In february i will have £500 pm spare, what should

oysterman

i do with it.
I'm a basic rate tax payer, no mortgage after jan. I pay 7% into my pension, the company pay's 5%. I have the TSB classic account paying 5% & the Santander 123 account. I use one credit card & the balance will be paid off before end of 0% period. I have no other saving's or Isa's. I will be 54 next birthday.

What would you do in my position?
Should i put more into my pension, is 14% the maximum you can do. Go for the isa route or build up the 123 account. I quite fancy a bit of a gamble on shares, probably £50-£100 pm. but where do i start?
Cheers for any replies:T

jimjames

First build up an emergency cash fund. It's unclear whether you already have sufficient - if the 123 is full as well as the TSB then you may find that is enough.
S&S ISA would be worth a look and I wouldn't buy shares for £100 per month, I'd use funds which are much more likely to give better return as they are more diversified.

If you can increase pension though that's probably the best use for some of the money as you get immediate tax relief especially if the company will match increased payments.

HappyMJ

It depends on what your aim is.

If your aim in to increase your retirement income then go for the pension.

If you need access to the money in the next 10 years for a house move or a car then go for the regular savings accounts and current accounts.

Me personally I would not want to have my money locked up in a pension so I'd go for the regular savings account. You will get a much better return on your investment if you increased your pension contributions though. I'm not bothered about that.

You should have an emergency fund too. You said you've got no savings at all. I'd build one up using the money before considering increasing the pension contributions.

Thrugelmir

oysterman wrote: »

quite fancy a bit of a gamble on shares, probably £50-£100 pm. but where do i start?

Why not combine this with increasing your potential retirement income. Investing in shares should be undertaken with a long term view.

Sam_J12

Hi Oysterman,

I think the advice above is all good advice, but I will add my little bit. I think you should get a projection of what your pension is going to be at your planned retirement age from your pension scheme. If you are not happy with this amount, investigate the effect of paying more into it - they should be able to give various projections.

I think putting some money into equities is a good idea. I would strongly recommend reading a bit about investing and try to become confident in a plan. It is important you are knowing what you are doing and why, so you don't panic when markets plunge (which they will at some point) and you sell at the wrong time.

Good luck!

atush

add 50/m into a share dealing acct/isa, and and the rest into a pension. If as said, your emergency cash pot is full.

redpete

HappyMJ wrote: »

Me personally I would not want to have my money locked up in a pension so I'd go for the regular savings account.

For someone in their mid-fifties I wouldn't say their pension is really 'locked up" under the current rules.

oysterman

Thank's for all the replies. I will have to contact my pension provider for more info. Apart from the full amount in the TSB account & a little bit in the 123 account i have no more savings. Food for thought, best i get my thinking cap on.

jimjames

oysterman wrote: »

Thank's for all the replies. I will have to contact my pension provider for more info. Apart from the full amount in the TSB account & a little bit in the 123 account i have no more savings. Food for thought, best i get my thinking cap on.

If you only have "a little bit" in the 123 account then it may not be the best one to use as you pay the fee (£5 soon) and get less interest under £3000. Nationwide pay 5% on their Flexdirect for £2500 for 12 months or Tesco pay 3% with no fees.

Playing_with_Fire_2

At 54, unless you expect large expenses in the next few years, putting it into a pension is a tax-efficient idea.

Look at whether you get a company match if you put in more than the 7% and if you get the national insurance back from salary sacrifice. Check the fees associated with the work pension. It might be worth thinking about a separate pension rather than the work one.

Unless choosing/gambling/researching individual shares will be fun for you, consider using funds instead (a little bit of lots of different shares all bundled together, often with lower costs).