How much of your savings do you invest?

fryderykchopin

For many years I had all my savings sitting on a typical savings account at an amazing interest rate of 0.01% until I decided to change that and make my money grow.

After having changed my mind, I have always kept £10k in a savings account ready for emergencies and invested the rest (£70k) in funds. Recently I have started to wonder whether that’s too much to invest given that it represents most of my savings (88%).

I know this is a very personal question that depends on each person’s circumstances, aversion to risk, etc. but I would like to know what percentage of their savings other people have in investments or if there is a general rule-of-thumb for this.

thegentleway

I keep the money I need to use short term (<5 years) liquid in PBs and saving accounts. I invest the rest, around 95% at the moment. I wouldn’t worry about the % though. It sounds like you have covered the unplanned expenditure (emergency fund) but have you considered planned expenditure for the next 5-10 years? 

Scrudgy

Personally I only keep cash for current needs or save for specific projects. Everything else is invested. I will keep some cash when I retire, but for now I keep stuffing money into my pension through salary sacrifice and saving money to spend on the house so that all the big expensive projects are done before I start retirement. 

DireEmblem

I have 6 months emergency savings sat in an account, and cash pots that build up over the year to cover known expenses.

Anything above that I invest.

Alexland

During your working life you only need a fixed amount of emergency cash in top rate savings account(s) and the rest can go into a growing diversified investment portfolio in tax efficient wrappers as you continue to contribute and accumulate.

Maybe some extra cash at points in your life when you have big costs soon (eg house deposit, wedding, new car, etc) otherwise not too high on cash as it doesn't really keep up with inflation so you loose spending power each year.

In deccumulation (retirement) it's a bit different as you may need a buffer of around 10% cash (eg 3 years drawdown) to avoid drawing from the investments while markets are low although that could be less if supported by a higher amount of smoothed or guaranteed income such as state or defined benefits pensions and are willing to trim your spend while markets are low.

pjcox2005

Current account often runs with a spare £1k otherwise everything is invested. Relatively secure job, and can always use credit card (0%) for emergencies. Ability to cut back on spending if I need to pay that off quick given earnings.

Eco_Miser

The percentage figure is fairly irrelevant - it keeps increasing as more is saved and invested and the investments grow, whereas the amount held in cash is fairly constant.

However, most of my cash was spread across accounts typically paying 5% on a few thousand each rather than 0.01%. Those rates are not available now, but .5% and better still is, and are signposted and discussed in detail on this forum.

cattie

I probably currently have about 75% of my money invested via S&S isa's. Then I have had a fair few fixed term savings accounts, but as these have started to mature, the money from those accounts will also be invested in s&s, so the percentage will grow.

My outgoings are low-mortgage fully paid up some years ago & I'd estimate I have around 3 yrs worth of living costs either in premium bonds or easy access accounts should any emergency crop up, making me need money fast.

noclaf

I am quite conservative at present with investments as potentially significant property-related costs will hit next year....monthly I invest around 5% of my take home pay into a Vanguard fund and the total invested Vs my cash is 5%:95% (not including pensions+LISA)..not ideal really as would prefer to invest more but untill I have a better idea of how much I will need to budget for next year keeping it sensible.
As an absolute minimum I will use up my full S&S ISA allowance before end of current tax year.

Linton

About 12% of my liquid assets are in cash 88% invested

steampowered

I keep cash of about 3 months expenses in my current account, and invest the rest.

I make use of stoozing by putting most of my living expenses on 0% credit cards, tracking them with a spreadsheet and making sure to pay off the cards or do a balance transfer onto another 0% card before any interest accrues.

I also do not make mortgage overpayments to maximise the amount I have to invest, given the incredibly low rate on my mortgage.

I am currently in a very well paid stable job without kids. When I have kids I might want to keep a bit more of a buffer. I would consider making mortgage overpayments if interest rates increase in future.