What to do with £1450 a month?

siross

Good afternoon all,

I wonder if you fine knowledgeable people could help me with something.

I have recently had a pay increase at work which means that I'm a few hundred better off per month.

After tax and all necessary outgoings (mortgage, bills etc) I have ~ £1750 spare.

I usually work on the basis of having £75 per week disposable for random bits and bobs.

That leaves me with £1450 a month to save. I want to split this into 2 "pots"

1) Main savings pot - this will be the main lump sum which will be used when we move house (in the next 2-3 years) or any other big expenditure. This shouldn't be touched if possible.

2) Extra savings pot - this is for more frivolous spending. If I want a new phone, bits for the car etc.

My plan was to put £1250 into the main savings account and £200 (along with any leftover from my weekly disposable) into the extra savings account.

Does anyone have any ideas which accounts I should be going for here?

I only have one savings account currently and that's the Santander 123 account. It currently has ~£6.5k in there.

colsten

What are your pension arrangements? Read this from Martin Lewis: http://www.itv.com/thismorning/hot-topics/money-martin-lewis-pensions-explained

Eco_Miser

https://forums.moneysavingexpert.com/discussion/5374614
Start with the highest rates and work your way down.

siross

Eco_Miser wrote: »

https://forums.moneysavingexpert.com/discussion/5374614
Start with the highest rates and work your way down.

Thank you

So that would be:

£300 to FD Regular Savings account (6%)
£250 to M&S Monthly Saver (6%)
£250 to HSBC Regular Saver (6%)
£200 to TSB Monthly Saver (5%) (This can be my "extra savings")
£450 to Nationwide Flexclusive (5%)

What about the lump sum?

£2k to TSB classic plus current account (5%)
£4.5k to Club Lloyds?

LXdaddy

siross wrote: »

Thank you

So that would be:

£300 to FD Regular Savings account (6%)
£250 to M&S Monthly Saver (6%)
£250 to HSBC Regular Saver (6%)
£200 to TSB Monthly Saver (5%) (This can be my "extra savings")
£450 to Nationwide Flexclusive (5%)

What about the lump sum?

£2k to TSB classic plus current account (5%)
£4.5k to Club Lloyds?

Looks pretty good.


One thing to bear in mind is that you need to open quite a few accounts which will take a while to organise so you should put the max that earns interest into the Club Lloyds (£5K). You could also look at using Tesco Current accounts (you can have 2 per person) they will pay 3% on up to £3K without any monthy charges so would be a better bet than your Santander 123.


You need to look carefully at T&C for all the accounts to make sure you can qualify for them - eg the M&S regular saver is only available if you open one of their current accounts and then use the Switching Service to move an existing current account with 2DDs on it. Opening the M&S accounts takes a looooong time.


Another consideration is some of the Monthly savers only pay the headline rate when the account is open for a full 12 months so that will be a consideration if you need to be able to access them at a point during the term.


One other "nice" problem is that if were to you open all the regular saver accounts on the same day and make the maximum regular payments each month then 12 months later you will have £1,450*12=£17,400 plus interest to find a home for. It is better to stagger the opening dates (and therefore maturity dates) so that you have space in your current accounts for the maturing lump sums.


Most of you post is written as "I" or "me" but you use "we" in terms of moving house in a couple of years. If there is a significant other then you should be able to have three of most of the accounts (one each and a joint) so the amount you can have in the highest paying accounts is much more.

siross

LXdaddy wrote: »

Looks pretty good.


One thing to bear in mind is that you need to open quite a few accounts which will take a while to organise so you should put the max that earns interest into the Club Lloyds (£5K). You could also look at using Tesco Current accounts (you can have 2 per person) they will pay 3% on up to £3K without any monthy charges so would be a better bet than your Santander 123.


You need to look carefully at T&C for all the accounts to make sure you can qualify for them - eg the M&S regular saver is only available if you open one of their current accounts and then use the Switching Service to move an existing current account with 2DDs on it. Opening the M&S accounts takes a looooong time.


Another consideration is some of the Monthly savers only pay the headline rate when the account is open for a full 12 months so that will be a consideration if you need to be able to access them at a point during the term.


One other "nice" problem is that if were to you open all the regular saver accounts on the same day and make the maximum regular payments each month then 12 months later you will have £1,450*12=£17,400 plus interest to find a home for. It is better to stagger the opening dates (and therefore maturity dates) so that you have space in your current accounts for the maturing lump sums.


Most of you post is written as "I" or "me" but you use "we" in terms of moving house in a couple of years. If there is a significant other then you should be able to have three of most of the accounts (one each and a joint) so the amount you can have in the highest paying accounts is much more.

Hi LXdaddy, much appreciated.

To be honest, whilst I understand the logic of maximising interest, is there an alternative which keeps the number of accounts open to a minimum?

As you picked up on I am married.

colsten

I'd like to raise this question / suggestion again:

colsten wrote: »

What are your pension arrangements? Read this from Martin Lewis: http://www.itv.com/thismorning/hot-topics/money-martin-lewis-pensions-explained

LXdaddy

siross wrote: »

Hi LXdaddy, much appreciated.

To be honest, whilst I understand the logic of maximising interest, is there an alternative which keeps the number of accounts open to a minimum?

As you picked up on I am married.

As with everything in life, we have choices. We can either have A or we can have B it's hard to have A AND B


In this particular game at this time we can either earn up to 6% interest using quite a lot of accounts or we can have simplicity and earn less (or zero) interest.


Between a couple you can easily have £60K earning 3% less £15/month fee and probably plus some cash back on household bills at Santander.


Or you can have up to £15K earning 4% in three accounts at Club Lloyds.


Using TSB and Nationwide you can get a £13.5K getting 5% (but that's 5 or 6 accounts now).


So take your pick and choose what works for you.


BUT DO CONSIDER THE PENSION QUESTION POSED BY COLSTEN.

KTF

LXdaddy wrote: »

You need to look carefully at T&C for all the accounts to make sure you can qualify for them - eg the M&S regular saver is only available if you open one of their current accounts and then use the Switching Service to move an existing current account with 2DDs on it. Opening the M&S accounts takes a looooong time.

Not yet. Only for accounts opened from April 6.

See page 9: http://bank.marksandspencer.com/pdf/CATermsAndConditions-20160406.pdf

Notice of change on page 5: http://bank.marksandspencer.com/pdf/CANov-20160406.pdf

atush

Forget the frivolity. Up your pension

LXdaddy

KTF wrote: »

Not yet. Only for accounts opened from April 6.

See page 9: http://bank.marksandspencer.com/pdf/CATermsAndConditions-20160406.pdf

Notice of change on page 5: http://bank.marksandspencer.com/pdf/CANov-20160406.pdf

You might be right but my reading of page 9 of the first link is that eligibility for the Monthly saver includes a requirement to have used the switching service.


In any case, if you start opening a M&S current account now it might well take you until April 6th to get to the point of being able to apply for a Regular saver.