Complete beginner

Fatbritabroad

Sorry for the 'bowlheadesque' length of my post above

The other thing I read that was a light bulb moment for me was a comparison of pensions to stocks and shares isas

Ignoring the tax free cash bit and advantages for higher rate tax advantages Your pension and isa are basically opposite wrappers for your money. A pension is paid out of gross 'untaxed' income but is taxed on the way out

An isa is paid out of net (taxed) income but everything in it and taken out is tax free

Again this helped me. Massively with the fear factor of losing money. Ive been saving 20% of my salary in a pension for years and have never even thought of stopping when the world went mad. When the financial markets crashed etc I just kept investing and as a result I've probably paid around 60k Into my pension since the age of 18 but have 110k in it. (I'm 36 and until 5 years ago was earning about 30k a year though this has increased massively in the last 5 years)

If you take the attitude that your stock and shares isa is just part of your pension then this certainly helped me get my head round the fact that I should hold my nerve

Deedlebod

Thanks for the quick responses. I thought I was doing the right thing having the savings in ISA's obviously not, looks like I still have plenty to learn. Will digest your advice and let you know how I get on

Fatbritabroad

Deedlebod wrote: »

Thanks for the quick responses. I thought I was doing the right thing having the savings in ISA's obviously not, looks like I still have plenty to learn. Will digest your advice and let you know how I get on

A few years ago you would have been but the low interest rates coupled with the rise of high interest current accounts and the personal savings allowance has changed the playing field unfortunately. Yet another reason to take a chance and invest as if you build a large sum in cash and the wind changes in terms of interest rates you won't be able to shelter it all immediately whereas in a s and s isa you could sell some holdings and transfer to a cash isa if you so wished

bigadaj

In regard to pensions then I very much doubt the OP is contributing the maximum amount, given that this is £40k per year, or actually higher given that they are a higher rate taxpayer with no doubt carry forward available.

Pension will beat most things but it will be tied up for fifteen years, as you get an effective immediate uplift from the tax savings, and it can get your child benefit back at teh £50k level as well.

chockydavid1983

If investing for your retirement and you're willing to tie the money up for 15/16 years, it's a no brainer to put as much as you can above the higher rate tax threshold into pension to take you out of higher rate tax- you'll get 20% tax relief added on plus you can claim back an extra 20% from HMRC by calling them/ completing a tax return.
If more flexibility is needed, S&S ISA is the way to go.
Your emergency fund can go into all the best paying current account and regular savers:
http://www.moneysavingexpert.com/banking/compare-best-bank-accounts
http://www.moneysavingexpert.com/savings/best-regular-savings-accounts

kidmugsy

Here's a suggestion in two parts..

Manage your cash actively: keep moving it to get the best terms - use high-interest current accounts, regular savers, Cash ISAs, and even Premium Bonds.

Manage your shares passively: use "tracker funds" of one sort or another tucked away in SIPPs or S&S ISAs.

Sea_Shell

Fatbritabroad wrote: »

Sorry for the 'bowlheadesque' length of my post above

The other thing I read that was a light bulb moment for me was a comparison of pensions to stocks and shares isas

Ignoring the tax free cash bit and advantages for higher rate tax advantages Your pension and isa are basically opposite wrappers for your money. A pension is paid out of gross 'untaxed' income but is taxed on the way out

An isa is paid out of net (taxed) income but everything in it and taken out is tax free

Again this helped me. Massively with the fear factor of losing money. Ive been saving 20% of my salary in a pension for years and have never even thought of stopping when the world went mad. When the financial markets crashed etc I just kept investing and as a result I've probably paid around 60k Into my pension since the age of 18 but have 110k in it. (I'm 36 and until 5 years ago was earning about 30k a year though this has increased massively in the last 5 years)

If you take the attitude that your stock and shares isa is just part of your pension then this certainly helped me get my head round the fact that I should hold my nerve

Just given us our light bulb moment!!! Thanks. We've been apprehensive about putting more into our S&S ISA....but happily been making our pension contributions. Doh!

Every day's a school day!!

[Deleted User]

How did you make your first post? I don't see where I can do it from the (forum) homepage?

JohnRo

jimbob0802 wrote: »

How did you make your first post? I don't see where I can do it from the (forum) homepage?

Deedlebod

It's done! Charles Stanley S&S ISA opened up, gone for the Vanguard Lifestrategy 60 Equity Acc. Put half my savings in for now, just till I get used to how this works, think I will set up a DD for a reasonable monthly amount and forget about it.
Next job is to review all the high interest current/savings accounts and figure out how to spread the emergency fund out between them all. Think I need to create a spreadsheet to keep track of it all.
Thanks for advice, I think this forum is my new best friend!