Reorganising Finances for my 30s

Yonder

Hi all,


Long time adherant to Martin and forum lurker here, taking the next step to become more involved.


I turned 30 last week, and am taking a good look at my savings portfolio to make sure it's appropriate for my plans over the next few years. I'd sure appreciate the advice of some of you experts on here, as I've reached a bit of an impasse.


Savings will go towards a house. I moved in with my partner 4 years ago, who already owned a house. We plan to buy together in the next 2-3 years; I am a first time buyer.


Current setup:

- £10k in HTB ISA
- £8.5k in GS Marcus
- £5k across two P2P platforms
- £5k S&S ISA
- £1.5k in TSB Classic Plus
- £1k in 1 year fix
- £1.25k in FlexDirect (joint account, partner uses the other £1.25k for the 5%)
- £2k in 5% monthly saver


So as you can see, I don't mind taking some time to manage my finances.


The reason I've bold/italic'd the Marcus, is that up until 2 months ago it was pretty much empty. 3 monthly savers have all finished close together, and emptied into there. Unfortunately it seems the banks are cutting their MS options/rates, and I can't reapply for the same assortment.


My main question is, what should I do with this Marcus money? Should I distribute it into my P2P/S&S evenly? Should I invest in something else? Are there any savings account options I've overlooked? I'm just loathe to leave such a significant amount at 1.5% interest, when it was earning ~5% over the last year...


Please do feel free to point out any other issues with/comment on how the rest of my portfolio is utilised.


Yonder :-)

AnotherJoe

You havent mentioned your pension arrangements. At all.

They should be an integral part of your finances.

quirkydeptless

The next tier of Regular Savers past the 5%ers I use, is


Saffron Building Society 3.5% £200 per month*
Monmouthshire Building Society 3.0% £300 per month**
Virgin Money 3.0% £250 per month***


* Open an Easy Access account with them first, then you can fire up the RS online


**Online access, but you need to open it by post at the moment



*** Open in branch only, so you need to be near one. Then you can standing order into it. Also you can have one per issue, which seem to churn out every few months.


So with a bit of setting up, you could put away your Marcus money feeding into these in a few months and get 3+%

cloud_dog

Yonder wrote: »

Current setup:

- £10k in HTB ISA
- £8.5k in GS Marcus
- £5k across two P2P platforms
- £5k S&S ISA
- £1.5k in TSB Classic Plus
- £1k in 1 year fix
- £1.25k in FlexDirect (joint account, partner uses the other £1.25k for the 5%)
- £2k in 5% monthly saver

You don't appear to be making use of a LISA, and missing out on the government 25% bonus.

Yonder

Appreciate the advice.


My pension is via salary sacrifice into the work scheme; I pay in 5% of my gross, work pays in 7%. I have a pension from my previous employer too (I was public sector, now private).


Regarding the LISA, as I have the HTB ISA which is currently not at the £12k limit for 25% bonus and pays 2.5% interest, I have kept this as cash LISA %'s are in the ~1 region. I could look into stocks & shares LISAs which would hopefully see a higher return. My plan was if I had not yet bought a house or gone HTB > LISA by the time I hit the £12k bonus limit, I would do then.


Thanks for your advice on the BS monthly savers quirkydeptless, I wasn't aware (other than the Virgin) that the ones you mentioned existed. I will start the application process for them today!

eskbanker

Yonder wrote: »

Regarding the LISA, as I have the HTB ISA which is currently not at the £12k limit for 25% bonus and pays 2.5% interest, I have kept this as cash LISA %'s are in the ~1 region.

Although cash LISA interest is undoubtedly lower than the HTB equivalent, this is more than compensated for by the higher annual contribution limit of £4K versus HTB's £2.4K, which therefore generates significantly more free government money.

Yonder wrote: »

I could look into stocks & shares LISAs which would hopefully see a higher return.

Not a good idea given the risk involved in investing over a short period of less than five years.

Yonder wrote: »

My plan was if I had not yet bought a house or gone HTB > LISA by the time I hit the £12k bonus limit, I would do then.

Having built up £10K in the HTB, it would take transfers over three separate tax years to get it all into the LISA - you can only use the 25% bonus from either HTB or LISA (but not both) towards your first property purchase so it's important to decide which path you wish to follow before it's too late....

cloud_dog

Wot he ^^^^^ said

Yonder

eskbanker wrote: »

Having built up £10K in the HTB, it would take transfers over three separate tax years to get it all into the LISA - you can only use the 25% bonus from either HTB or LISA (but not both) towards your first property purchase so it's important to decide which path you wish to follow before it's too late....

Good point. I would assume from an interest % point of view, cash HTB vs cash LISA, the best thing to do at this point would be to wait until the end of this financial year(?), then open a LISA with £4k, put another £4k in in April 2020 and the final £2k in April 2021. Plus more at this point from the rest of my savings starting with those at the lowest interest %, which I know will push into the 2022 allowance and beyond (depending on house purchase date).

The reason I haven't a LISA already (considering my available capital) is that we weren't 100% that we'd buy a new house, and we may have added my name to the mortgage on the current property. Under these circumstances if I'd gone for a LISA rather than HTB, if I wasn't to be a 'first time buyer' I'd have taken a penalty to withdraw my money from the LISA (not worth it for me as a pension, as my works scheme is considerably better in terms of what I receive for every n amount I pay in).

ISAs aside, it sounds the best thing to do is look to drip my Marcus money into monthly savers rather than existing/new investments.

Thanks all

badger09

If you don't mind a little extra work, take a look at regular savers from First Direct, HSBC Advance & M&S. All require the linked current account, but pay 5% (£300, £250, £250 respectively) so not to be sneezed at.

All regularly offer switching bonuses, which I haven't checked today, but would all add to your pot. Switch bonuses will require a little hoop jumping, but nothing too arduous;)

bostonerimus

How is your pension invested? If you don't know then find out. Why are you only contributing 5%? I would try to get up to at least 10% so that the total going into the pension is close to 20% of salary.

Albermarle

-

£5k across two P2P platforms

Although not a huge amount of money it is relatively high % of the total for an 'alternative investment'
Normally 5% (max 10%) of a portfolio for this type of product is normal.