Advice needed please!!

Gezzy144

I am a Police Officer but leaving the Police Service at the end of this month on the Voluntary Exit Scheme. I will receive a pay out and after tax it will be just over £40,000.
My problem is that I am not very good with figures and finances so I'm trying to work out what is best to do with the money.
My wife and I will use about £9,500 - £10,000 to pay off two loans, meaning we will be £800 a month better off.
I'm not sure what we should do with the remaining amount, which will cover mortgage payments for best part of 18 months.
Should I invest the money in a high interest savings account even if we will be taking about £600 a month out to pay for the mortgage?
Should I use a decent amount of the money to pay off a chunk of the mortgage so we can look to re-mortgage at a decent rate (currently at about 4.7% on a variable mortgage with NRAM)?


Any advice would be appreciated.

Thrugelmir

Reducing the mortgage looks a sound bet.

Eco_Miser

You could put it in 3-8 high interest current accounts. See http://bankaccountsavings.co.uk/

Find out how much you need to pay off your mortgage to get a better rate, and decide if the reduced payment is better than the interest you could earn on the lump sum.

lawriejones1

If second mortgage, but messing around with 4,637 current accounts.

bigadaj

You dont say whether you have another job to go to immediately. If not then it's tempting to keep some cash back rather than pay a big lump from the mortgage as once you pay into the mortgage you may nit be able to draw it back down in future.

mike88

If your mortgage rate of interest is higher than returns from a Bank/Building Society account(s) then common sense dictates that you use the money to reduce your mortgage.

MEM62

How old are you? What is the balance on your mortgage - both in terms of capital and years? Are you planning to work again or retire? What savings / pension provision do you have?

All these considerations will influence the decision you make.

A bit off topic but - I much preferred the organisation when is was the Police Force :-)

Gezzy144

Thanks for the advice everyone. I think I will have to look what interest rates banks are offering for me to invest my lump sum.


I do have a few other jobs in the pipeline, not as much as what I'm currently paid but the lump sum will cover our mortgage until I can hopefully work my way up in whatever new employment I get.

Gezzy144

MEM62 wrote: »

How old are you? What is the balance on your mortgage - both in terms of capital and years? Are you planning to work again or retire? What savings / pension provision do you have?

All these considerations will influence the decision you make.

A bit off topic but - I much preferred the organisation when is was the Police Force :-)

Thanks for the advice MEM62. I'm 34, completed 15 years but have to work another 26! in order to get my full pension so I decided to jump ship with an early pay out. I have £110,000 left on my mortgage that needs to be paid off over the next 26 years. I'm on a variable rate with NRAM and it's currently about 4.2%.


I don't have any savings and what pension I will get is frozen until I'm 60. I've a few jobs lined up, average will be taking home about £1,200 - £1,400 a month until I can hopefully work my way up the pay scales.


I also much preferred the organisation when it was a Police Force but that went a long time ago. I'm guessing you've been gone at least a few years so trust me when I say that the job is no longer recognisable. Glad to be going :-)

MEM62

Gezzy144 wrote: »

I also much preferred the organisation when it was a Police Force but that went a long time ago. I'm guessing you've been gone at least a few years so trust me when I say that the job is no longer recognisable. Glad to be going :-)

A lot of careers are like that. I was never job but have a few mates that are. Good luck in wherever you go from here.