Help with savings options please

Gizmogiz

Hi everyone,
I consider myself reasonably financially savvy, I'm a qualified accountant and keep a very strict eye on our money but I could do with some advice and was hoping you kind folks can help me.

Me and my husband currently have £5.6k in an instant access savings account with 1st Direct (where I have our current account). We also have £6.2k in ISAs with Santander (taken out last yr). So in total just under £12k.

The instant access account is used for different savings pots for things like car service/tax, insurances, house maintenance, Christmas etc etc. £2.3k of it is about to be spent on our garden so balance going forward should be less than £3.5k and we dip into it when needed.

Our ISA savings are going to gradually dwindle over the next 12 months as we use it to top up my maternity pay (baby no 1 due any day now).

The interest rate on our 1st Direct instant access is only 0.25%, I just like the ease of transfer between our accounts.
Our ISAs have just dropped to 0.50%.

I expect the ISA savings to be used at a rate of between £300-£400 per month and we'll be left with about £1.5k at the end of mat leave.

So any suggestions about what to do with our money at the moment would be great fully received.

Thanks very much for reading!

xylophone

Best wishes for the birth! https://www.gov.uk/junior-individual-savings-accounts/overview

The amount of savings seems rather low for a family where both parents have been working? Does the budget need a closer look? http://www.nhs.uk/conditions/pregnancy-and-baby/pages/maternity-paternity-leave-benefits.aspx#close

With regard to the ISAs, you'll want the best instant access rate you can find? http://www.thecheshire.co.uk/ISAs/ISA-saver/

Have you thought of opening an account with Nationwide?
http://www.nationwide.co.uk/current_account/flexdirect/default.htm?intcmp=Intcmp_1841

Have you sorted out life insurance?

Gizmogiz

Thanks for your reply. I was surprised to read that our savings are on the low side. We have spent a bit on our house that we bought 3 years ago, and also funded our own IVF treatment to make this little miracle so I suppose if we hadn't done that we'd have a lot more savings.

So the suggestion is a new ISA then....I will take a look at the best buy you have suggested.

We aren't going to have enough to invest in a junior ISA while I am on mat leave but thanks for the link!

I've only just opened the 1st Direct accounts to get the incentives for both of us so not really in a position to move again yet.

Life Insurance has been covered since we got our mortgage but I am in the process of revisiting this before baby is born.
Thanks again.

xylophone

We aren't going to have enough to invest in a junior ISA

Remember that other family members/friends etc can contribute.

atush

yes, your savings are low for someone in your situation and perhaps should have been boosted before you left work.

In a house with a mtg, and dependent children, you really should aim to have 6 months spending in emergency cash.

as to your Q, if you are paying tax on your savings, it should be in an ISA unless the rate you get after tax is better than the best instant access isa you can find (even if you are spending the money, an ISA saves on tax).

Perhaps put off doing up your garden until you are earning again after you come off maternity leave? How long do you plan to take off?

I agree you need to look at your budget and see where you can save- have you done all the normal MSE things like getting the best prices on insurance/utilities etc?

do you have pensions?

Gizmogiz

I really thought we had enough savings and am a bit taken aback by the 2 opinions here, but have taken the comments on board.

We have a 3 year old car with 2 more years of warranty so not expecting any massive bills there.
We replaced our boiler last yr, so again wouldn't expect to be paying out lots there.

I am planning on taking a year off and will only receive smp, no additional pay from my employer.

The garden is being done now, we aren't going to delay it for another year but we are doing it as cheaply as possible.

I always shop around for best prices on utilities etc.

We both have good work based pension schemes.

Maybe I should post a SOA somewhere and get some comments on our budget as I always thought we did very well with our budget!

atush

well, if you can shave some off you will at least be able to afford the extra a baby will cost like say nappies. But if you can not go thru your savings as quickly, that will help too.

try the budgeting board. The Debt Free board are more stringent, but you aren't in debt. But are trying to stay in the black so it could be worth a shot.

Gizmogiz

Thanks, I'll spend some time on the budgeting board.