What to do with spare cash?

ade1982

Hi all,

Looking for some constructive advice as I am at a loss what to do.

I'm 35, own my own home outright (it's a reasonably cheap area of the country), and working it out, I save between £800 - £1000 p/m. Work only have auto-enrolment pension (1% / 1% at the moment) and will not match any higher contributions. I'm a basic rate tax-payer.

I have roughly the following amounts:

22k in a 5yr fixed rate Paragon account maturing in 2021
10.5k in a fixed rate ISA at 2.25% maturing in 2019
6k in two Tesco accounts paying 3%
1.5k in my TSB current account paying 3%
1k in a 1yr ratesetter account paying 4.1% (just to see how it works, performs)
£500 in a 3yr NS&I bond

Just over £40k in total, and there aren't many avenues to make money any more. I intend to put the full amount from somewhere in a LISA for retirement, but there's no incentive as far as I understand, to do it any earlier than March - April next year. I will pay that from the amount I save for the rest of this year.

I don't envisage needing money any time soon, and the 7.5k I can readily access should see me through a rainy day.

I'm cautious w.r.t. risk, but if the likelihood is I won't lose too much for a better than average return, I'd have a go.

Any clues as to what are my best options?

jimjames

If you already have all the cash you need then investing in a S&S ISA is probably the next logical step. Have a read around on here or on https://www.monevator.com for more info

badger09

Pay more into a pension? Shame to waste the 20% 'free money'.

ColdIron

badger09 wrote: »

Pay more into a pension? Shame to waste the 20% 'free money'.

Indeed, just because your employer won't match your contributions doesn't negate the advantages. 1% is far too little

steampowered

Your savings are currently held entirely in cash. This sounds low risk, but it is really not. Cash savings are low risk in the short term but high risk in the long term.

While the value of your savings won't go up and down on a daily basis, the value of your savings is consistently eroded every year by inflation.

If you are planning to keep this money for the long term you should be investing into stocks and shares investments. It makes sense to keep your "rainy day" fund covering 6 months of expenses in cash savings, but not more than that.

The decision you have to make is whether you want to invest yourself through a stocks & shares ISA to retain flexibility the ability to withdraw before retirement, or whether you want to lock the money into a pension to get the tax relief on your contributions.

atush

Split your cash between pension (either the one you have or a sipp or PP) and a S&S isa.

ade1982

thanks for the advice everyone, I've spent some time looking at a S&S ISA, and have applied for one.