Very grateful for advise

rockingdane

I am a 45 year old dentist working in the NHS in the north. I have 2 young boys. I am enrolled in the NHS pension and have around 30,000 in a cash isa. I pay around 12,000 pounds/ annum into the NHS pension. I earn around 58,000/ year. I don't have a clue about investing. I have read a bit but there is so much data on stuff like vanguard, smithfunds that my brains get clouded . I own a house, bought it and have paid 85% of the mortgage. I humbly request some guidance. I am concerned about the future as ours is a very stressful profession and our careers can end any moment..so lots of insecurity among us...
thanks
Dane

bigadaj

So is your net pay then £46k, if so and at all possible then paying some money into a personal pension or sipp would be worthwhile, as the government would be laying nearly half of this (for around £4K anyway).

Nhs pension is one of the best available so keep going with that.

No pont having money in a cash sea currently, you can earn far more through high interest savings accounts, just look at the main board and search the forums on here or use bankaccountsavings.co.uk though that website may not be fully up to date.

Alternatively you can transfer the isa into a stocks and shares isa, though this needs some knowledge and research.

Do you have other cash savings for example?

Depending on the rate of your mortgage then many people would recommend not overpaying, which is what you may have done, as you can get better returns elsewhere, however owning your own house is a valuable bonus for some people also.

If you have concerns about future security then looking into additional insurance cover may be worthwhile.

Al.

rockingdane wrote: »

I am a 45 year old dentist working in the NHS in the north. I have 2 young boys. I am enrolled in the NHS pension and have around 30,000 in a cash isa. I pay around 12,000 pounds/ annum into the NHS pension. I earn around 58,000/ year. I don't have a clue about investing. I have read a bit but there is so much data on stuff like vanguard, smithfunds that my brains get clouded . I own a house, bought it and have paid 85% of the mortgage. I humbly request some guidance. I am concerned about the future as ours is a very stressful profession and our careers can end any moment..so lots of insecurity among us...
thanks
Dane

Dane,

Two of my clients are (military) dentists, they say that a dentist's eyesight goes. First thing then, have you got decent protection in the event you lose your income stream?

Forget about what you should do; instead, think about what you want. Extrapolate from that. That'll give you the big picture about what you should do now. From that, you can pick out the fine detail.

xylophone

You could regard the cash as your emergency fund - at the moment, even as a higher rate tax payer you could probably do better in terms of interest in high interest current accounts.

Having built up this cash reserve you might consider a stocks and shares ISA for savings from now on?

http://forums.moneysavingexpert.com/showthread.php?p=69222728&highlight=#post69222728 see post 18.

george4064

Take a look at opening a stocks & shares ISA, into a Vanguard LifeStrategy fund.

IronWolf

Sounds like you are doing the right things. You may want to consider getting some income insurance in case the worst does happen and you have enough of a cash cushion that you can consider putting your monthly savings into either a SIPP or stocks ISA. A global tracker fund would be cheap and if you feed in an amount each month then you don't need to worry too much about if the market drops in the sort term.

Of course only consider investments if you are prepared to be down significant amounts at certain points in time without panicking and selling, as market crashes do happen

rockingdane

Thanks for your replies.....My pension accumulated isnt v high, around 8,000/ annum at the age of 65. Whatever I am contributing now in the pension will go into a nhs pension pot tied with the state pension age...67. I have some cash, around 30,000 savings for rainy day and 20,000 spare cash for a possible investment. But I am cautious as 2 of my colleagues had to quit working in their early 50's due to sudden poor health, due to work related stress....
To be frank when I saw tesco, glencore, morrison shares drop, I thought of investing but then realised I have no clue and would dig myself into a hole. Buy to let, I am not sure....my partner does not work and looks after the kids...
I ll look into vanguard...any more advise would be welcome...
Dane

atush

Investing doesnt just mean single shares. It is better to look at Funds or investment trusts. Which hold the shares of dozens or more companies, so if tesco tanks, the rest may not so your fund price doesnt take a large hit?

so you need to get read up on investing so read blogs like Moneyvator or read books like Tim Hales'.

Understand the different asset classes, and why diversification between these is safer, plus diversifying into global markets over just UK only is a good idea.

And Vanguard is a good place to start for your S&S isa.

And do get some more cash into a Sipp or PP as you can access this from age 55 in case you retire early. If you invest just what your income is over the HRT threshold, every 100 into your pension is only going to cost you 60.

AlanP_2

Consider opening a personal pension for your non-earning partner as well. You can pay in £2880 a year which HMRC tops up to £3600.

Would be a reasonable size pot in 10-20 years time that could then be taken at 0% income tax if it is handled correctly. 25% tax free lump sum and the offset the income withdrawn against their personal tax allowance.

If everything is in your name it all goes against your tax allowance so if they have no income (or low income) expectations in retirement then that tax reduction benefit is lost. Once State Pension starts for them the income taken out would need to be reduced to keep everything below allowance level.

Has the added benefit of providing a degree of independent financial security for them to supplement any reduced spouse / dependent pension paid out by NHS scheme if you were to die before them.

colsten

atush wrote: »

so you need to get read up on investing so read blogs like [STRIKE]Moneyvator[/STRIKE] monevator.com

no 'y' in monevator. Excellent read though.

bottleandahalf

AlanP wrote: »

Consider opening a personal pension for your non-earning partner as well. You can pay in £2880 a year which HMRC tops up to £3600.

Would be a reasonable size pot in 10-20 years time that could then be taken at 0% income tax if it is handled correctly. 25% tax free lump sum and the offset the income withdrawn against their personal tax allowance.

If everything is in your name it all goes against your tax allowance so if they have no income (or low income) expectations in retirement then that tax reduction benefit is lost. Once State Pension starts for them the income taken out would need to be reduced to keep everything below allowance level.

Has the added benefit of providing a degree of independent financial security for them to supplement any reduced spouse / dependent pension paid out by NHS scheme if you were to die before them.

Does this mean that the other 75% won't be taxed if under the personal allowance for the year. £10,600 per year, currently for example.