37yr, Mortgage Free with £170k savings - Advice Appreciated

MrWebDesign

Some really good things to think on - thank you.

We do not receive any benefits at all, my salary with commission each year is between £80-95kpa.

We have a bi-monthly slot available for all employees with our internal Financial Adviser for pensions that I have not seen for years. I plan on Monday to book a session to discuss improving my pension contributions as many have suggested above.

In terms of a stocks/shares ISA, again I'm a little inexperienced here and have always opted for the standard ISA with First Direct. Are there stats on which stocks/shares ISA's perform best, and can I transfer all my current money held in my ISA to another provider with ease and without penalty?

xylophone

I take it that you mean you have a cash isa with FD?

The cash ISA can be transferred to another cash ISA or to a stocks and shares ISA without penalty - you would ask the new provider to
organise the transfer.

With regard to performance, an ISA is just a wrapper- it is the funds/shares etc inside it that perform well or badly.

It is important to make a wise choice of platform - if you want only funds, then Cavendish might suit. http://www.cavendishonline.co.uk/investments/

http://www.thisismoney.co.uk/money/investing/article-1583915/A-guide-cheapest-index-tracker-funds.html might be worth a look.



It would certainly be worthwhile contributing to a pension - see the links in my post above.

Eco_Miser

MrWebDesign wrote: »

can I transfer all my current money held in my ISA to another provider with ease and without penalty?

ISA transfers are without penalty, unless the ISA provider imposes one - which would happen if the ISA is intended to be for a fixed term. Check the T&Cs to be sure.

Many people open a First Direct current account purely to gain access to the First Direct Regular Saver, which pays 6% AER. Are you making use of the regular saver?

kidmugsy

Dear God man, you've been rather foolish. Before the end of the tax year bung enough into a personal pension of some sort to let you avoid higher rate tax in 2014-15. That will also let you claim some sort of dole for the children (depending on your wife's position).

Calculation: from your annual earnings subtract the money you contribute to pensions already. Then subtract the threshold for higher rate income tax. Multiply the answer by 0.8 and contribute it to a pension pronto. Then phone HMRC and tell them the size of your contribution. Get on with it; there's little time left.

If you don't know what to invest it in within the pension, just leave it as cash there while you ponder the matter.


You really need to exploit the 40% tax relief before it gets Ballsed down.

Keep_pedalling

And as well as sorting out your finances, get wills and lasting powers of attorney in place if you have not already done so.

Rollinghills

kidmugsy wrote: »

Before the end of the tax year bung enough into a personal pension of some sort to let you avoid higher rate tax in 2014-15.

Good point, there is not much time left this year. Arranging a review is good but if it can't happen soon find out how you can immediately put money into your pension (this tax year). As suggested above, you can keep it as cash and then consider calmly how that money will be invested.

ColdIron

If you do, give them a ring first, some require consent to do an anti money laundering check if this is your first voluntary contribution, could save you valuable postal tennis time

Flower4156

Calculation: from your annual earnings subtract the money you contribute to pensions already. Then subtract the threshold for higher rate income tax. Multiply the answer by 0.8 and contribute it to a pension pronto. Then phone HMRC and tell them the size of your contribution. Get on with it; there's little time left.

Could you please give a practical example of the calculations

timthebin

Flower4156 wrote: »

Calculation: from your annual earnings subtract the money you contribute to pensions already. Then subtract the threshold for higher rate income tax. Multiply the answer by 0.8 and contribute it to a pension pronto. Then phone HMRC and tell them the size of your contribution. Get on with it; there's little time left.

Yes I'd appreciate that too...

HSVX

Flower4156 wrote: »

Calculation: from your annual earnings subtract the money you contribute to pensions already. Then subtract the threshold for higher rate income tax. Multiply the answer by 0.8 and contribute it to a pension pronto. Then phone HMRC and tell them the size of your contribution. Get on with it; there's little time left.

Could you please give a practical example of the calculations

So for most people, the higher rate of income tax kicks in at approximately £42,000 of earnings.

Say you earn £70,000 and currently contribute £3,000 into your pension.

The poster is saying that you should do the following calculations: £70,000 - £3,000 = £67,000
£67,000 - £42,000 = £25,000
£25,000 x 0.8 = £20,000

Suggesting that you put £20,000 into your pension.
I'm not necessarily condoning this by the way, just showing you an example of the calculation.