How I am going to clear all my debts

sim2335

I just gave it to her it’s easier to forgot about the money then and not spend 

Scheme matured in just over 2 years, all it is bank shares expect you can’t lose and get it at cheaper price

 I will run it by before

 

I wouldn’t say I’m generous I’ve been tricked like my brother had a well paid job at the time and even paid of anthor loan in full I took out over 5k.

People promise me extra money etc when they need money and I fall for it all.

ratechaser

vacheron said:

andys15 said:

So if you cash them before 3 years then would you pay tax on them?

In my work I can cash them out straight away but pay tax. I have to wait 5 years for them to be tax free, but the money I buy them with are paid pre tax 

Sounds to me like a SAYE scheme where the OP is saving to buy shares at the end of a 3 year period, so if the OP "cashes out" they will receive all of their cash contributions back, but will miss out on the chance to make a potentially tidy profit at the end of the 3 year scheme. 

som2335, is my understanding correct? If so, how far into the scheme are you currently (When does it mature)?

I've also got a £500/month SAYE plan with a high street bank, possibly this is the same scheme - option certificate up front so you know the strike price from the start, and can track notional gains over the 3 (or 5) year period. Contributions are post-tax, the benefit is a discounted option price, so you're in the money from the start.

The brochure for my plan says that payment holidays of up to 12 months are possible, but doesn't say anything about cancelling (you can't change contribution levels) - OP, best bet is to call the administrators helpline if you don't know.

Each to their own, but that is a big percentage of your earnings to be putting away for 3 years, even though I know the returns can look tempting...

monetxchange

sim2335 said:

I just gave it to her it’s easier to forgot about the money then and not spend 

Scheme matured in just over 2 years, all it is bank shares expect you can’t lose and get it at cheaper price

 I will run it by before

 

I wouldn’t say I’m generous I’ve been tricked like my brother had a well paid job at the time and even paid of anthor loan in full I took out over 5k.

People promise me extra money etc when they need money and I fall for it all.

I think that shows your financial strategy a little then - thinking big pay outs or returns on your money in the future are better than managing your money month to month and putting away only what you can afford. 

What do you plan to spend to the shares money on when it matures? If it'll just be paying off debts, you might as well cash out now. I think you mentioned a mortgage deposit earlier - it's also important you stabilise your credit file as well before doing this, so don't just count on a large cash sum being enough. Like someone else suggested, 200 into shares and 300 on debt repayments would be a much better balance, would sort out your credit file and would give you a good amount of time to get into the habit of dealing with your own money well yourself - important to show mortgage lenders via your bank statements in the future.

sim2335

monetxchange - I won’t have any debts by then other then student loan
with the money either get a house if I don’t already have one or improve the house I have.
yes that’s what I’m doing now by clearing my debts.

Im not sure if I can change the amount now.

with that low income they seeing coming in will that make it difficult to get a house.

vacheron

monetxchange said:

What do you plan to spend to the shares money on when it matures? If it'll just be paying off debts, you might as well cash out now. I think you mentioned a mortgage deposit earlier - it's also important you stabilise your credit file as well before doing this, so don't just count on a large cash sum being enough. Like someone else suggested, 200 into shares and 300 on debt repayments would be a much better balance, would sort out your credit file and would give you a good amount of time to get into the habit of dealing with your own money well yourself - important to show mortgage lenders via your bank statements in the future.

I think it is important to establish a few more facts before making the above statements.

What we don't know (as the OP appears to be in a SAYE scheme) is their initial option price and the current share price (and ideally a crystal ball as their scheme maturity date is a couple of years away).

I also pay £500 per month into my companies SAYE scheme, but mine is a 5 year and the current one matures in December.
If I followed the above advice and cashed out now to because the proceeds "would only be used to pay off debts" I would receive £29,000, leaving me with £17,000 after debt repayment.... But if I waited until the scheme matured I would receive £63,600, leaving me with £51,600 after debt repayment (based on todays share price).

Why would I end my investment early and give up £34,600 to pay off £12K of loans (most of which are at less than 3% and therefore costing me less than £350 per year)?

What worries me is that if the OP took out a scheme based on a "big bank" share price 1 year ago, the current price may not make it worth continuing with the scheme as all the big banks I know of have tanked over the last 12 months (even assuming that the OP recieved the 20% share price discount which the scheme allows), and it is a judgement call as to whether they will have rebounded in any appreciable manner over the next 2 years when it appears the OP's scheme will mature.

They will not be able to reduce their contracted monthly payments without cancelling the entire scheme and having all their deposits returned but (as ratechaser mentioned above) the OP can possibly take a payment holiday - ours allows 12 months - which could allow them to throw £6k at the debt this year and it may also (check your fine print) allow them to postpone when they have to decide whether or not to buy the shares, which might be useful if the market is still recovering from the current situation (hopefully)!.

monetxchange

You've had some great advice above about the shares scheme. Please take it into account when looking at your future plans and make sure you understand the terms of all things you enter into financially going forward.

Mortgages are generally worked on 4 to 4.5 times your yearly income will be the amount lendable, and it'll be less if you have bad credit, debt and recent defaults on your account, so important to wait till that's all sorted. So at the moment it looks like you're making £10k a year, so could maybe be looking at a £40k mortgage as an example scenario. Not sure where you live, but that's tight in a lot of places. What are your job prospects going forward? Any chance of promotions, working your way up, moving to somewhere with higher pay? You mentioned overtime - any chance of increasing that? I've just got my first mortgage myself so I know what a slog I had to put in over the last few years working all hours god sends to get debt cleared, deposit and moving costs saved up, credit file tip top. If it's your ultimate goal, you need to get serious about it and have a proper plan in place for getting it.

sim2335

I can’t believe if it wasn’t for my brother and friend I would have a house now excellent credit rating and maybe even savings.

job prospspestcs don’t think I can get paid better or prompted just about doing enough to keep me in this job
overtime is finished.

Yes I am serious and do have a plan

clear all my debts, expect student loan
wait about 6 months then apply for moragte with 10% deposit from mum and any savings I have 

monetxchange

I think as advised before, mortgage lenders are now looking for 15% deposits as a minimum. Defaults etc will need to be three to four years old for most lenders too, so it might be a lot longer wait than six months after the debt is gone.

None of this is a criticism or attack. It's just good to know the reality of the situation before you start out. Are there any courses you can do to improve your skills in terms of job progression? Does your employer do any schemes to train up to other roles for example?

 Your wage isn't the highest even without the shares and when you do buy a place you'll have to pay for so many more bills, so looking to improve your earning potential is always a good thing. At the moment your expenses without the debt are £400. So you'd only have just under £600 for mortgage payment, gas, electricity, water, council tax, TV licence, internet as a bare minimum if you were running your own place, so something to think about when budgeting to buy too.

sim2335

I may be able to get 15%
don’t have any defaults or ccjs just missed payments.4 for nationwide each on 2 separate loans that’s it.

No courses etc I don’t have a degree just a levels and had 14 diffent jobs this is longest one about 4 years.

my expenses without debt would only be 
200 a month

TheAble

sim2335 said:

So my friend is gona pay me back 110 a month from December he says if he’s loan increase doesn’t go through

My brother will try pay 200 a month and any extras through bonus at work or  pay.

 I feel really badly for you, I hate this type of thing. I'm sure I'm telling you what you already know by now but lending to friends and family should absolutely be avoided because it changes the nature of the relationship ("the borrower is slave to the lender"); in really exceptional cases of dire need then the amounts should be modest and done on a very short term basis, or rather done as a gift. In your case, on your low income with debts and trying to save for a house you were in no position to either lend or give money. To go into debt yourself in order to pay their debts for them is frankly madness, as I'm sure you now know.
I really hope you get your money back but your above comment doesn't make it sound all that definite. Perhaps others can give a steer on how to best to go about it.