Newbie - what to do with my savings

Tophattedman

Hey hey,

I'm a 25 years old, just left university and now working full time. Over the years I've managed to build up a decent amount in savings via family and being careful and was hoping for some advice in terms of making the most of it for someone who's completely new to doing anything more than just putting extra money in a savings account at the bank I've been with my whole life.

The current state of my finances is:
-2k in my current account
-10k in a loyalty ISA at Nationwide giving me 1.1% (I recently moved this from a flexclusive ISA that was only getting me 0.7%).
-I just received my first credit card with a limit of 9k.
-I'm also paying into a pension at 9% a month and have no outstanding debts (besides student debt which I know isn't real debt)

I'm keen to be making the most of what I've managed to hold onto. I know very little about what's on offer but I'm pretty sure the interest rate I'm getting isn't great and I'd be ok with opening myself up to some risk to get more out of it.

Thanks for any help!

Alexland

Do you want to eventually buy a property worth up to £450k? If so consider starting a Lifetime ISA for a 25% bonus on up to £4k of contributions per tax year.

DrSyn

What are you saving for. Holiday, car, buy a property, etc ?
What is your attitude to risk?
How long into the future are we thinking of?
Are you likely to need the money within the next 5 years or 10 years?

PS. If you owe money, its debt, whatever name is assigned to it.

bostonerimus

You have made a good start! but be careful with the credit card. Use it minimally and pay it off in full every month.
Student debt is still debt and if it is high interest you should pay it off asap.

You mention a pension, but give no detail as to how it is invested. If this is because it is pretty much a "black box" to you then your next action should be to fully understand you pension. So find out if it offers funds and research which ones you should buy or if it is a final salary pension. Understand the tax advantages of a pension and how your money could compound,

Albermarle

I know very little about what's on offer but I'm pretty sure the interest rate I'm getting isn't great and I'd be ok with opening myself up to some risk to get more out of it.

The interest rate of 1.1% for a cash ISA is not great ( Nationwide savings accounts have become less competitive over recent years ) So you could look for a better rate .
Nowadays Non ISA savings accounts pay higher interest than ISA accounts and you can earn up to £1000 interest without paying any tax on it , So for you there is no need to have money in Cash ISA.
Non ISA accounts pay 1.4/1.5% for instant access and around 2% for a three year fix..
All these are effectively zero risk and covered by compensation in case of problems .

If you want to potentially get better returns then you will need to look at a Stocks and Shares ISA ( in this case an ISA is better) but your money will be at risk.

AS suggested also make sure you are fully aware of what your pension is invested in ( normally also Stocks a& Shares ) and see if you can get your employer to increase their contribution !

xylophone

https://www.moneyboxapp.com/cash-lifetime-isa/

Above might be worth a look.

Have you ever had a Nationwide Flexdirect current account ? If not, you have the possibility of 5% on £2500 for a year.

You might also consider a TSB Plus current account - 3% on £1500.

Thus you might put £4000 into the LISA, and money into the current accounts above.

You might set up a mid month same day SO for £1000 from TSB to NW and from NW to TSB.

Other savings rates here

https://www.thisismoney.co.uk/money/article-1583859/Best-savings-rates-General-savings-Internet-branch.html

Alexland

DrSyn wrote: »

PS. If you owe money, its debt, whatever name is assigned to it.

Yup we borrowed, incurred compound interest and eventually paid it all back so I would say our student loans were very much real debt.

Albermarle

PS. If you owe money, its debt, whatever name is assigned to it.

Martin Lewis would disagree, he prefers to call it a graduate tax .

DrSyn

Albermarle wrote: »

Martin Lewis would disagree, he prefers to call it a graduate tax .

Then Martin Lewis is wrong!

The OP has been loaned money and now is expected to pay it back. This is a two way process.

Tax is a one way process Always to the government!

Albermarle

The OP has been loaned money and now is expected to pay it back

You can argue about what to call it but for sure it is not like a normal debt. If you do not earn enough you do not have to pay it . I can't see Barclays etc doing that for their loans .
Even does not count against your credit worthiness when applying for a loan /mortgage.

Alexland

Student loan repayments are still considered in mortgage affordability calculations.

The nice thing about MSE forums is that we have freedom to disagree with Martin Lewis. Calling it a graduate tax is an oversimplification. Sure for those who go on to have low earnings, with no prospect of ever repaying, might as well consider it an extra tax. But for those who are likely to eventually complete repayment then it is worth considering the interest rate and if there is long term advantage to paying it back early. This decision can only be made in context of overall circumstances and financial position.

Alex