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pjread

Going back to OP's query though, we know they're under 40 and seem to be targetting savings for early retirement, which I'm guessing would still be 10+ years away.  So I'm not sure PB vs cash savings is the right conversation especially given inflation risk, and that over that timescale regular investment into S&S is more likely to give a better result.  For sanity, either additional pension contributions or LISA (if scheme minimum age or 60 is 'early enough'), or in an ISA if aiming for earlier would make sense to me.

jimjames

little_green said:

Albermarle said:

Money in s&s ISA is essentially for retirement/FI 

Normally contributing to a pension is better if you are saving for retirement , especially if you have earned income .
Or maybe a LISA is you are under 40 .

Could you elaborate why? 
I'm under 40. I wish to retire early so I suppose ISA is to fund me in the gap between "retirement" & pension access. 

If you're trying to bridge the gap between retirement and pension then saving in cash is a very bad idea when inflation is so much higher than the returns you're getting on savings. At least investments have a chance to grow above inflation. Investing monthly means you take advantage of any dips and don't need to worry when is a good time to invest.

little_green

jimjames said:

little_green said:

Albermarle said:

Money in s&s ISA is essentially for retirement/FI 

Normally contributing to a pension is better if you are saving for retirement , especially if you have earned income .
Or maybe a LISA is you are under 40 .

Could you elaborate why? 
I'm under 40. I wish to retire early so I suppose ISA is to fund me in the gap between "retirement" & pension access. 

If you're trying to bridge the gap between retirement and pension then saving in cash is a very bad idea when inflation is so much higher than the returns you're getting on savings. At least investments have a chance to grow above inflation. Investing monthly means you take advantage of any dips and don't need to worry when is a good time to invest.

No saving to bridge the gap is in the form of s&s ISA. I wouldn't replace s&s isa for pbs for long term saving. 
The idea of me getting pbs was essentially a holding place. IE is it more effective to hold money there instead of in a savings account (which it doesn't appear to be) I suppose I just like the thought of maybe winning big money which you don't have with it sitting in a bank account. 


LISA is coming up a lot can anyone tell me more about this. I've read about it several times over the years but usually it has turned out that avc to pension be better or more into s&s isa but now I can't remember why lol 

Emmia

Albermarle said:

I'm certain some will mock my approach as not being super MSE, but for me this gives a good balance between certainty I have access to money if I need it quickly vs. long-term investment / looking after my future self.

You have a DB pension , a S&S ISA and cash/PB savings . All sounds good to me !

You may want to think about a separate DC pension/SIPP or a LISA if you are under 40 , instead of/in addition to the S&s isa , due to the fact that pension and LISA benefit from free money in the form of tax relief /bonuses , that the ISA does not .

It depends really on what you mean by early retirement .

I'm over 40 and a home owner, so LISA isn't for me - I looked at it before I was 40, but the concept of tying up savings (even with the govt. bonus) for 20+ years didn't appeal. 

I think I'll probably hit the lifetime allowance with my DB pension - so not sure of the benefits of doing a DC/SIPP scheme as well, over the case of an S&S ISA. 

I enjoy what I do, so retirement probably at 60-65 ideally, state pension is also ticking along... 

Anyway, no desire to hijack. 

Albermarle

little_green said:

jimjames said:

little_green said:

Albermarle said:

Money in s&s ISA is essentially for retirement/FI 

Normally contributing to a pension is better if you are saving for retirement , especially if you have earned income .
Or maybe a LISA is you are under 40 .

Could you elaborate why? 
I'm under 40. I wish to retire early so I suppose ISA is to fund me in the gap between "retirement" & pension access. 

If you're trying to bridge the gap between retirement and pension then saving in cash is a very bad idea when inflation is so much higher than the returns you're getting on savings. At least investments have a chance to grow above inflation. Investing monthly means you take advantage of any dips and don't need to worry when is a good time to invest.

No saving to bridge the gap is in the form of s&s ISA. I wouldn't replace s&s isa for pbs for long term saving. 
The idea of me getting pbs was essentially a holding place. IE is it more effective to hold money there instead of in a savings account (which it doesn't appear to be) I suppose I just like the thought of maybe winning big money which you don't have with it sitting in a bank account. 


LISA is coming up a lot can anyone tell me more about this. I've read about it several times over the years but usually it has turned out that avc to pension be better or more into s&s isa but now I can't remember why lol 

I already sent you a link to read about LISA's in an earlier post.

kuratowski

Emmia said

I'm over 40 and a home owner, so LISA isn't for me - I looked at it before I was 40, but the concept of tying up savings (even with the govt. bonus) for 20+ years didn't appeal. 

I think I'll probably hit the lifetime allowance with my DB pension

If you're confident you're going to hit the Lifetime allowance, that's one of the times the (Stocks & Shares) LISA comes into its own.  Too late now...

Emmia

kuratowski said:

Emmia said

I'm over 40 and a home owner, so LISA isn't for me - I looked at it before I was 40, but the concept of tying up savings (even with the govt. bonus) for 20+ years didn't appeal. 

I think I'll probably hit the lifetime allowance with my DB pension

If you're confident you're going to hit the Lifetime allowance, that's one of the times the (Stocks & Shares) LISA comes into its own.  Too late now...

Money tied up for 20+ years was the convincing negative factor. I prefer a little more liquidity.

I seriously considered a LISA but decided against - perhaps not the "right" decision, but I'm ok with the choice.

AJ61

Any cash saving is currently losing value thanks to interest rates which are far below inflation (72 divided by your choice of net inflation rate (after interest) gives you an approximation of the number of years it will take to halve in value if that rate is maintained). Given that the best rates are still pretty awful, it makes relatively little difference where you hold cash, unless you have a lot of it. On that basis, I think it does minimal harm to hold cash as PBs compared to a "best" instant access account, if that's your inclination, and you might be lucky.

The biggest problem with the PB interest is that there is no way to know how much you will get, it all depends on luck. I've been fortunate enough to have better than average luck and over the last year the return has been about 4% on an average balance of around £20k (only 2 months without a prize and 1 month with 2 x £25 and 1 x £500). Not quite the £1M I'm hoping for, but better than a poke in the eye with a sharp stick.

Albermarle

 Not quite the £1M I'm hoping for,

The odds against winning a Million are incredibly high . Probably significantly more likely you will be hit by a meteorite .

Arthog

My Aunt had 2 Premium Bonds and she won very large prizes with both of them.