What to do with money?

Zippeh

I am after some advice about what I should do with some extra money I have. This money amounts to about £10000.

1. Pay off a lump of mortgage? (89k outstanding at 3.15%)
2. Put into an ISA - cash or stocks (already have £20000 in an ISA)
3. Put into SIPP (already have £10000 in there)
4. Pay off car loan (3yrs remaining, £7950 settlement figure)
5. Leave in current account earning 3%.

I realise the main advice generally is to pay off debts early, but then again, I don't want to miss out on my ISA allowance for the year.


Any general advice out there?

EdGasket

I'd pay off debts first starting with whichever one is charging the most interest.
Don't worry about ISA limits as you can now invest over £15K every tax year.

gkerr4

i'd settle the car loan - if it is an older one, it could be quite a high rate.

then worry about what to do with the remaining.

(and then i'd add that to my ISA investment pot)

atush

Is that settlement figure for the car loan incl any penalties? if so how much? What is the monthly payment?

Your pension and savings look a little low, but the car loan is probably high so i'd pay that off, and keep the rest as emergency savings at 3%.

Then open a regular saver for the amt the car loan was, and sock that into savings earmarked to pay for the next car w/o finance?

Is you Isa a S&S isa?

Zippeh

atush wrote: »

Is that settlement figure for the car loan incl any penalties? if so how much? What is the monthly payment?

Your pension and savings look a little low, but the car loan is probably high so i'd pay that off, and keep the rest as emergency savings at 3%.

Then open a regular saver for the amt the car loan was, and sock that into savings earmarked to pay for the next car w/o finance?

Is you Isa a S&S isa?

The settlement figure is what needs to be paid to clear it. If I let it run, the outstanding amount is about £8700 (haven't got the paperwork with me).

My ISA was fixed for 2 years, but that is maturing this April. It is a cash ISA. I'm willing to consider moving it to a S&S when it matures.

I currently put in £200 a month into my SIPP and also have 10 years local government pension behind me and also an investment property which I own 50% of.

I like the idea of siphoning money off to one side to pay for a car outright, but aren't I better off leaving the money in my current to get more interest?

I guess it does make sense to clear the car loan first. The mortgage is affordable at present, and as long as I don't start spending the monthly payment for the car loan that I'd be saving, then I'd be better off in the long run.

gkerr4

Zippeh wrote: »

The settlement figure is what needs to be paid to clear it. If I let it run, the outstanding amount is about £8700 (haven't got the paperwork with me).

My ISA was fixed for 2 years, but that is maturing this April. It is a cash ISA. I'm willing to consider moving it to a S&S when it matures.

I currently put in £200 a month into my SIPP and also have 10 years local government pension behind me and also an investment property which I own 50% of.

I like the idea of siphoning money off to one side to pay for a car outright, but aren't I better off leaving the money in my current to get more interest?

I guess it does make sense to clear the car loan first. The mortgage is affordable at present, and as long as I don't start spending the monthly payment for the car loan that I'd be saving, then I'd be better off in the long run.

There's saving to be made by paying off the car then - do you know what rate the loan is at? - current 'best' rates are around 3.8-3.9% - if its much higher then consider paying off.

Id also pay into a regular account as suggested for the amount you are now 'not' paying a a loan repayment.

i wouldn't rule out financing a car in the future. Ive bought a few cars outright and while its nice, i leaves a dent in monies that you could have used elsewhere.

Zippeh

gkerr4 wrote: »

There's saving to be made by paying off the car then - do you know what rate the loan is at? - current 'best' rates are around 3.8-3.9% - if its much higher then consider paying off.

Id also pay into a regular account as suggested for the amount you are now 'not' paying a a loan repayment.

i wouldn't rule out financing a car in the future. Ive bought a few cars outright and while its nice, i leaves a dent in monies that you could have used elsewhere.

It's 7.6%. I made a mistake in listening to the car salesman when buying it. Won't make that mistake again!

What's the benefit of paying into a regular savings account before filling up my first £20000 of a 123 account which pays 3% compared to the derisory interest rates on savings accounts?

The only benefit of savings accounts I can see is using up my ISA allowance (or as much as possible a year) to ensure if interest rates ever do pick up that I can benefit from the tax free savings in the future.

gkerr4

Zippeh wrote: »

It's 7.6%. I made a mistake in listening to the car salesman when buying it. Won't make that mistake again!

What's the benefit of paying into a regular savings account before filling up my first £20000 of a 123 account which pays 3% compared to the derisory interest rates on savings accounts?

The only benefit of savings accounts I can see is using up my ISA allowance (or as much as possible a year) to ensure if interest rates ever do pick up that I can benefit from the tax free savings in the future.

sorry - yes - do the 1-2-3 account thing. I have a couple of those paying 3% its very good - if you can fill the £20k its worth £40 a month .

You have highlighted the benefit of the ISA allowance - its good practice, i would consider, but lower rates. Perhaps if you are an upper rate tax payer then the 1-2-3 is an added pain to declare the interest though?

atush

Well I thought you'd be putting the rest of the money in the current acct at 3%, and my regular saver pays 6%. Remember, this is money each month not a lump sum to invest today.

when the year is up, put it in the current acct, rinse and repeat.

jimjames

Zippeh wrote: »

It's 7.6%. I made a mistake in listening to the car salesman when buying it. Won't make that mistake again!

What's the benefit of paying into a regular savings account before filling up my first £20000 of a 123 account which pays 3% compared to the derisory interest rates on savings accounts?

The only benefit of savings accounts I can see is using up my ISA allowance (or as much as possible a year) to ensure if interest rates ever do pick up that I can benefit from the tax free savings in the future.

Regular savers pay 6% so double what you get on 123 account.

Worth doing then move into 123 at end of the year.

But I'd also look at s&s ISAs too.

Zippeh

jimjames wrote: »

Regular savers pay 6% so double what you get on 123 account.

Worth doing then move into 123 at end of the year.

But I'd also look at s&s ISAs too.

Where are these 6% accounts? Cant find any that good!