What to do with £38k savings

jt1413

Hi everyone, 

My husband and I find ourselves with just over £38k in savings, currently in an easy access savings account at 4.6%. 

We haven't really put too much thought into what to do with it, but now that we're looking to grow our savings etc I'm wondering how best to make this amount work for us? 

Any advice welcome

lr1277

Is that your only savings? What if any other savings do you have? How close are you to retirement? Are your income sources secure to the best of your knowledge?

Conventional wisdom suggest you have 3 separate savings pots:

1) Short term emergency savings. Usually 3-6 worth of salary or expenses in an instant access account as an emergency fund.

2) Medium term savings for things you might want to buy in 5 years time say a car or some other big expense.

3) Long term savings like pensions.

jt1413

lr1277 said:

Is that your only savings? What if any other savings do you have? How close are you to retirement? Are your income sources secure to the best of your knowledge?

Conventional wisdom suggest you have 3 separate savings pots:

1) Short term emergency savings. Usually 3-6 worth of salary or expenses in an instant access account as an emergency fund.

2) Medium term savings for things you might want to buy in 5 years time say a car or some other big expense.

3) Long term savings like pensions.

Yes that is all of our savings - we ard both late 20s so a good way to go until retirement. Currently have a mortgage with 200k left on it but no other debts or finance. 

We are both NHS, so are jobs are as secure as the NHS is, would you suggest a private pension in addition to the NHS ones? 

Cisco001

Cash ISA?
What is your mortgage rate? Consider overpaying if the rate is over 4.6%.

lr1277

Hmm I used to be in the NHS. I started on the defined benefit scheme, but due to a change of employer (without my knowledge or consent) I got put into a money purchase scheme.

My job was in the admin side and I did get made redundant. So it is not impossible, especially if your particular skill set is not required after a change of government.

I have been out of the NHS for 10 years now. But am guessing you are on the new money purchase scheme? Feel free not to answer that particular question.

I think you might be better off asking the pensions question on the pensions board as I am certainly not an expert.

Edited to add If you can afford it, chuck as much money as you can into whichever types of saving: long, medium or short term. Others maybe along who can provide more information.

For full information, I was permanent but then got made redundant in 2010 after the cutbacks made by the coalition. I was then asked back but as bank staff working directly for the hospital. So I stayed in the final salary scheme. But like I said without my knowledge and consent, the bank staff were moved to NHS Professionals who operated a defined contribution/money purchase scheme.

Albermarle

jt1413 said:

lr1277 said:

Is that your only savings? What if any other savings do you have? How close are you to retirement? Are your income sources secure to the best of your knowledge?

Conventional wisdom suggest you have 3 separate savings pots:

1) Short term emergency savings. Usually 3-6 worth of salary or expenses in an instant access account as an emergency fund.

2) Medium term savings for things you might want to buy in 5 years time say a car or some other big expense.

3) Long term savings like pensions.

Yes that is all of our savings - we ard both late 20s so a good way to go until retirement. Currently have a mortgage with 200k left on it but no other debts or finance. 

We are both NHS, so are jobs are as secure as the NHS is, would you suggest a private pension in addition to the NHS ones? 

If you stay with the NHS, you will have a very good pension, much better than most people, so you have got this base covered.

So knowing you have a secure job and the pension is sorted, then to modify slightly what a previous poster said.

Easy access savings to cover emergencies, holiday fund etc  - maybe £5K to £10K

Then after that you have a choice of fixed term savings accounts for 2, 3, 5 years, or if you think you will not need the money for longer, then that you could look at investing in a Stocks and shares ISA.

Or you could pay down some of the mortgage. If you have a low interest rate this may not be such a good idea, but if it is higher it could be.

jt1413

Cisco001 said:

Cash ISA?
What is your mortgage rate? Consider overpaying if the rate is over 4.6%.

At what point would you say put into a cash ISA? Sorry if I sound dumb, we don't currently pay tax on our interest so would you say Cash ISA only when we will then be taxed?

Our interest rate is 4.68%, due to remortgage in Spring 2025.

jt1413

lr1277 said:

Hmm I used to be in the NHS. I started on the defined benefit scheme, but due to a change of employer (without my knowledge or consent) I got put into a money purchase scheme.

My job was in the admin side and I did get made redundant. So it is not impossible, especially if your particular skill set is not required after a change of government.

I have been out of the NHS for 10 years now. But am guessing you are on the new money purchase scheme? Feel free not to answer that particular question.

I think you might be better off asking the pensions question on the pensions board as I am certainly not an expert.

Edited to add If you can afford it, chuck as much money as you can into whichever types of saving: long, medium or short term. Others maybe along who can provide more information.

For full information, I was permanent but then got made redundant in 2010 after the cutbacks made by the coalition. I was then asked back but as bank staff working directly for the hospital. So I stayed in the final salary scheme. But like I said without my knowledge and consent, the bank staff were moved to NHS Professionals who operated a defined contribution/money purchase scheme.

We are both on the 2015 scheme (defined benefit) and both are AHP. Might still be good to ask the pensions board, as I know its meant to be a good pension but we sometimes still struggle to wrap our heads around it.

Thank you.

Easyjet77

jt1413 said:

lr1277 said:

Hmm I used to be in the NHS. I started on the defined benefit scheme, but due to a change of employer (without my knowledge or consent) I got put into a money purchase scheme.

My job was in the admin side and I did get made redundant. So it is not impossible, especially if your particular skill set is not required after a change of government.

I have been out of the NHS for 10 years now. But am guessing you are on the new money purchase scheme? Feel free not to answer that particular question.

I think you might be better off asking the pensions question on the pensions board as I am certainly not an expert.

Edited to add If you can afford it, chuck as much money as you can into whichever types of saving: long, medium or short term. Others maybe along who can provide more information.

For full information, I was permanent but then got made redundant in 2010 after the cutbacks made by the coalition. I was then asked back but as bank staff working directly for the hospital. So I stayed in the final salary scheme. But like I said without my knowledge and consent, the bank staff were moved to NHS Professionals who operated a defined contribution/money purchase scheme.

We are both on the 2015 scheme (defined benefit) and both are AHP. Might still be good to ask the pensions board, as I know its meant to be a good pension but we sometimes still struggle to wrap our heads around it.

Thank you.

It's not "meant" to be a good pension. It IS a good pension. 

FIREDreamer

Easyjet77 said:

jt1413 said:

lr1277 said:

Hmm I used to be in the NHS. I started on the defined benefit scheme, but due to a change of employer (without my knowledge or consent) I got put into a money purchase scheme.

My job was in the admin side and I did get made redundant. So it is not impossible, especially if your particular skill set is not required after a change of government.

I have been out of the NHS for 10 years now. But am guessing you are on the new money purchase scheme? Feel free not to answer that particular question.

I think you might be better off asking the pensions question on the pensions board as I am certainly not an expert.

Edited to add If you can afford it, chuck as much money as you can into whichever types of saving: long, medium or short term. Others maybe along who can provide more information.

For full information, I was permanent but then got made redundant in 2010 after the cutbacks made by the coalition. I was then asked back but as bank staff working directly for the hospital. So I stayed in the final salary scheme. But like I said without my knowledge and consent, the bank staff were moved to NHS Professionals who operated a defined contribution/money purchase scheme.

We are both on the 2015 scheme (defined benefit) and both are AHP. Might still be good to ask the pensions board, as I know its meant to be a good pension but we sometimes still struggle to wrap our heads around it.

Thank you.

It's not "meant" to be a good pension. It IS a good pension. 

Understatement of the year!