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Davethepioneer

Money pot £600,000

Pay mortgage £118,000
Pay loan £21,000
Credit Card £2000

That leaves me debt free apart from the £350 I pay each month for my car, I'm due to trade it in for another one or hand back or pay the final balance of £11,000 but I'm thinking of trading in for a 2018 plate when the time comes and paying monthly again as the car OTR is £36,000 but that's a different story.

So with the above paid off that leaves me with £459,000 which I should put into NS&I

So advice on here says I can put £20,000 in an ISA for me and the same in an ISA for my wife this tax year and every other tax year if I wanted.

I can also put £4,128 in a JISA for both my boys aged 8 & 5 is this per tax year also?

Can I also open a LISA in conjunction with the above or are they the same? According to google I can put £4,000 per tax year into this.

Pension wise you advise to put some into my wife's pension, now would that be her company pension to which her employer matches what she puts in but I doubt they would match a huge amount or do you mean setting up a private pension for her and one for me? Do I pay a tax on that?

You say I can put money every year in ISA so do you mean leaving the money in NS&I and then every year taking the amount needed and putting it in or taking it from somewhere else.

I'm so sorry for all the questions

atush

Davethepioneer wrote: »

Ok this is going to sound bad but I don't mean it to. Yes my priority is my family and making sure we are all going to be financially secure. Now I'm not saying it's going to happen but both my wife and me have been in failed realationships before. I'm not saying it's going to happen with my wife and myself but you just never know so why would I put money into her pension when if something did happen which touch wood it doesn't that would be money lost. I also have her brother who is hinting at me to give him money so he is mortgage free. I've taken risks with my life to get this money and I just don't want to be stupid with it

If you and your wife split she gets half anyway. So why not save tax instead of worring about splitting up?

atush

Pay off your loans and CCs.

open a PP/Sipp for you and your wife- if she has a pension already top it up to the max. Her entire salary or 40K whichever is larger. For 40K you put in 32K and it gets Tax relief on top.

If you have a limited company, pay through that for your pension. If not, ask your acct about the advantages of becoming one.

BTL is a business. Just one property is not a good business. BTL is now heavily taxed, so unless you have skills in the business I dont rec it.

S&S isas for both of you, and Lisas if you want, and Jisas for the kids. Vanguard was mentioned, but you could at your age consider the 60/40 instead of the 40/60. Or preservation of capital ITs as described above.

6-12 months outgoings in cash, saved at the highest interest rate you can find (Santander etc).

So you already invedt in property (your own). So you'll have cash pension, S&S isas.

Do you need a new flash car every few years? Could you consider keeping it when the lease is up? Or handing it back and buying late model used (ie 2017/2016) for cash?

Your kids are already old enough for florida- book a holiday for next year. No point in waiting if you have the money.

Consider spliting the rest of yoru money into tranches for cash, investing and pension for the upcoming years.

Davethepioneer

I'm not worried about splitting up, it was just a general question. The car isn't flash to be honest. The boys, well the young one we feel isn't old enough yet due to his height he would be restricted on most things and Florida isn't going anywhere. I'm not a Ltd company but will see what my accountant says. ISA I understand, what I wanted to know is where do I keep the £20,000 that I want to put in next tax year, is it in the NS&I or invested somewhere for the year then taken out

Eco_Miser

LISAs are for people under 40 at time of first payment, so not for you, but maybe for your wife (I can't see her age mentioned). The £4000 that goes in a LISA is deducted from what you can put in an S&S (or cash or IF) ISA, so only £16000 left for that (but LISAs can hold S&S so there's no disadvantage there, and a massive advantage if held until 60 (and a small disadvantage if cashed in earlier).
All forms of ISA are repeatable each year.

The £20000 you're going to put in an ISA in April 2018, probably leave in NS&I. The sums you're going to put in ISAs in subsequent years, invest in the same underlying funds in an unwrapped account now.

The purpose of the suggestions of NS&I is to immediately put your large lump sum somewhere where it it safe from bank collapse and will earn some interest, until such time as you have decided exactly what to do with it. You can withdraw bits as you find a better place to put some, whether that is a slightly higher interest savings account (but no more than the FSCS compensation limit per person per institution except NS&I which has its own guarantee), or investment funds, or paying off debt, or buying a car, or opening high interest current accounts with a few thousand.

jamesd

Some options to consider in the peer to peer lending area.

With protection fund:

1. Unbolted. Secured on pawned goods, with gold-backed loans paying 8% a year, and other pawned items like high value watches, silver and such paying 10.5%. Gold backed by insurance against a drop in the gold price and the other ones by a provision fund. Also some without either protection. You could probably invest at a rate of about £500-800 a week to a maximum of about £13,000-£21,000 because the normal loan term is six months until repayment, leaving 26 weeks worth the effective maximum. You'd probably get about 10% overall based on the mixture of loans between the types. Pretty much automatic lending, just set up a limit for autoinvest and feed more money in as it gets lent out.

2. Lending Works. About 5% with protection fund.

3. RateSetter. About 3.5% for the rolling market (rapid access) product, with protection fund.

Without protection fund, secured lending instead:

4. BondMason. About 7% after charges. They manage investments at lots of peer to peer platforms for you, a convenient way of diversifying among lots of places. No overall protection fund but some ways they invest may have one.

5. Ablrate. 10-15% for loans secured on property of various sorts, from houses through business buildings, land and machinery. Assume perhaps 2% loss after sale of security for net return before tax of about 10-11%. Has an ISA. No protection fund, secured lending instead. Stick to £250-500 per loan until you know enough to do more by your own decision.

6. MoneyThing. 10-12% for loans secured on buildings and land, rarely other things. Assume about 2% loss to bad debt after security, so about 10% net before tax. ISA planned, not available yet. No protection fund, secured lending instead. Stick to £250-500 per loan until you know enough to do more by your own decision.

7. Collateral. 10-15% for loans mostly secured on land and buildings, though lots are property development loans that are fairly high risk compared to other P2P. Sometimes loans secured on pawned items at lower rates, very high demand for them. Maybe 9% returns after bad debt before tax. No protection fund, secured lending instead. Stick to £250-500 per loan until you know enough to do more by your own decision.

The common factors are that none has FSCS protection and all pay more than any mortgage you have is likely to be costing you. You might consider a split of this sort between them:

1. £20k, 10% expected return
2. £20k, 5% expected return
3. £50k, 3.5% expected return
4. £50k, 7% expected return
5. £20k, 10% expected return
6. £20k, 10% expected return
7. £20k, 9% expected return

On that £200,000 you'd expect an average overall return of about 7.025% before tax, £14,050 a year. For £100,000 keep 1 the same, halve the rest except take 5k more from 4 and 5 to give to 1 and keep that at £20k.

The splits are based on relative risk levels and platform history as well as effort level. Easy diversification is why Bond Mason gets £50k, long history and the protection fund why RateSetter does. With that spread of seven P2P platforms you aren't going to have too much exposure to any one platform.

greenglide

where do I keep the £20,000 that I want to put in next tax year

You could invest it in the same funds as the ISA in a unwrapped account and the put it into the ISA next April using a "bed and ISA" operation which most platforms will do at a lower charge than a normal sell and buy.

You are unlikely to incur capital gains or dividend tax during that period unless you already have unwrapped investments.

Many other people might differ in your definition of a £36,000 car as "not flash" but horses for courses!

Davethepioneer

Hi thanks for that I've just been looking at LISA which would not be suitable as she has just turned 40. I'm getting there slowly with the information that is being given, I do apologise for all the questions, when someone puts an answer in easy to understand lingofor someone who doesn't follow these interesting things about money it takes a while to sink in.

I now know I can put £20,000 in an isa and so can my wife each tax year. I can also put in an amount to JISA for each of my boys. I need to look into SIPP for myself and my wife and it would be fair to say that paying the mortgage, loan and CC off would be a good idea. I know I can split between cash isa or SS isa but I can't do no more than £20,000 between them. This still leaves a huge chunk of money so stocks and shares look the way to go but how much? Is it something you can DIY or do I have to pay the guy who came to see me.

Davethepioneer

Sorry you posted stuff as I was writing, will read now ��

jamesd

I'm not sure it makes much sense to pay off the mortgage when it's fairly easy at the moment to make more from investments than your likely mortgage interest rate. Does mean being willing to do some investing, though, which will have to mean some equity (share fund) investing long term in the mixture. In general paying off a mortgage makes you poorer long term, it's just a case of how desperate you are to get rid of it and pay that being poorer cost. I've one at about 10% of my wealth and I could easily pay it off but I don't because it'd just make me worse off.

For the BTL, you should be thinking of doing it with mortgages inside a company set up just to do that, to increase the number of properties you can have for diversification. Preferably in a mixture of towns so not too much is in one town or area. Terraced houses are likely to get more stable tenants than flats ans you might consider 75% LTV to get four times the number of properties. Residential mortgages are usually cheaper than BTL so you might fund at least one via increased borrowing on your own home, then lend to the BTL business as a director's loan.

It's also worth wondering whether you want to retire and what sort of income you'd want to have to do that. With £700,000 of capital you might reasonably expect something over £21,000 a year of income for life could be generated, assuming 3% of capital as a sustainable rate.