investing/saving

[Deleted User]

Hello all
I hope you're well.
I have just tipped over into paying tax for savings (20%) and as interest rates are so awful generally at the moment and specifically for ISAs, I'm wondering what you'd suggest I do with my savings going forwards.
I'm paying 10% of my earnings into a salary sacrifice pension and I dont have much in there (£11,000.00 - I'm 59)  so should I increase those payments each month? And what would you suggest I do with any remaining saving money...a friend uses Vanguard but I've never invested before and am very risk averse.

It'd be good to hear your advice

Thanks

Albermarle

I'm paying 10% of my earnings into a salary sacrifice pension and I dont have much in there (£11,000.00 - I'm 59)  so should I increase those payments each month?

YES put more in the pension. Hopefully you have other pension income from previous jobs ?

a friend uses Vanguard but I've never invested before and am very risk averse.

Your current pension and any other similar previous pensions you have had, will themselves be invested .

[Deleted User]

I dont have much in my other pension either but I think i'll be ok as I've worked out my income/outgoings  So more into pension...ok Thank you

[Deleted User]

How would you suggest investing any other monies? I'd rather not pay tax on savings but perhaps thats going to be inevitable?

eskbanker

Best not to fixate on paying tax on savings - reducing net interest from, say, 1% to 0.8% on a small slice of your savings obviously isn't desirable but shouldn't really be seen as a driver for making major changes to your approach, when set against plummeting interest rates and what is presumably a large pot to start with, especially if you also have some in ISAs.

IMHO it would be better to look at your money in the round, i.e. what you have in total and what you're likely to need and when, before assessing how much you need in cash deposit form and how much can be exposed to investment risk to minimise loss of real-terms value loss to inflation.

[Deleted User]

And once I've decided what i can expose to a little risk ( note a little!!) would you have advice as to where i should start to look? And thank you

eskbanker

Deleted_User said:

And once I've decided what i can expose to a little risk ( note a little!!) would you have advice as to where i should start to look? And thank you

As above, pensions are often tax-efficient ways of investing, but S&S ISAs are also useful - however, it's important to walk before you run, so you need to work out some sort of plan about what you're keeping money for and when, before choosing suitable vehicles to achieve that....

[Deleted User]

I've upped my salary sacrifice pension contribution to 17% (from 10%) - just now. I'm on a relatively low wage so we're not talking mega bucks, but its more  than it was   I was also thinking that popping about £300.00 a month into something which isnt a savings account ( as I have lots of those) but i just dont know where to start.

quirkydeptless

You could put up to £50K of your savings into Premium Bonds which are Tax Free. They've dropped a bit in value, but are currently still close to the top end of Interest Paying accounts

[Deleted User]

I thought about that...but when N S & I's rates plummeted recently, .... it put me off!

Albermarle

And once I've decided what i can expose to a little risk ( note a little!!)

You might not think so but your savings are at risk indirectly due to the interest rate being below inflation ( not all the time but most of the time ) 

So if you have say £100K in savings - interest at 1 % ; inflation at 2% . After 5 years your savings will only be worth £95K in terms of what you can buy with them .

The only way to beat this , is to invest in risk based products like in stock markets .