What to invest my money in and still overpay mortgage

wjr4

How much would you need to last you 6-9 months? That should be your emergency fund. Personally, I’d keep 20k in a Marcus savings account (maybe some in premium bonds if you’re feeling lucky) & look to invest your monthly surplus income. 

KrisP87

wjr4 said:

How much would you need to last you 6-9 months? That should be your emergency fund. Personally, I’d keep 20k in a Marcus savings account (maybe some in premium bonds if you’re feeling lucky) & look to invest your monthly surplus income. 

Thanks for the advice - If you think I’d need 6 months minimum for an emergency fund then I’d need around £6K which leaves me with £14K to invest.. the Marcus savings account seems reasonable but shouldn’t I still be throwing some mortgage overpayments in too? Often the advice reads that if you can’t find a savings account rate that is higher that the interest you pay on your mortgage then overpaying is sensible.

edgex

Maximise your contributions to the pension fund, especially up to the employer matching limit. (I would also look at what you can do with the old pension pot, whether it can be transferred across)
Mortgage overpayments - check when the interest is calculated, how you can make the overpayment, & what the maximum is.

Look at your banks Regular Saver, it may have a better interest rate than Marcus etc. Put the maximum you can each month into it, the interest is a little bonus that you can use if you use the funds to overpay the mortgage.

Even if you had a 12-month emergency pot (£12k) & the regular savings amount set aside (£3-6k?), you could already pay £2-5k off the mortgage.

Anything around the house that needs doing?

steampowered

6-9 months of income sounds too conservative for an emergency fund to me:
- That's plenty of time to find another job, even in a recession.
- Even if the Op was to lose his job, state benefits would be available (i.e. his income would go down but not drop to zero).
- The Op has a partner who is earning.
- The Op is young and doesn't suggest he has children, so is in a good position to reduce his expenses if he did get made redundant.

Personally I'd say no more than 3 months income in an emergency fund in the Op's situation - probably less - to be reviewed as you get older and if kids come onto the scene.

KrisP87

edgex said:

Maximise your contributions to the pension fund, especially up to the employer matching limit. (I would also look at what you can do with the old pension pot, whether it can be transferred across)
Mortgage overpayments - check when the interest is calculated, how you can make the overpayment, & what the maximum is.

Look at your banks Regular Saver, it may have a better interest rate than Marcus etc. Put the maximum you can each month into it, the interest is a little bonus that you can use if you use the funds to overpay the mortgage.

Even if you had a 12-month emergency pot (£12k) & the regular savings amount set aside (£3-6k?), you could already pay £2-5k off the mortgage.

Anything around the house that needs doing?

Thanks for the advice. My bank does a monthly saver at 2% with maximum monthly payments of £250 so this seems like a good start. I definitely will be making mortgage overpayments and also look into premium bonds which I understand you can’t make losses on only potential gains.

DiggerUK

If you can, move the old B & CE pension in to your current scheme. Won't increase your costs and keeps things simple.
Your rainy day is way too high, apart from cash in hand I see no need for such funds. To make sure you will be able to claim state benefits if push comes to shove don't hold more than £6,000.
Line up a couple of 0% credit cards for emergencies.

My back of a fag packet calculations show you could be mortgage free in eight years, go for that financial objective, you will then hold a risk free asset..._

KrisP87

Good points made about moving B&CE pension funds into current scheme. My concentration for the moment will be on making regular monthly mortgage overpayments so when I come to remortgage I am in a much better position for a better rate, etc. I will also look into investing in S+S due to superior investment returns towards the end of the year.