Looking for advice - mid 40s very small amount to invest each month

hbpurple

I am in my mid 40s and have a small amount (£50 - £100) spare each month to do something with.  When I retire I will have a local government pension  - not an awful lot as I work part time on a low salary bracket.  I have a mortgage which we are over paying on (and should pay off in 8 years time if we continue overpaying) but other than that no debts.  I have enough savings for 3 or 4 months if I were to lose my job.
So what should I do with this small amount of money each month. I don't have an ISA - should I start one? Should I invest it? Should I stick it in a savings account? I know very very little about this side of things and although I have read a lot on this website I am still not very sure of it.
I would be looking at 10-15 years before I would want to touch it so fairly long term.
Ideally I would like to retire early but realistically I know that may not be possible.
Any thoughts or advice welcome. 

Thanks in advance.

eskbanker

Chances are that putting your surplus into pension contributions will be worth considering, either by maximising your workplace contributions or starting a personal pension such as a SIPP (and investing within that), although many would advocate overpaying the mortgage, more for peace of mind than strictly financial reasons.

Albermarle

So what should I do with this small amount of money each month. I don't have an ISA - should I start one? Should I invest it? Should I stick it in a savings account? I know very very little about this side of things and although I have read a lot on this website I am still not very sure of it.
I would be looking at 10-15 years before I would want to touch it so fairly long term.

Simple guide 

Saving means putting money in a savings account with a bank or similar . 100% safe up to at least £85K. Interest paid is low , especially at the moment . There are some regular savings accounts that pay better rates , although the offers are time limited.

For smaller amounts you will not need to have  cash ISA savings account .

https://moneyfacts.co.uk/savings-accounts/

Investing means taking a risk in the hope of better returns from savings . Different levels of risk/reward are possible and the longer you leave the money invested the better, In this case you could invest via a pension or via a Stocks and shares ISA.

https://www.moneysavingexpert.com/savings/investment-beginners/

El_Torro

If you're sure you won't need the money for at least 10 years then investing it will probably give you the best return. In your situation a pension is probably more beneficial than a Stocks & Shares ISA (for tax reasons), though you are less flexible on when you can access the money if you go down that route. 

Stopping your mortgage overpayments and investing the difference will probably also give you a better return, though as has already been said you might prefer the security of not having a mortgage to chasing the best return. 

Ultimately if you want to retire early, are in your mid 40s and don't have a great deal in savings / investments already then maximising your return is what you should be doing. This comes with downsides though, which you should be aware of. 

DiggerUK

You seem to be on track to clear your mortgage, and that will improve your cash flow when it's  eventually paid off. But it seems you don't have anything in place to provide between early retirement and when you get your SP.  You do seem to realise that is what will likely happen.

I'll be straight with you, I think that is the case. You need to get a promotion and/or work more hours, it will improve your LGPS payout.

If your looking for mainly retirement savings in 10/15+ years then I'd recommend putting some gold by. We have all our retirement savings in gold and are very happy we did that..._

barnstar2077

There are not that many people who consider gold to be a priority investment.  It can be useful to add diversity to an already substantial portfolio however.

ChopperST

barnstar2077 said:

There are not that many people who consider gold to be a priority investment.  It can be useful to add diversity to an already substantial portfolio however.

Correct.  The OP has made it clear they don’t have a substantial portfolio.  Gold is completely the wrong asset class to suggest for them.  Either increasing workplace pension contributions or starting a SIPP with a reasonable equity allocation would be the most sensible approach.  

DiggerUK

hbpurple said:........When I retire I will have a local government pension  - not an awful lot as I work part time on a low salary bracket..........

A horrible thought just crossed my mind, are you earning enough to pay NI, if you aren't
paying NI contributions it will affect your SP. Have you obtained a forecast on your SP from the DHSS? if not I recommend you find out ASAP..._

eskbanker

DiggerUK said:
Have you obtained a forecast on your SP from the DHSS?

As the DHSS ceased to exist in 1988, any such forecast would be at least 32 years out of date, so it would be worth getting a more up to date one from the DWP....

xylophone

https://www.gov.uk/check-state-pension Try here.
Do you earn enough to pay tax?

hbpurple

Thank you for all the replies - I do earn enough to pay NI and tax so no issues there.