Getting FIREd up 😀

edinburgher

Is LISA included in the £20k and if so, do you still fill this first?

QueenJess

Ok, then in that case it depends on your aims in life. Yes, you should take tax breaks where you can, but equally it shouldn’t be the only thing driving your decisions.

What are you actually saving money for? You could put more into pension and therefore retire earlier than planned (as long as it isn’t before the age of 57 of course). If retirement is the main thing you are saving for of course.

If you are saving up cash for something then premium bonds are probably the best bet. You can still do regular savers etc before feeding into there to make maximum use of your psa.

If you don’t need the money, then you could work less (4 day week) or go on a big holiday! It all depends on what you are hoping to achieve!

For me, I am not working more than I need to as I want to enjoy my life now. Money I save goes to pensions/retirement as I want to be in the position where I don’t need to work anymore.

South_coast

edinburgher said:

Is LISA included in the £20k and if so, do you still fill this first?

Yes and yes, Ed

Retirement before 57 is the aim, Jess, which is why I should be favouring S&S over pensions (once I've cleared the cards and all the "debts to self" which will accrue from clearing the cards). More into pensions is a good financial decision, but then it's locked away for too long and I get taxed on it when I finally get it. Premium bonds are obviously accessible, but I don't like the thought of not earning interest on them (and genuinely have no interest in "winning big" - what on earth would I do with it 😱???). Will be able to park some in a savings account, but can only earn £42/month in interest before being stung, so just need to keep my wits about me. 

As for what the savings are for, some do get spent! For me, savings is everything that I don't spend within the course of a month, so covers all car costs (bar fuel), holidays, service charge on the flat, setting money aside for the LISA, and of course "the other thing". So I may have a savings rate of c78% (having avoided the various money pits of kids, pets, weddings and divorces 🤣), and it does need to go somewhere, but it's by no means all being stashed for The Future!

kaycastle

I'm intrigued and think I must have missed something, what's "the other thing"??

South_coast

Ha, that's because I have never specified! Basically I may (or may not - I'm hoping not!) need to help my Mum out with money at some point, so I'm keeping a pot of cash ringfenced for that

QueenJess

If you’re saving for early retirement you could always do investments in a general S&S account. You don’t get taxed until you remove the funds and you have a £3,000 personal allowance, so if you didn’t have loads in there or didn’t need much of it, you could drip feed your money out later.

Or a mix of different things? GIA, regular savers, premium bonds?

TallGirl

I would agree with QueenJess a mixture I have held premium bonds for a while (advice from IFA) while waiting to buy another house. You do need a decent amount in there to win every month but it is as flexible as a savings account as you can take the money in and out as you need it within days. I like opening the app every month to see if I have won currently I am just below the advertised rate and I have stopped adding but if the rates drop lower again and I need money in cash I will top up to avoid the tax. 

South_coast

Thanks both, that's useful to know about the £3k allowance on the GIA. Good to know 27/28 SC has options!

Must stop getting ahead of myself though, first priority is getting out of debt 🤦‍♀️!

LadyWithAPlan

The £3k is capital gains tax 
the current yearly threshold - so if you bought normal S&S not in a tax wrapper and then had big profits you could sell and actualise  up to £3k profit before tax .. Obviously CGT rates will change (they were £12k not so long ago !)

South_coast

Aaahhh, so I'd need to keep records of buy/sell prices/dates as well? Premium bonds are looking like the most straightforward option then, but the lack of a guaranteed return is annoying!