10k savings, what to do?

twirlgirl

Hello. I was wondering if I could get any pointers on saving vs investing please? I have 10k saved, not for anything in particular, just because I felt like to should start something, and it is sat in my current account.

I intend to keep on saving, and know how much I can put aside on a regular basis. So is this the best way forward, to just keep adding to it? Or should I split the money into other accounts, or invest? I have read around the site, but would like some real world examples and advice if possible please. Many thanks.

eskbanker

It's typically recommended on here to have readily accessible savings as a rainy day or emergency fund, to cover living costs in the event of job loss or serious health problem or one-off unplanned events like replacing boiler, etc - the rule of thumb is that this should be something like six months worth of your typical expenditure but opinions vary.

With savings rates being generally poor at the moment, you could do worse than bunging the £10K into premium bonds rather than traditional savings accounts.

There are regular saver accounts suited for the monthly contributions, that pay better interest than those for lump sums.

https://www.moneysavingexpert.com/savings/which-saving-account/
https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/
https://www.moneysavingexpert.com/savings/best-regular-savings-accounts/
https://www.nsandi.com/products/premium-bonds

Once you've built up enough in cash savings, then if there's surplus money that you're confident you won't need access to for many years, then investing may be appropriate at that stage....

sevenhills

£10,000 is a sizable sum of money, if you don't want to spend it, what have you in mind for its future?

Perhaps if you are 40+ a pension(SIPP) would be the right place for it, if you are 20+ perhaps it will become a deposit for a house?

twirlgirl

sevenhills said:

£10,000 is a sizable sum of money, if you don't want to spend it, what have you in mind for its future?

Perhaps if you are 40+ a pension(SIPP) would be the right place for it, if you are 20+ perhaps it will become a deposit for a house?

I'm 42. I hadn't thought of putting it in a pension. I have lots of different pensions with various amounts in, but I guess a pensions advisor is the best bet for that.

Brricktop69

Do you have any debt or mortgage?

Alexland

sevenhills said:

£10,000 is a sizable sum of money

Is it? Seems like a reasonable cash float or emergency pot to me. Of course some people have more or less depending on income security, outgoings, likely expenses, etc.

twirlgirl said:

I'm 42. I hadn't thought of putting it in a pension. I have lots of different pensions with various amounts in, but I guess a pensions advisor is the best bet for that.

Do you already have an emergency pot as described by eskbanker? If that is covered and you are looking to invest then if you are happy not to have access until retirement then a pension may be suitable. Do you have access to a workplace pension and if so could you make higher contributions?

sevenhills

Alexland said:

Seems like a reasonable cash float or emergency pot to me. Of course some people have more or less depending on income security, outgoings, likely expenses, etc.

Almost a years wage to me. It would take me a minimum of 3 years to save £10,000

Alexland

sevenhills said:

Almost a years wage to me. It would take me a minimum of 3 years to save £10,000

Wow that is tough - and to save that would require an extremely low cost lifestyle.

twirlgirl

Brricktop69 said:

Do you have any debt or mortgage?

No debt, but yes to a joint mortgage

twirlgirl

twirlgirl said:

I'm 42. I hadn't thought of putting it in a pension. I have lots of different pensions with various amounts in, but I guess a pensions advisor is the best bet for that.

Do you already have an emergency pot as described by eskbanker? If that is covered and you are looking to invest then if you are happy not to have access until retirement then a pension may be suitable. Do you have access to a workplace pension and if so could you make higher contributions?

I have a current work place pension, and 6 or 7 dormant pensions, with varying amounts in. Need to speak to an advisor about which is the best one to put more money into

Thrugelmir

twirlgirl said:

Brricktop69 said:

Do you have any debt or mortgage?

No debt, but yes to a joint mortgage

Any plans to move? 

Would reducing the mortgage debt owed move you into a lower LTV band at the next switch of product? 

Have you reviewed your various pension pots and determined whether it's worth consolidating them. Or moving them to a lower cost provider.