Am I doing ok?

busybee14

This is something I've wondered for a while now so thought this would be the best place to ask the question.

I'm 27 and in full time employment earning £35,000 pre-tax. Currently in the bank, I have

- £6,000 in my current account
- £9,600 in a reward saver account
- £17,000 in an ISA
- £9,000 in a fixed bond

My only debt is my student loan (be it large!)

Main outgoings are car fuel, rent (£600/mo), bills and food.

Am I in a good situation?! I have nothing and no-one to compare it to? I don't know whether I have more or less than I should do at this stage of my life.
What would be the 'average' for someone of my age?

Bublin1

You are doing great!
How much do you owe on student loans? Maybe you should start to think about paying it off with your savings so you are debt free.

Oh and you can never have too much money !!!

jimjames

Bublin1 wrote: »

You are doing great!
How much do you owe on student loans? Maybe you should start to think about paying it off with your savings so you are debt free.

Oh and you can never have too much money !!!

As I understand it there is no benefit to paying them off early, it is better to keep them as per the schedule.

If you have some money in savings then you should make the most of it by getting the best rates you can. At the moment that isn't in an ISA and you can get 5% outside one on limited amounts but with large sums in a current account there are much better rates on that money.

I guess some of those funds may be earmarked for house deposit at some point but if you aren't paying into a pension or looking at S&S ISAs then those may be worth looking into for long term savings. With the miracle of compounding, paying in early can be much better than waiting.

busybee14

My student loan is around £30,000. I was always under the impression not to pay it back early too.

I work in the private sector and at present, have no specific pension fund. I have only been in work for 3 years and only now feel I'm in the position to look at starting one.

Interest rates on the bond and ISA are around 2-3%. The savings account is about to drop to 0.5% so that's being moved soon.

A house deposit is the next savings goal, but I'm not in a hurry. I've just had a big bill for car repairs too

somethingcorporate

Start thinking about your pension, you're already late if you've not contributed anything to it. At 27 I had well over £30k in there (coming up to £50k now at 29) and even at contributing 21% of my salary it'll only provide an income around a third my current pay.

It's a big sacrifice made easier the earlier you start. Have you been missing contributions from your employer? this is free money you've not been taking advantage of.

In terms of savings it looks like a healthy amount but if it's all in low interest holdings it'll be losing value over the long term.

Perelandra

jimjames wrote: »

As I understand it there is no benefit to paying them off early, it is better to keep them as per the schedule.

It's not quite as simple as that- some ex-students will be paying a rate (6.3%) at which point it may make sense to pay off the loan rather than to hold savings- if the ex-student can be reasonably confident that they will have sufficient income over their career to actually have to pay the thing back (not all do).


But generally... yes, no need to pay these things off earlier than you have to.

atush

I was thinking you were OK, but w/o a pension fund not so much. Esp as your Isas are in Cash (not S&S isas). With rates as they are i'd put new ISA money in S&S.

As for pension, does your employer offer one and pay into it? If so, how much 'free money' have you thrown away in the last 3 years?

Start a pension now.at 27, you need to put in around 14%. This can include your tax releif and any employers money. If you'd started at 24, it would have been less.

Blackdog

Well done so far but time to consider a pension and stocks and shares ISA as others have said.
For what its worth I think you are way above average for the amount you have saved at your age, keep it up!

PlymouthMaid

As above, I think you are doing well but must start a pension.

DominicH

Personally I wouldn't put it in a pension at this age, as a basic-rate taxpayer, unless you get a nice employer contribution. You can always do that later if you become a higher-rate taxpayer, or closer to retirement to get the lump sum and to max out your personal allowance in retirement. But in your twenties, you'd be locking up your savings for thirty years if you put it in a pension.

DominicH

PeacefulWaters wrote: »

Personally, I think this is an approach for mugs.

May I ask why?