Investment advice, please.

ljohns

My current situation is- 
I'm 43
Employed as a teacher with 15 years of paying into a teachers pension. 
House worth £280k with £95k outstanding on the mortgage (11 years left to pay)
Approx 12k in a 4.1% savings account
Approx £1.5k in a junior ISA (Nutmeg stocks & shares) in which I pay my son's Child benefit. 
Between now and Aug I'm going to have £1000 a month to save but that will stop in Aug and revert back to £300 a month. 

I'm looking to gain so advice from those of you who have more experience than me. I've worked really hard to build those savings and I support myself financially. How can I best maximise the next 6 months when I'm going to have a substantial monthly amount to save? I won't have this opportunity again so I want to make it count. 

Also, my current savings- would I be best to split them and put say half into investments? 

El_Torro

One important thing to decide is how much cash you want to hold (typically called an Emergency Fund). Everyone needs to decide their own figure, though the conventional wisdom is that you should hold enough cash to cover between 3 and 6 months worth of expenses. Is £12k enough? Is it too much?

Even if you keep all your £12k in cash you could make it work harder than it currently is. 4.1% isn't bad, though you could be getting 5% elsewhere. If you're a 40% tax payer then you're getting close to paying tax on your interest, remember you can get tax free savings in the form of Premium Bonds (not really recommended if £12k is all the cash you have) and Cash ISAs. 

Do you know when you plan to retire? Does it align with when your teacher's pension is going to pay out? Will the monthly income be enough to give you a comfortable retirement? If not you might want to overpay your pension or pay into a private pension / SIPP.

If you want some investments outside of a pension then a Stocks & Shares ISA is a good option.

jimjames

You can improve your 4.1% interest rate by 25% by moving that to another bank paying over 5%. 

It really depends what the money is for to determine the best place for it. You don't mention ISAs for yourself so if you aren't able to pay more pension then S&S ISA might be an option to start looking at investments. That assumes £12k is a suitable amount for an emergency fund for you.

Brie

Do you have any debts on which you are paying interest?  Any thing that is charging you - credit card, overdraft - should be stomped on and that will then allow greater freedom in the future.  

And what's the interest on your mortgage?  Taking £6k off your mortgage (assuming the interest is higher than your savings acct) would be a very positive step. 

If the interest is still quite low then why not look for a higher rate interest account and accumulate a chunk to reduce the mortgage come renewal time.  Is there a regular savings account where you could put £300 a month for the next year and another place you could put the other £700 for the 6 months??

Reading between the lines - if you are a single parent with a young child then I'd suggest you have to be somewhat risk averse so I'd be leaning to simple savings techniques rather than investments.  

ljohns

That's all really useful, thank you. 
To answer some of the questions-
my mortgage is currently fixed at 4.8% until 2025 and I had been toying with saving a lump sum to pay into that when I re-mortage. 
I don't have any debt at all, other than my mortgage. 
retirement- I'm meeting an IFA (arranged by my union so specialising in teachers pensions) next week to look at that in detail and I think I'll increase my pension payments. 
I'd like to keep 7k in cash for emergencies, so maybe transfer 5k to S&S ISA and between now and Aug put £1k into a high interest account, then leave it there to pay towards the mortgage. 

jimjames

ljohns said:

I'd like to keep 7k in cash for emergencies, so maybe transfer 5k to S&S ISA and between now and Aug put £1k into a high interest account, then leave it there to pay towards the mortgage. 

Any reason you don't want to put the whole £7k into a high interest account? Seems a bit pointless to get less interest than you can. The 5% accounts mentioned are all instant access so you aren't restricting when you can get the money.