A bit of a late starter

Pesto2606

Hi All,

Just looking for some advice really. I'm 29 y/o currently in rented property almost @ 40K salary mark (not including bonus)

I have been a little careless growing up and got in to a bit of debt but have stayed relatively debt free now for a few years. My focus this last 12 months has been saving for a deposit for a house. (20% hopefully)

However I've always been intrigued by investing and am a complete rookie but I'm concious that I want to make up for lost time and try and secure my future years as much as possible. I need to sort out

1) House Deposit
2) Pension (unable to get the great work package where they add funds)
3) Investing

So my question is this, do I solely focus on saving for the house deposit first and then move on to the next thing and then the next. Or would it be prudent to start to look at these pensions and investing in paralell but potentially take a little longer to save the house deposit?

I guess my parents brought me up to focus on owning bricks and water before doing anything else. Would you agree?

Thanks

ruperts

I think if you backdated your question to almost any point in the last 30 years then concentrating on buying property first would work out better due to rising house prices and the leveraging effect of mortgages.


But that might not be true in the future. Maybe property prices will fall and equities will boom, maybe not.


Personally I'm in a similar situation and am matching my maximum employer pension contribution, investing a relatively small sum in a S&S ISA and the rest (around 60% of my investable income) is being saved towards a deposit including maximum contributions to a H2B ISA.

Futuristic

I'm in a similar position including the salary but a lot younger, right now i'm putting most of my ISA allowance into Stocks and Shares ISA (Cavendish->Fidelity) and feeding the maximum for the HTB ISA from Halifax. As I look to purchase a property in the next <8 or so years rather than much sooner I chose the investment option.

I also have a lot in interest paying bank accounts (50K+), you should look into switching your main bank account to one that pays interest if you haven't done so already! My aim is 40% deposit on a <£350k home.

I'm in a fortunate position to have my employer match my contributions which are put into a BestInvest SIPP (for sake of me not managing this, I put 100% of this into Vanguard LifeStrategy 80%).

Perhaps if I was your age, my main concern would be the house deposit and mortgage repayments once you get your house. I'd probably look into adding a small amount to a pension monthly in your case something like this would work well: https://www.cavendishonline.co.uk/pensions/stakeholder-and-personal-pensions/aviva/

Not too sure on investments may be a small amount into S&S ISA as suggested above perhaps.

Superscrooge

I don't think there are any easy answers. If you are spending a lot on rent and determined that you want to buy a house then I would suggest saving for a house deposit takes priority. Don't forget the Help to Buy ISA

Good tax advantages to starting a pension but don't forget you have no access to the money until you are 55yrs old (or later by the time you reach 55).

If investing in equities it should be for at least five years, otherwise stick to high interest bank accounts.

Pesto2606

thanks for your responses ruperts, Futuristic, Superscrooge all really interesting responses.

I realise there is no one-size fits all answer to this question but it's great to see what other people in similar situations are doing.

To anyone else who reads this feel free to add in what your milestone plans and priorities are

I think I'll start to shift things around a little and see if I can start putting a little towards the pension, I'm already looking in to the HTB ISA as I've been waiting for that for a while.

Final question though, if I open a HBA this year am I able to conintue paying in to throughout next year and set up a S&S ISA after April??

badger09

Pesto2606 wrote: »

thanks for your responses ruperts, Futuristic, Superscrooge all really interesting responses.

I realise there is no one-size fits all answer to this question but it's great to see what other people in similar situations are doing.

To anyone else who reads this feel free to add in what your milestone plans and priorities are

I think I'll start to shift things around a little and see if I can start putting a little towards the pension, I'm already looking in to the HTB ISA as I've been waiting for that for a while.

Final question though, if I open a HBA this year am I able to conintue paying in to throughout next year and set up a S&S ISA after April??

Indeed you can. You can pay into one Cash ISA & one S&S ISA up to the max allowance (£15240 in this tax year) so you could start both if you want to;)

xylophone

2) Pension (unable to get the great work package where they add funds)

Why not?

https://www.gov.uk/workplace-pensions/about-workplace-pensions

What is happening about automatic enrolment?