What to do with savings

SeanSc

Hello Everyone,

New to this so you may have to bare with me!

So currently 25 on 30k per year, Pretty good pension of around 18% including employers contributions I plan on making some voluntary contributions as I move up the pay scale, I am currently able to save around £1200 p/month but this is just getting dumped in a standard savings account not making any interest at all really.

Targeting to save around 70k before I am 30, should I be puting my money elsewhere?

Thanks for any replies,

Sean

xylophone

The LISA might suit your purposes.

You might open a Nationwide Flexdirect current account and associated regular saver.

You might consider a stocks and shares ISA.

Ricardo1980

Some ideas:

Robo advisors:
http://www.advisoryhq.com/articles/best-uk-robo-adviser/
I am using my full ISA allowance with Scalable Capital. I did it to build easily a worldwide diversified portfolio.

P2P lending:
http://www.p2pfinancenews.co.uk/
http://p2pindependentforum.com/
I think if used properly, can be really good. Check also IF-ISA. Once Funding Circle or Lendy open an innovative finance ISA, I will invest there again. Just waiting IFISAs.
I already used them in the past with good results.

Cheap index tracker (ETF):
https://www.bloomberg.com/gadfly/articles/2016-05-05/inside-warren-buffett-s-love-affair-with-the-s-p-500
"Buffett is a big fan of the S&P 500. He has already declared that 90 percent of the money he leaves to his wife will be invested in Vanguard’s S&P 500 index fund. He also wagered a million dollars that Vanguard’s S&P 500 index fund would beat a basket of hedge funds over ten years from 2008 to 2017. (The S&P 500 index fund is currently crushing the hedgies.)"
Most active funds don't beat the market, and you have to pay high fees, that's the reason some people say we should only invest in index trackers or passive funds (I don't remember if this is the name in English). Like S&P 500 or FTSE 100.

Social trading like eToro.
https://en.wikipedia.org/wiki/Social_trading
Seems very risky and volatile.

Shares of a specific company.
It could be extremely profitable, or the opposite, you could lose everything if the company fails (that happened to me once). Read about "diversification".

Some people say LISA is crap. Check that carefully.
Because my pension is more tax efficient (I am a higher rate band tax payer) and not interested in buying a flat, for me LISA is useless.

Know the power of compound interest, specially in your case, because you are very young.
https://www.youtube.com/watch?v=immQX0RKFY0
http://www.moneychimp.com/calculator/compound_interest_calculator.htm

The best advice is read a lot, there are many interesting books. Learn about investment and taxes.
There are also very interesting videos in youtube (just write investment in the search box). Asking in this forum is a good starting point.
Don't forget pensions can be very tax efficient. Use ISAs and your allowances.
Profits and risk are proportional. So, you decide. Up to you.

Hope this helps.

eskbanker

SeanSc wrote: »

you may have to bare with me!

I'll keep my clothes on if it's all the same to you

SeanSc wrote: »

Targeting to save around 70k before I am 30, should I be puting my money elsewhere?

What's the significance of this target, what are you planning to do at 30?

Ricardo1980 wrote: »

Don't forget pensions can be very tax efficient. Use ISAs and your allowances.

Using ISAs used to be sound one-size-fits-all advice but less so nowadays, given low interest rates, the personal savings allowance and higher annual ISA allowances. A Help To Buy or Lifetime ISA (neither of which use much of the allowance) would make sense if OP plans to make a first-time property purchase, or S&S ISAs are likely to be beneficial for long-term growth (but less suitable if, say, OP intends to buy property in five years time at 30), but cash ISAs are practically useless now and P2P IFISAs haven't really taken off yet.

I'd recommend OP gets multiple regular saver accounts....

Ricardo1980

eskbanker wrote: »

I'll keep my clothes on if it's all the same to you

What's the significance of this target, what are you planning to do at 30?

Using ISAs used to be sound one-size-fits-all advice but less so nowadays, given low interest rates, the personal savings allowance and higher annual ISA allowances. A Help To Buy or Lifetime ISA (neither of which use much of the allowance) would make sense if OP plans to make a first-time property purchase, or S&S ISAs are likely to be beneficial for long-term growth (but less suitable if, say, OP intends to buy property in five years time at 30), but cash ISAs are practically useless now and P2P IFISAs haven't really taken off yet.

I'd recommend OP gets multiple regular saver accounts....

If you open many accounts, can that be a problem in your credit score?

Jo_Blogs

Ricardo1980 wrote: »

If you open many accounts, can that be a problem in your credit score?

Not necessaily a problem, but it will indeed have an impact on a credit score, especially if a whole load are opened at once that are associated with opening a bank account first. I suppose it depends on what is more important at this time. A credit score or saving accounts

isasmurf

Ricardo1980 wrote: »

If you open many accounts, can that be a problem in your credit score?

Applying for a savings account shouldn't affect your credit score, but applying for a current account may do.

Lenders will generate their own credit score for you based on the information they see on your credit file. They will only see accounts that offer credit such as current accounts and searches for credit. Applying for a savings accounts should just be an id check which won't be seen by other searchers on your credit files.

SeanSc

The best advice is read a lot, there are many interesting books. Learn about investment and taxes.

Could you recommend any books?

I am using my full ISA allowance with Scalable Capital. I did it to build easily a worldwide diversified portfolio

Is this a S&S ISA? Just to be clear I have not yet had an ISA or had experience in any sort of investing.

What's the significance of this target, what are you planning to do at 30?

Current living arrangements are as follows Part ownership on a property, this was the best option for us at the time as myself and my partner were on low income, hoping to sell by 30 and have a substantial down payment on a property.

LISA is something that I will be looking into.

Forgot to mention currently I have around 11k cash sat in a savings account, is it in my best interest to put this in an ISA or drip feed the ISA over the course of the year?

Thanks again!

Eco_Miser

SeanSc wrote: »

Could you recommend any books?

There's a thread at https://forums.moneysavingexpert.com/discussion/5043692

SeanSc wrote: »

Current living arrangements are as follows Part ownership on a property, this was the best option for us at the time as myself and my partner were on low income, hoping to sell by 30 and have a substantial down payment on a property.

LISA is something that I will be looking into.

If you have ever owned (part of) a property, a LISA is only available for use at age 60. (Capital is available earlier with penalty greater than the bonuses)

SeanSc wrote: »

Forgot to mention currently I have around 11k cash sat in a savings account, is it in my best interest to put this in an ISA or drip feed the ISA over the course of the year?

This is often debated. Investing cash as soon as it is available is usually the right decision, and no-one will know if it was the wrong decision until much later.

Drip feeding avoids the "Aargh!" factor if the market drops the next day, but you could still get that if the market drops the day after you finally get it all invested, and meanwhile you've missed out on dividends and potential growth.

SeanSc

Looking through some robo advisors caame across nutmeg..

Anyone had any good/bad experiences when using such a platform?

ColdIron

Try a search?
http://forums.moneysavingexpert.com/search.php?searchid=171954410