Finance Review

Cotta

Hi All,


I was wondering if someone can give my finances a quick review? I am 36 and I am planning on renting out my current house and buying a second one with my partner. Does this make sense? Also with my current money I want to be able to access it relatively easily but is it in the most productive accounts?


Savings


TSB Current Account @ 3% - £1500
HSBC Regular Saver @5% - £2000
HSBC Advance - £500
Nationwide Current account - £1000
Nationwide Regular Saver @ 5% - £2200 – maturing on February 14th
First Direct Regular Saver @5% - £2100
First Direct Cash ISA @0.55% - £5103
Marks and Spencer’s Regular Saver @5% - £1000

Other

Property value = £203,000 with mortgage outstanding of £94000 at 2.2%.

Pension Pot = £45000

Salary £31k with 7% paid in to my pension pot matched by my employer.

I have just got married and a kid is on the way. My wife wants to move to a bigger house so I want to make sure everything is in order. Any advice on my current setup would be appreciated.

Alexland

Congrats on the pregnancy hope it goes well. Why is the £5k cash ISA only 0.55% when circa 1.3% is possible elsewhere?

How are you planning to pay the deposit on the new larger property? Is your partner a first time buyer with a HTB ISA or LISA?

Will the combined mortgages leave you uncomfortably leveraged? Our income dropped and expenditure increased when we had kids. They need looking after 24x7 for years.

Might be time to start planning your finances together? I never think of mine in isolation.

Alex

Albermarle

Pension Pot = £45000

Do you know how the money is invested inside the pension? . With many years to go before you retire it is better be in higher risk/higher potential reward funds.

TJB24

Would be useful to know OP's age as this factors in to retirement planning and any provisions for inbound sprog.

Also an important factor is determining your monthly budget and what your current savings ratio is, and that also factors in.

badger09

Additional questions specifically about existing accounts:

Why a Cash ISA at all?

Why £500 in First Direct earning 0%?

Do you need £1000 in Nationwide earning 1%?

adonis10

Don't forget about the additional stamp duty that you may be liable for if you purchase a 2nd property.


https://www.stampdutycalculator.org.uk/stamp-duty-second-homes.htm

iglad

Emptying the not very big pension pot to buy a 2nd house doesn't seem quite right to me as it makes no sense to me.

Cotta

iglad wrote: »

Emptying the not very big pension pot to buy a 2nd house doesn't seem quite right to me as it makes no sense to me.

I'm not touching my pension pot, also how big should my pension pot be?

Cotta

badger09 wrote: »

Additional questions specifically about existing accounts:

Why a Cash ISA at all? Bad management on my part, I let my last First Direct Regular saver mature and this is where I put it. I then just sent across loose cash when I had ti to this account.

Why £500 in First Direct earning 0%? Easy access emergency cash

Do you need £1000 in Nationwide earning 1%? No but I am not aware of anywhere offering much better.

Answers in bold above, I think for the above three I need to move them to a better account if one exists?

Cotta

Alexland wrote: »

Congrats on the pregnancy hope it goes well. Why is the £5k cash ISA only 0.55% when circa 1.3% is possible elsewhere? Bad management, I let my Regular saver mature and I just added some money to this. I thought it was the best on offer allowing easy access with no penalties.

How are you planning to pay the deposit on the new larger property? Is your partner a first time buyer with a HTB ISA or LISA? Partner is selling her property which will raise £20k and I am to match it.

Will the combined mortgages leave you uncomfortably leveraged? Our income dropped and expenditure increased when we had kids. They need looking after 24x7 for years. Yes I think this is something worth more analysis.

Might be time to start planning your finances together? I never think of mine in isolation. Good point.

Alex

Thanks Alex - answers above in bold.

Albermarle

I'm not touching my pension pot, also how big should my pension pot be?

As big as possible of course !

Obviously with a salary of £31K and kids on the way , probably will be a struggle to add more than you do already . In this case my original question has some importance .

Do you know how the money is invested inside the pension? . With many years to go before you retire it is better be in higher risk/higher potential reward funds.