Good rule of thumb on how much to invest/save?

Thatsthespirit

Hey , I’ll try and keep this short. 

For example, 
£1700 monthly take home...
£1000 mandatory outgoings (includes food, haircut)
Leaves with £700 essentially for leisure/savings/car repairs etc but how much of that is best to put away without selling myself short?
ive just paid off my debts and long terms plans are really just to buy a house - looking at 3-5 years. Our company has a shares scheme im looking to invest as much as possibly in 

grumiofoundation

If you are looking to buy a house the best place to save will in all likelihood be a lifetime ISA (25% from government). 
https://www.moneysavingexpert.com/savings/lifetime-isas/

If you are looking to buy a house in 3-5 years time then investing is pretty risky. Are you willing to run the risk of having less money in 3 years than you do today? Or seeing your deposit drop by 20+% just as you start to look for properties? 

JohnWinder

Thatsthespirit said:

Our company has a shares scheme im looking to invest as much as possibly in 

The only problem with that is that if your company gets into trouble both your income from employment and all of this 'as much as possible' investment are at risk.

As well, so that's two problems, you forgo the benefit of diversification in your investments. But, if you're not unlucky you could be on a winner. How much do you trust to luck?

Albermarle

As above - a cash Lisa for saving towards a house deposit ( max £333 a month )
You should build up an emergency cash savings fund = to minimum 3 months living expenditure .
For the long term, you should consider contributing more to your workplace pension than the minimum, if/when you can afford it.
I would limit investment into the company share scheme.

Thatsthespirit

JohnWinder said:

Thatsthespirit said:

Our company has a shares scheme im looking to invest as much as possibly in 

The only problem with that is that if your company gets into trouble both your income from employment and all of this 'as much as possible' investment are at risk.

As well, so that's two problems, you forgo the benefit of diversification in your investments. But, if you're not unlucky you could be on a winner. How much do you trust to luck?

Hiya, so the company is a utilities company and a bonus of this scheme is if the shares ever drop you just get back what you’ve put in. You can’t lose basically - at worst it’s just used as a savings account. 

Thatsthespirit

Albermarle said:

As above - a cash Lisa for saving towards a house deposit ( max £333 a month )
You should build up an emergency cash savings fund = to minimum 3 months living expenditure .
For the long term, you should consider contributing more to your workplace pension than the minimum, if/when you can afford it.
I would limit investment into the company share scheme.

Are LISA’s fixed? If so how much do I gain from putting £333 a month in? Also, I’m not sure I’m eligible as I’ve used Help to Buy scheme in the past 

Albermarle

Suggest you read the link in Grumiofoundations post .

grumiofoundation

Thatsthespirit said:

Albermarle said:

As above - a cash Lisa for saving towards a house deposit ( max £333 a month )
You should build up an emergency cash savings fund = to minimum 3 months living expenditure .
For the long term, you should consider contributing more to your workplace pension than the minimum, if/when you can afford it.
I would limit investment into the company share scheme.

Are LISA’s fixed? If so how much do I gain from putting £333 a month in? Also, I’m not sure I’m eligible as I’ve used Help to Buy scheme in the past 

Depends what you mean by "Help to Buy Scheme" (eligibility in link). 
You can only use LISA towards a property purchase if you are a first time buyer.
Having opened/contributed/contributing to Help to Buy ISA does not make you ineligible. 

Thatsthespirit said:

JohnWinder said:

Thatsthespirit said:

Our company has a shares scheme im looking to invest as much as possibly in 

The only problem with that is that if your company gets into trouble both your income from employment and all of this 'as much as possible' investment are at risk.

As well, so that's two problems, you forgo the benefit of diversification in your investments. But, if you're not unlucky you could be on a winner. How much do you trust to luck?

Hiya, so the company is a utilities company and a bonus of this scheme is if the shares ever drop you just get back what you’ve put in. You can’t lose basically - at worst it’s just used as a savings account. 

In that case seems very attractive but obviously make sure you read all the small (and large) print! Obviously you don't want to be in a situation where you need money for a deposit and you cant get at it for some reason.
Is the money accessible at all times?
Is there a minimum period you can be invested for, what happens if you leave the company?
What is the tax treatment on any profit, on withdrawing money?

JohnWinder

Thatsthespirit said:

Hiya, so the company is a utilities company and a bonus of this scheme is if the shares ever drop you just get back what you’ve put in. You can’t lose basically - at worst it’s just used as a savings account. 

Yes, I can see why that would give one some comfort. But keep in mind that General Electric was a massive conglomerate and an investment that was above reproach for decades, but its price fell about two thirds in the last 4 years or so.

Getting just your money back is like a bond with zero yield (that's Treasury level yield these days, although you'd get any value increase); and where would employees with equity stand in the line of other creditors like banks or bond holders if things went bad enough?  Who knows, maybe your contract says, but does what you're getting compensate for the loss of diversification? Perhaps.

thegentleway

Do you pay into pension? One rule of thumb is to pay half the age you start. So if you’re 30, pay 15%.
I don’t think there is a rule of thumb for saving for a house. It’s up to you; the more aggressive you are with savings, the sooner you can buy a house. I try to save at least half my income: haircuts are not mandatory; I have clippers  

MDMD

JohnWinder said:

Thatsthespirit said:

Hiya, so the company is a utilities company and a bonus of this scheme is if the shares ever drop you just get back what you’ve put in. You can’t lose basically - at worst it’s just used as a savings account. 

Yes, I can see why that would give one some comfort. But keep in mind that General Electric was a massive conglomerate and an investment that was above reproach for decades, but its price fell about two thirds in the last 4 years or so.

Getting just your money back is like a bond with zero yield (that's Treasury level yield these days, although you'd get any value increase); and where would employees with equity stand in the line of other creditors like banks or bond holders if things went bad enough?  Who knows, maybe your contract says, but does what you're getting compensate for the loss of diversification? Perhaps.

I suspect it is a just a standard Save as you earn scheme where you pay from post tax earnings into a pot (held in a bank account your name) that at the maturity you have an option to either buy shares at a predetermined discounted option price (which you can immediately sell) or if the current price is below the option price you just get the cash back. You don’t run any financial risk (other then the funds attract 0% interest) as you don’t own the shares until maturity and can buy and sell on one day.

The plans are usually run by organisations such as Equiniti or Yorkshire Building Society and you will also probably be able to cash them in at any point. I did the same when my employer’s share price halved in March and was below the option price.

https://www.gov.uk/tax-employee-share-schemes/save-as-you-earn-saye

https://www.ybsshareplans.co.uk/employee/index.html

https://www.shareview.co.uk/4/Info/Portfolio/default/en/home/Pages/Home.aspx?wp