ISA or Pension

[Deleted User]

Sweetteamum1 wrote: »

We just don't have the spare cash for all this. How do we prioritise which is best :mad:

The best course of action greatly depends on your income, your goals and your debts. There are a number of simple rules that you can follow depending on your situation, if you can provide the following information members here can help you formulate a plan:

1. Do you have any existing savings (if so, how much? £1,000, £10,000?)
2. Do you have any debts (if so, how much? Credit Cards? Mortgage?)
3. How much does your partner earn?
4. Does your partners employer offer a pension and any contribution matching?
5. Do you expect to return to work in future?
6. Do you own your own home (Mortgaged, outright?) or do you rent?

If you can provide those 6 pieces of information it will be much easier to help you understand what you need to prioritise and how you can achieve the best financial future for you and your family.

McKneff

It doesn't sound as if you can afford to do either to be honest.

moxter

With a pension you won't be able to access the money on tap like you would with an ISA. Whether that is a positive or negative is hard to call - negative in that you couldn't get it in an emergency, but perhaps positive in that it wouldn't be a temptation.

suebfg

It's all very well investing if you have enough to meet your current needs. In your position, I would prioritise (1) having some emergency funds held in cash ISAs (2) paying off debt and then a mix of (3) overpaying any mortgage/stocks and shares ISA/pension.

Eco_Miser

I wouldn't use cash ISAs for your emergency cash, but current accounts. Start with the TSB Classic Plus, which pays 5% AER on up to £2000. You can have two, your husband two, and another two jointly between you. That's up to £12,000 you can save, earning nearly £600 before tax (if you keep the whole amount in for a year). Then maybe Lloyds Club @ 4%

Once you have enough to cover emergencies, you can look at pensions (even a person with no income is allowed to make pension contributions, and get the standard tax added to them), and investments.

It sounds as though you (both of you) haven't got much income, so you'll find it hard to save, because savings come from excess income.

Have a look around the forum for help, especially those boards that deal with minimising spending and finding extra sources of income.

p00hsticks

Sweetteamum1 wrote: »

I'm a carer and only get £3107ish per year

Are you getting Carers Allowance and/or Child Benefit ?

This will at least ensure that you get NI credits towards your state pension.

although having a small income may mean that it's difficult to put money aside towards, a pension, the 'advantage' is that you are presumably used to getting by on a small amount and so may not actually need much of an income in retirement. In your individual case, providing you'll have 35 years of NI credits by the time you reach state pension age, your income will pretty much double just from the state pension.

Sweetteamum

citricsquid wrote: »

The best course of action greatly depends on your income, your goals and your debts. There are a number of simple rules that you can follow depending on your situation, if you can provide the following information members here can help you formulate a plan:

1. Do you have any existing savings (if so, how much? £1,000, £10,000?)
2. Do you have any debts (if so, how much? Credit Cards? Mortgage?)
3. How much does your partner earn?
4. Does your partners employer offer a pension and any contribution matching?
5. Do you expect to return to work in future?
6. Do you own your own home (Mortgaged, outright?) or do you rent?

We have £4000 currently, and can start to put £200 pm away.

I don't have debts, husband does. However, it's possibly approximately £24k, then we have the mortgage on top.

DH earns an average wage of £1k per week.

DH is self employed

I will possibly be returning to work. However it greatly depends on how well my children, one child in particular, can cope in adult years.

We have a mortgage, yes.

If you can provide those 6 pieces of information it will be much easier to help you understand what you need to prioritise and how you can achieve the best financial future for you and your family.

Hope that helps.

Sweetteamum

Eco_Miser wrote: »

I wouldn't use cash ISAs for your emergency cash, but current accounts. Start with the TSB Classic Plus, which pays 5% AER on up to £2000. You can have two, your husband two, and another two jointly between you. That's up to £12,000 you can save, earning nearly £600 before tax (if you keep the whole amount in for a year). Then maybe Lloyds Club @ 4%

Once you have enough to cover emergencies, you can look at pensions (even a person with no income is allowed to make pension contributions, and get the standard tax added to them), and investments.

It sounds as though you (both of you) haven't got much income, so you'll find it hard to save, because savings come from excess income.

Have a look around the forum for help, especially those boards that deal with minimising spending and finding extra sources of income.

I have looked at that current account in particular. However, I need to put £500pm in. I would only be able to do this if I used them for the bills. Unless I'm missing something.

Sweetteamum

p00hsticks wrote: »

Are you getting Carers Allowance and/or Child Benefit ?

This will at least ensure that you get NI credits towards your state pension.

although having a small income may mean that it's difficult to put money aside towards, a pension, the 'advantage' is that you are presumably used to getting by on a small amount and so may not actually need much of an income in retirement. In your individual case, providing you'll have 35 years of NI credits by the time you reach state pension age, your income will pretty much double just from the state pension.

Yes, I get CA and child benefit. However, I put the child benefit away each month for the children for when they're older. Tbh that's all that matters to me.

As long as we have enough to pay mortgage if anything happens (with a life insurance policy), then we do realise we won't have a huge amount.

We do have the added benefit of being able to downsize in the future.

Sweetteamum

I really hope the added info will make things more clearer for anyone.