Where to next folks?

Ali_03

Hello all

I hope you are all enjoying the lovely English weather! This site has been invaluable to me and I've been on here for years! I always recommend to family and friends.

I would like some advice, opinions and criticism about what I should be doing in terms of investments/pensions/debt etc. A bit about me, I'm a single man, 33 years of age. I have no dependents. I have a fairly secure job (he says) and i'm by habit a saver rather than a big spender.

Currently this is where I stand -

Cash in current accounts and regular savers- £68,000
BTL properties- £535,000
LISA - Vanguard FTSE Global All Cap Index- £12,632
SIPP - Vanguard LS 60%- £6,918
S&S ISA- £3,272
Value of L&G Pension- £14,840
Value of DB Pension- £1,438
Total Assets £642,100

Mortgages- £263,884
Other debts- £95,500
Interest cost per month for all debts- £450
Total Liabilities £359,384

Thanks:beer:

barnstar2077

Do you really need that much cash on hand? Why not drip feed some of it into your ISA or pension? (depending on when you think you may need the money.)

Once you have some emergency savings then splitting your money between an ISA and your pension is normally the way forward. If the mortgage is weighing on your mind then you could allocate some there as well, but the interest you are paying is probably quite low at the moment and you could always use some money from your ISA at a later date to bring it down if there is a considerable interest rate rise.

Although having said that, what are "other debts"? Seems like a lot of money.

Ali_03

Hey barnstar2077, I probably don't need that much cash but I like the flexibility of having it to hand if I need it.

The other debts are mainly credit cards (0% offers) and family debts. I'm not sure if it's a good idea to pay down my debts because they are very cheap.

I have set up a regular payment of £500 per month to be paid into my Vanguard FTSE Global All Cap Index S&S ISA

Thanks

Albermarle

I have set up a regular payment of £500 per month to be paid into my Vanguard FTSE Global All Cap Index S&S ISA

You will know that if instead you paid this £500 into a pension ( using the same Vanguard Fund if you like ) then every month HMRC would add £125 to it as tax relief . That is £1500 free money from the Government every year. If you were paying higher rate tax in your job they would give you another £1500 .
Downside is the money is not accessible until 55 and taxable ( but a lower rate )

barnstar2077

Albermarle wrote: »

You will know that if instead you paid this £500 into a pension ( using the same Vanguard Fund if you like ) then every month HMRC would add £125 to it as tax relief . That is £1500 free money from the Government every year. If you were paying higher rate tax in your job they would give you another £1500 .
Downside is the money is not accessible until 55 and taxable ( but a lower rate )

I believe the age is 58+ for someone of the OP's age.

Ali_03

Albermarle, I don't like the idea of locking away a large chunk of money away for such a long time. Maybe I could invest £250 in pension and £250 in S&S ISA?

I do have the LISA which I contribute 4k every year to get the 1k bonus.

Alexland

Is the BTL income pushing you into higher rate tax? If so pension contributions would be attractive.

Thrugelmir

What's the longer term plan for the mortgage debt? Leveraging is double edged. Just over 2% interest is extremely competitive. Presumably you incurred product fees though. So true cost is somewhat higher.

Ali_03

Alexland wrote: »

Is the BTL income pushing you into higher rate tax? If so pension contributions would be attractive.

Alexland, I’m just on the threshold.

Thrugelmir wrote: »

What's the longer term plan for the mortgage debt? Leveraging is double edged. Just over 2% interest is extremely competitive. Presumably you incurred product fees though. So true cost is somewhat higher.

Long term plan is to keep the mortgage debt and refinance every five years.

Ali_03

Thank you all for your replies!

Alexland

Ali_03 wrote: »

Alexland, I’m just on the threshold.

In which case keep an eye on the situation to avoid any bonus etc pushing you into higher rate tax. Even if you are maintaining a basic rate income then if your employer operates Salary Sacrifice then further pension contributions are likely to be attractive as you would save both the tax and national insurance only to pay tax on a proportion of it in retirement. The maths for basic rate Salary Sacrifice works out about the same as the LISA bonus.

While I understand that you are reluctant to lock money away in a pension but, assuming you intend to get old, then you will need money (and possibly an awful lot of it) for that stage of life anyway. Another advantage of pensions is that they fall outside your estate for inheritance tax.

Alex