How much of your savings do you invest?

Alexland

JustAnotherSaver said:
You mention a 'fixed amount' but what is it?

Very much depends on circumstances and probably a topic for a long thread in itself. What is right for you will not be right for me. My point was that unless you have a big expenditure coming up soon then while you are working that's all you need, a fixed amount (although it might need reviewing as your circumstances change), rather than trying to maintain a constant percentage of your growing assets in cash which would start too low and end up too high.

PParka

Fixed £12k in cash for me.  Everything else straight into S&S ISA or pension.   Plenty of available space on 0% credit cards if needed in an emergency. 

MaxiRobriguez

% depends a lot on age as well. It's more likely the older you are the larger than % of investments as the investments should grow whilst the cash part doesn't necessarily need to.

My situation as a 33 year old is:
£165k equity in our house (mortgage remaining of £110k)
£100k in my DC pension.
£58k in S+S ISA.
£12k in bank for easy access.

So 3% in cash for me.

I have previously been quiet happy to run on a few hundred quid in the bank (as credit utilisation is very low and redudancy payout security is very high), but have recently given us more of a bank buffer as we're expecting our first child in May and Mrs Robriguez is planning to take additional time off without pay.

cricidmuslibale

About 20% of my savings is currently invested which I know is nowhere near a high enough percentage in this era of very low savings interest rates. Thus I'm now aiming to increase this investment percentage over time to about 80% leaving around 20% in cash savings for emergencies etc. But it will take some time in my case because I'm currently having to use some savings capital to compensate for significant loss of earnings due to COVID 19 since March and, in particular imho, the Government's totally inadequate (and that's being very polite!) way of managing this pandemic. [I am a freelancer and no Government financial support has been available to me so far at least.]

random321

As a 37 year with 2 young children mine and my wifes allocation is the following:
- 88% Invested in Equities (made up of Pension (70%) , S&S ISA  (12%), S&S LISA (10%), Workplace share schemes (8%))
- 12% Cash (£14,000)
I see the cash breakdown as £9000 emergency fund (covering 6 months essential outgoings) and £5000 for general spending and holidays throughout next year - if these are at all possible!
We are both in stable jobs and a quarter of our salary including employee contributions is sacrificed into our work place pension each month, along with additional sacrifice for child care vouchers and work place shares. Anything left over after bills will either be invested into our ISA or LISA, or used to replenish general spending cash if this has fallen below £5000.
My aim is to keep the spending money at as constant a £5000 as possible, meaning our % in cash will continue to decrease and not touch the emergency fund if at all possible.
As our mortgage is low interest (<2%), we are currently not making any overpayments on this.
Whether this is the best way of doing things I don't know, but it's the best plan I can come up with right now!

Ted_01

My allocation as a 42 year old, no children.

£55k in fixed rate ISA at 2%
£50k in S&S ISA (index funds)

£2k in workplace pension, NEST. (I only recently started contributing after stupidly opting out).

I currently live with my parents but also own a flat without a mortgage that I am currently selling for £220k.

When the sale of my flat completes I have the dilema of what to do with the cash. This is something I've been pondering for months. I've been reading this forum a lot and learnt a lot from the experts on here. I want to invest much of this money in index funds, but also I want to have enough cash available should I decide to buy another property (but I have no plans to buy in the near future). I think its a bit of a want have my cake and eat it predicament. I'll probably keep £100k in total in cash knowing I could get a mortgage if the markets were low and I wanted to buy a house.

fanheater

I found this thread pretty interesting. 

I'm at about one quarter invested with the rest in cash savings, the reason being that I was putting a fair amount of cash aside, first as a buffer for maternity leave and then with a view to improving our LTV when we remortgaged. I actually liquidated most of my holdings to spend while we were down to one salary but we got through the nine months without ever touching it. That was MSE-prudent but in retrospect pointless and definitely cost me a bit. The same happened with remortgaging. I had always assumed I would pay off some capital to cut our monthly bill and ideally get onto a lower rate but when it came to it it didn't seem very rewarding to tie up all our savings just for that.

So I'm now upping monthly contributions into my SS ISA - rather than dump it all in at once - with a view to getting ever closer to 100% committed, probably over a year or so. That's a long time but I'm dropping what feels like a lot into the market every month and I never quite know whether I'll have run out of surplus cash in six months or a year. The next horizon for me is to pay for a loft conversion in 1-2 years so that's not far away in stock market terms but I'd rather take the chance on the market than leave it in cash.

I agree about the need for a buffer but I've got one month of mortgage payment overpaid (which anyway saves more interest than I could earn in an easy access account) and three months' notice at my job so that in itself seems like enough. 

ratechaser

Definite sense of deja vu with this thread, I'm sure there was another near identical one last year (or earlier this year, I'm losing my sense of time after 9 months of working from home!).

There is no right or wrong answer here, it's a personal choice of risk/reward (and basic availability of funds to set aside of course...) I've reduced my cash holdings over the last 12 months with the reduction in interest rates, and it's now a very small percentage of my family's total assets, but still a very decent emergency buffer for pretty much any scenario I can think of. 

My kids have more in cash than I do, but I can only dream of the interest rates they are getting!

tomla

Surprised by the number of people who have said they use stoozing or 0% credit cards as part of their "cash" mix or simply their emergency fallback. Seems as volatile as the risk of investments being at the wrong point of the cycle to want to withdraw. 

"I can always get credit" - apart from when you really need it.

Bravepants

tomla said:

Surprised by the number of people who have said they use stoozing or 0% credit cards as part of their "cash" mix or simply their emergency fallback. Seems as volatile as the risk of investments being at the wrong point of the cycle to want to withdraw. 

"I can always get credit" - apart from when you really need it.

I've had a Natwest current account since I was about 16, but I have not been using it for a few years apart from recently when I started paying in some income from Investment Trusts, and I use the account for income smoothing. I had an overdraft facility of £4300 in that account (which, being an MSE I never used of course ). However, I noticed the other day that Natwest has dropped my overdraft facility to £900. My day-to-day account is with another bank, into which I pay my monthly salary and have done for years, and it has an OD facility of £200 and always has! So, indeed credit can be removed/reduced at any time.