Annual Decision on Savings!

Ljc80_2

My 1 year fixed ISA (wish I had gone for 2 year !)  is ending in April (1.35 Kent reliance) so i need to make a decision with what to do with savings currently of between 70-80k.
Obviously compared to this time last year ISA rates are miniscule.
I have 2 mortgages currently. Main one 30k, second taken for a loft conversion 14k - both on low tracker rates.
I do still like the security of an ISA, all in one place and I can keep just saving into it but am conscious now that this may be the time to change tact. 
My current chain of thought is put it all into an ISA, just ignore the crap rates, and start overpaying £1k per month on the mortgages instead of increasing saving pot.
Does this sound sensible?

MX5huggy

Tempting to pay off the mortgage (penalties to be considered). £70k in cash is quite high IMO, consider Pension, investing in a S&S ISA, premium bonds. 

Ljc80_2

Thanks you for replying. 
Mortgages have no penalties for overpayments so doing that/paying off are options.
I know embarrassingly little about pensions. I have been paying an employee standard life one for the last 6 years with contribution from employer.
Why i have been using an ISA for this same period for saving is zero risk

colsten

In a cash ISA, your risk is inflation, as you are experiencing now. The lower than inflation interest rates are eroding the buying power of your money

MaxiRobriguez

Ljc80_2 said:

Thanks you for replying. 
Mortgages have no penalties for overpayments so doing that/paying off are options.
I know embarrassingly little about pensions. I have been paying an employee standard life one for the last 6 years with contribution from employer.
Why i have been using an ISA for this same period for saving is zero risk

Time to spend some time learning about your pension.

In £ terms it's almost always better to pay into pension than overpay mortgage or save.

Albermarle

Pensions & Investing - MoneySavingExpert
Time to start a learning journey .

Ljc80_2

Thanks, I will start reading up!
For the immediate future my mortgages provide flexibility with no overpayment fees so i wont tie up savings in a fixed ISA so I have flexibility to move things about as need be when i look into the pension side of things.

DrSyn

Ljc80_2 said:

Why i have been using an ISA for this same period for saving is zero risk

Where money is concerned there is always risk. Its just the size and type of risk that changes. With a cash ISA, the risk is inflation. This is where if you put £100 into it at the start of the year by the end of the year your £100 buys you less goods than it did at the start of that year. Back in the 1970's before Thatcher came to power inflation reached about 27%. Which is an large amount of purchasing power to lose! 

Ljc80_2

It seems my pension is Standard Life Passive Plus III Pension Fund - workplace scheme
Currently with about £26.5k in it
Is this a fairly safe pension? I've had it 5 years and I remember when I took it out I was advised it was fairly low risk
I see I can top it up with deposits which offer tax relief. Given I pay tax monthly do I get any of that back if I make a payment to it from savings?
Sorry if these are very basic questions, if they should be in a different forum let me know.

Thanks

MX5huggy

I presume this is a company pension, did/do you have any choice over the funds it’s invested in? Are you taking advantage of all the pension that they company offer, they might say we will match all payments between 5 and 10% of Salary that employees make that could be free money you are missing out on if you only make the 5%. They might also offer AVC’s (additional voluntary contributions).  Where you save tax an NI payment. If none of this applies then you need to decide if you want a separate pension because you want to invest differently or add money to what you have as it’s easy and you are happy with that option. When you pay into a pension you don’t get the tax back but the saved tax is added to the pension. So you add £100 to the pension but this shows as £120 invested (simplified example). 

I would up my monthly pension contribution from my salary and live off the savings until the savings were reduced to a level you are happy with. 

There’s a pension forum below this one where you will get better advice (or the chuntterings of random internet people, depending on how you view it).

rjmachin

Ljc80_2 said:

It seems my pension is Standard Life Passive Plus III Pension Fund - workplace scheme
Currently with about £26.5k in it
Is this a fairly safe pension? I've had it 5 years and I remember when I took it out I was advised it was fairly low risk
I see I can top it up with deposits which offer tax relief. Given I pay tax monthly do I get any of that back if I make a payment to it from savings?
Sorry if these are very basic questions, if they should be in a different forum let me know.

Thanks

I make additional payments in to my pension via Direct Debit as well as my normal contribution through PAYE with my employer.
My direct debit is set to £150, which leaves my account each month.  The pension company (Aegon) then does the tax relief for me and £187.50 gets added to my pension account each month.  I don't have claim anything to get tax back.