities (either S&S ISA or further into pension type provision).

justme111

according to mortgage overpayment calculator if you put it in mortgage you would have cleared it in 12 years instead of 18. I loaf paying interest so that's what I would do.