Some guidance on where to begin saving (martins guides confused me)

thomB

HI All

When I say confused me, what I mean is that there are different articles so im not sure which one to follow.

I signed up for a santander 123 account thinking that was the best interest but I started then reading about other accounts offering 7%.

I have a lump sum basically i'm expecting from a share sale and I want to put it somewhere where it can gather interest for me.

Martin says to pay debts then ISA next is that where I should be putting this money? I do pay high rate 40% tax on my income so perhaps a current account is not the best place to put any money?

I intend to save £1000 a month from Janurary so really im not sure what to do.

Kendall80

I use a 123 current account as my main account. 3% interest upto 20k and DD cashback = no brainer.


As for your savings. Paying down high interest debts such as credit cards then splitting amongst the various high interest current accounts would be a good first step IMO. Upto 100k can be deposited in those as shown on other threads.


Then depending on your personal circumstances you can consider pensions (employer and personal ie SIPPs), overpaying on any mortgage you may have and investing in a stocks and shares ISA (if you are okay with risk).


All depends on personal circumstances (CC debt, mortgage etc), attitude to risk and amounts involved though.

thomB

Kendall80 wrote: »

I use a 123 current account as my main account. 3% interest upto 20k and DD cashback = no brainer.


As for your savings. Paying down high interest debts such as credit cards then splitting amongst the various high interest current accounts would be a good first step IMO. Upto 100k can be deposited in those as shown on other threads.


Then depending on your personal circumstances you can consider pensions (employer and personal ie SIPPs), overpaying on any mortgage you may have and investing in a stocks and shares ISA (if you are okay with risk).


All depends on personal circumstances (CC debt, mortgage etc), attitude to risk and amounts involved though.

Thanks Kendall

I only have one credit card and no morg (renting at the moment) so yes might pay that CC off first and then with the remainder keep it in the 123 account. Having said that I do pay 40% tax on my wages, perhaps an ISA would be better for me?

I then plan to save £1000 a month from jan so after I hit 3k in the santander I was considering opening a TSB classic and putting 2K in there. Unless of course the santander pay 3% of £20,000 in which case I guess it is best in there is that right?

After that I'm out of ideas. Are the monthly savings accounts worthwhile as it seems current accounts are what everyone is doing now?

Thanks

colsten

thomB wrote: »

After that I'm out of ideas. Are the monthly savings accounts worthwhile as it seems current accounts are what everyone is doing now?

They certainly are, and the best ones take almost £1,000.

• £300 First Direct 6% AER
• £400 Club Lloyds 4%
• £250 HSBC 4%

Look for the "Best regular savings accounts" thread for others. And read up about dripfeeding in the Regular Savings article.

You can restart all of those after 12 months.

However, main Q is - what are you saving for? When do you need the money? Why not pay same into pension and / or S&S ISA?

Kendall80

The problem with those monthly savers is that you have to be a current account customer with those banks to get those rates. However, the first 2 on Colstens list do have very good current account offerings that are definitely worth considering if you go down that route.

YorkshireBoy

Kendall80 wrote: »

However, the first 2 on Colstens list do have very good current account offerings that are definitely worth considering if you go down that route.

What's good about the FD current account (aside from the initial switching incentive)?

apt

£250 interest and fee free overdraft.

colsten

Hardly a massive benefit to a saver, although the purist could stooze the £250 for a couple of quid a year. Definitely not what I would class a "very good" current account on its own.

Kendall80

YorkshireBoy wrote: »

What's good about the FD current account (aside from the initial switching incentive)?

That plus;


The highly rated customer service.


The associated 6% regular savings account.

thomB

colsten wrote: »

However, main Q is - what are you saving for? When do you need the money? Why not pay same into pension and / or S&S ISA?

I am beginning to save so I can buy a property abroad as I find the house prices unjustifiable here in England (among other reasons). So with that I plan to perhaps rent said property out and eventually retire to said property.

That's the plan anyway things can change of course as more facts and knowledge become clear but it is my incentive to save!

I do get a pension from work and I pay 4% into that from my salary. I am in the higher tax bracket also which I need to consider for savings i suspect.

So far I think I am going to:

• Pay off my one CC
• Put remainder of share cash into the santander 123 account
• Pay in 1000 a month to that account as savings
• When I reach 18000 in there take 15000 out and put it in an ISA leaving 3000 still in Santander

I am thinking I might also drip feed cash into that first direct savings account as I already have their current account (the one you got £100 to switch into).

Does that sound like a plan?

nicknameless

thomB wrote: »

Thanks Kendall

Having said that I do pay 40% tax on my wages, perhaps an ISA would be better for me?

Or a pension to get that 40% back depending on the aims of your saving?