Do I need some financial guidance?

madlyn

I've always been quite a good saver, which is something that was instilled in me by my parents.
But i've spent a bit of time looking at my savings and investments and I'm wondering if I need some guidance rather than just putting money away each month in various accounts?

So this is me.

48 years old, homeowner with no children.
I over pay my mortgage by £60 each month.
Pay into my work pension 5%, I think the maximum is 6%
£20 a month into an old work pension with Aegon, just to keep it ticking over.
£20 a month into each of the following, Marcus and Coventry building society EA accounts and a nationwide start to save issue 2
£10 a month into a vanguard SIPP and S&S ISA
I also have a nationwide ISA with a small amount in, just to keep the account open if needed.
I also do the MSE £2 savers club and SPC.

My home is a shared ownership property, so once my mortgage is paid off, I will still have a rent to pay each month to the housing association. And I have around 9k left on my mortgage.

ColdIron

madlyn said:

Pay into my work pension 5%, I think the maximum is 6%

Do you mean that your employer matches your contribution to a maximum of 6%?

If you you should up that contribution for the free money

madlyn

ColdIron said:

madlyn said:

Pay into my work pension 5%, I think the maximum is 6%

Do you mean that your employer matches your contribution to a maximum of 6%?

If you you should up that contribution for the free money

No, My employer only matched it to a maximum of 4%, I can pay a maximum of 6%.

Sg28

What rate is your mortage currently? It would probably be worth putting that £60 a month i to a regular saver instead. 

smithers1981

Any debts? What’s mortgage rate? If lower than savings interest be better to save £60 a month as opposed to overpaying mortgage.

tou seem to be spraying money all over the place I would want to simplify especially easy access savings.

open a Tandem easy access savings account currently highest rate available at 5% move all easy access savings into that.

Not an expert on pensions but would personally put in max available.

madlyn

Sg28 said:

What rate is your mortage currently? It would probably be worth putting that £60 a month i to a regular saver instead. 

My mortgage rate is around 5.4%.

DeLaSole

Hi madlyn,

If you're getting the max contribution from your employer into your pension, great. By putting together a basic retirement plan with your goals - when you want to retire and your lifestyle cost pa - what you need to be doing in your pension saving to achieve your goal can be worked out and then you'll know if you're currently on track. If not already done, check what your state pension forecast is showing. 

On the cash side of things, if you have built an emergency fund (say 6 months of living costs) then I would put in the highest % instant access. If not, I would build one as a safety net. Thereafter, I would then identify what any further cash saving is actually for. If you find it's been sitting there year after year then its spending power has been eroded by inflation. Could this cash be being used to improve your personal pension provision, for example?

As there's no mention of high-interest debt, like credit card debt, I've assumed there is none to be clearing. On the mortgage overpayment, it would have to be calculated whether that's the right thing to do or not financially, though even if there's some gain from saving over repaying, I understand some people still prefer to clear their mortgage.

Best wishes.

madlyn

DeLaSole said:

Hi madlyn,

If you're getting the max contribution from your employer into your pension, great. By putting together a basic retirement plan with your goals - when you want to retire and your lifestyle cost pa - what you need to be doing in your pension saving to achieve your goal can be worked out and then you'll know if you're currently on track. If not already done, check what your state pension forecast is showing. 

On the cash side of things, if you have built an emergency fund (say 6 months of living costs) then I would put in the highest % instant access. If not, I would build one as a safety net. Thereafter, I would then identify what any further cash saving is actually for. If you find it's been sitting there year after year then its spending power has been eroded by inflation. Could this cash be being used to improve your personal pension provision, for example?

As there's no mention of high-interest debt, like credit card debt, I've assumed there is none to be clearing. On the mortgage overpayment, it would have to be calculated whether that's the right thing to do or not financially, though even if there's some gain from saving over repaying, I understand some people still prefer to clear their mortgage.

Best wishes.

My state pension forecast show that I am on track to receive the full state pension.
And other than my mortgage I have no other debt.

Alfrescodave

madlyn said:

Sg28 said:

What rate is your mortage currently? It would probably be worth putting that £60 a month i to a regular saver instead. 

My mortgage rate is around 5.4%.

When is your renewal date for your mortgage? Are you overpaying the maximum amount or can you overpay more. At 5.4% I would be looking to max overpayment and clear your mortgage asap.

Albermarle

My employer only matched it to a maximum of 4%, I can pay a maximum of 6%.

It is unusual for employee contributions to be restricted to a maximum %. Are you sure about that ?

Ideally you should be adding more than that but with the high % rate on your mortgage, might be better to focus more on that.

madlyn

Albermarle said:

My employer only matched it to a maximum of 4%, I can pay a maximum of 6%.

It is unusual for employee contributions to be restricted to a maximum %. Are you sure about that ?

Ideally you should be adding more than that but with the high % rate on your mortgage, might be better to focus more on that.

It is correct, its down to the fact that the more staff contribute, it risk putting them below the minimum wage.