Please recommend my next financial move

enthusiasticsaver

I would look to a combination of things although you seem to be pretty switched on and in a good position. You could match your employers pension contribution and pay in an additional 3% which is the most tax efficient way of saving for retirement. You could overpay your mortgage which may let you decrease ltv percentage leading to better mortgage rate. Stocks and shares isas at an appropriate risk level for you is another option.

Dird

You could also look to move your emergency fund elsewhere e.g. 3-5% current accounts & maybe 6% regular savers; at the minute your mortgage interest rate is higher than your savings rate

starkiwi26

thanks all for the advice.
I am still planning my direction of investment.
i prefer not to overpay my mortgage because it will tie up all my cash (cannot withdraw without big action eg remortgage to free the cash). it will be big limitation in the event if i can find a bargain house at my dream location, i might want to buy another house.

i am looking at ISA shares and stocks. if i invest up to the ISA limit £15,240 this year, and let's say i have a £2k capital gain by end of the year or etc.
a) what will happen to this £1k gain? will it become part of my ISA? (my ISA in 2016/7 become £17,240)
b) can i sell the stock/funds, and reinvest all (£15240 + £2000 gain) to other stocks/funds?

Many thanks.

bigadaj

Your gains in an isa are tax free, no capital gains, income tax or anything else. However it is an annual allowance so if you cash it in you can't get it back.

So in your scenarios you don't pay tax if you cash it in, you can switch investments within the isa though.

You also get a new allowance next year which is being increased to £20000.

A year is obviously too short a time to be investing in equities, you are just as likely to lose as to gain really over the timespan, it should be for five and ideally ten year horizons.

Eco_Miser

starkiwi26 wrote: »

i am looking at ISA shares and stocks. if i invest up to the ISA limit £15,240 this year, and let's say i have a £2k capital gain by end of the year or etc.
a) what will happen to this £1k gain? will it become part of my ISA? (my ISA in 2016/7 become £17,240)
b) can i sell the stock/funds, and reinvest all (£15240 + £2000 gain) to other stocks/funds?

A) Your S&S ISA will vary in value every day, maybe up, maybe down. Any capital gain (or loss) you have made at the end of a year is just a snapshot figure, it will always have been part of your ISA.

b) You can sell part or all of your holdings at any time, and use that cash to buy other stocks or bonds or funds - so long as you don't withdraw the cash it remains part of your ISA.
(This applies to a normal S&S ISA with a broker or funds platform, an ISA direct with a fund manager or certain other financial institutions may have conditions specific to that ISA limiting your actions).