Best investments and savings plan?

Determined_Janet

Hello. I’m 47 and I just paid off my mortgage and ALL debt except for £1000 on a zero interest card (should have this cleared in 2 months). I currently save around 14% of salary into a pension, so am looking to focus on short and longer term savings/investments. I’ve got a 3 month buffer/emergency fund plus a bit extra in an accessible cash isa and have opened a regular saver which will pay 5% AER on £250/month over 12 months. I’ll have £500-£700 per month surplus on top of this and really want to invest this is the wisest way possible.

What do folks recommend I look at?

AlanP_2

Determined_Janet wrote: »

Hello. I’m 47 and I just paid off my mortgage and ALL debt except for £1000 on a zero interest card (should have this cleared in 2 months). I currently save around 14% of salary into a pension, so am looking to focus on short and longer term savings/investments. I’ve got a 3 month buffer/emergency fund plus a bit extra in an accessible cash isa and have opened a regular saver which will pay 5% AER on £250/month over 12 months. I’ll have £500-£700 per month surplus on top of this and really want to invest this is the wisest way possible.

What do folks recommend I look at?

What are you saving or investing for, and over what timescale?

It sounds like you want some short term (so savings) and some long term (so investments if >5 and ideally >10 years).

If you have a partner what is the overall family / household finance situation?

Kids to help out through Uni?

Tax situation?

Ideal retirement date /age?

How much needed in retirement?

14% pension contribution seems pretty good but if you only started last week it isn't enough.

What I am saying is there are lots of options and your circumstances will indicate what might be most suitable for you.

justme111

What age do you think about retiring at? How much money would you need? What is your pension assets up to now? Are you standard or higher rate payer?

Determined_Janet

Thanks. I’m in full time employment, higher rate taxpayer (c just over £50kpa), no dependents.partner is self-employed. He has a few credit card debts but under control and his own pension. I’ve been saving into pension since age 18, initially into a private pension with employer adding, now into employer fund on a contributory basis. Combined funds stand at about £230k.

I’d like to retire or work part time within 10 years but that is probably unrealistic. Probably need £1500-£2k/per month income in the future.

I just want to build up a fund of savings and then look at the best options for income in the future.

TJB24

Determined_Janet wrote: »

Hello. I’m 47 and I just paid off my mortgage and ALL debt except for £1000 on a zero interest card (should have this cleared in 2 months). I currently save around 14% of salary into a pension, so am looking to focus on short and longer term savings/investments. I’ve got a 3 month buffer/emergency fund plus a bit extra in an accessible cash isa and have opened a regular saver which will pay 5% AER on £250/month over 12 months. I’ll have £500-£700 per month surplus on top of this and really want to invest this is the wisest way possible.

What do folks recommend I look at?

As others have said, it depends on your goals and attitude to risk. Personally I'd say consider an Investment / Stocks & Shares ISA, and put your extra cash into the market.

MSE's guide is here: https://www.moneysavingexpert.com/savings/stocks-shares-isas/

All investments have some level as risk; the market goes up and down every 15 minutes. The key is to choosing a portfolio that is 1) diverse (i.e. don't put all your eggs in one basket) and 2) geared at long-term growth. It's very difficult to predict what your ultimate return will be.

I currently invest £850 a month into a series of different investments, which include a mix of company shares, managed equity funds, and bond funds. All of my equity funds have more than doubled their returns in five years.

If you're a total beginner, I'd reccomend choosing Hargeaves Lansdown. Their account fees are a little high, but they make up for it in excellent service and advice on how to get started. It's also easy to understand your accounts on their app and web portal.

You could built this up fairly aggressively until retirement, and then when you're ready to down tools you can take a more conservative approach, and switch your investments into lower-risk stocks with a focus on providing a regular second income.

AlanP_2

What I would do then is, in conjunction with your partner, work out a plan to get to the point where you (or both of you) can retire / reduce hours in 10 years time (or as close as possible) if that is your objective.

Is your target of £1500/2000 pm joint income or just yours? Pre or post-tax?

A S&S ISA as suggested by TJB24 could be an option, as could higher pension contributions or a combination. Whatever the decision I would suggest you DO NOT invest in company shares but stick to pooled investment options like funds.

xylophone

Had you considered increasing your pension contributions?

Determined_Janet

I’m maxed out on the company contribution percentage but could increase my own percentage.

justme111

That money would just about take you out of higher tax rate if paid into pension. That would be my course of action as I am not keen in spending my life hours working paying a half of earned as a tax.

justme111

I would open a separate pension not related to the work one. You would be able to access it in 10 years time while company one is going to be later.

justme111

Edward_Smith wrote: »

I would advise to consider more traditional types of investment activities, such as banks, securities and dividends from startups.

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