What should be my focus now?

debtfreeian

Hi,

After struggling with cash for a few years I think I've turned a corner and should be concentrating on savings/investments. My question is, if you were me where would you focus your saving efforts? To help you out, here's a bit of background.

1) I'm a higher rate taxpayer earnings in the mid 40k mark. I "usually" get a bonus that can tip this in to 50k but not guaranteed.
2) 18% salary goes into pension. About 20 years away from retirement.
3) Long term investments of approximately 15k.
4) Minimal cash savings. Approx 2k.
5) Mortgage on tracker at 1.79% above base for the next few years.

I guess I'm leaning towards increasing the cash balance.

Beyond that, my wife works part time, below the tax threshold. She does have a tiny pension but I would probably like to do something there if it made sense to do so.

Thanks in advance.

atush

if you have 18% going into pension, it must just bring you out of HRtax? Otherwise i'd say boost pension.

It would be worth increasing your wife's pension, as she will have a full personal allowance just like you. You can put in up to 100% of her salary , or 3600 which ever is higher.

But I agree 2K in cash isn't enough, so boost that too. Fill both of your cash Isas if you can.

debtfreeian

Thanks atush.

Little bit of misinformation. I'm putting 8% salary in, company 10%. That's the max matched pension. I think the cash balance is still the immediate focus though.

AlwaysLearnin

Agree best to have a cash cushion; usually recommended as 3-6 month expenditure. Think cash ISA's, but also have a look at thinks like nationwide flexdirect, santander 123, lloyds vantage etc, as you could get a better rate even after tax, then possibly look to use the ISA allowance before next April if that's what's best for you.

You could then think about what you want longer term and look to increase pension contributions to make the most of the 40% tax, and/or build your ISA investment pot for the medium/longer term.

atush

So, put in as much in pension, as needed, to take you out of HRTax, bonus included. thie wil vary, which you can vary before the end of the tax year.

All else remains the same?