What would you do with surplus

Jon5321

Ive already topped up my work place pension but dont want to use all my surplus on pension because I wont be able to access it till im 57. Im 42 with no mortgage and no debt.

So the question im asking is what would you do with £500 + surplus each month? Is there like a savings account were it takes a dd each month but its locked for 5 years and no withdraals allowed as I want it to build up.

 

thank you

george4064

Setting up regular saver(s) is probably your best bet

xylophone

https://www.moneysavingexpert.com/savings/best-regular-savings-accounts/

wmb194

Jon5321 said:

Ive already topped up my work place pension but dont want to use all my surplus on pension because I wont be able to access it till im 57. Im 42 with no mortgage and no debt.

So the question im asking is what would you do with £500 + surplus each month? Is there like a savings account were it takes a dd each month but its locked for 5 years and no withdraals allowed as I want it to build up.

 

thank you

Does it have to be a savings account? Does it have to be locked up? If you already have rainy day cash saved I’d invest it in e.g., a world tracker ETF via a cheap stockbroker like Trading 212.

Jon5321

wmb194 said:

Jon5321 said:

Ive already topped up my work place pension but dont want to use all my surplus on pension because I wont be able to access it till im 57. Im 42 with no mortgage and no debt.

So the question im asking is what would you do with £500 + surplus each month? Is there like a savings account were it takes a dd each month but its locked for 5 years and no withdraals allowed as I want it to build up.

 

thank you

Does it have to be a savings account? Does it have to be locked up? If you already have rainy day cash saved I’d invest it in e.g., a world tracker ETF via a cheap stockbroker like Trading 212.

Doesnt have to be a savings acount and I have a rainy day lump sum saved .

GazzaBloom

The answer for where to save money always lies in when you want to spend the money, saving and investing is simply deferring consumption today for hopefully increased consumption in the future.

You have already suggested you want to access it before retirement, so when is that, in 5 years? I use this as a rule of thumb:

• Within 1 year - hold as cash in you current account or cash ISA
• 2-5 years Cash ISA or fixed term savings
• 5-10 years...trickier as some may see that as too short for investing but I would personally put it in a stocks and shares ISA and a low cost equity tracker
• 10+ years plus - invest in equities, a low cost index tracker fund.

Bostonerimus1

1) Pay down high interest debt
2) Save one year's spending into a bank account or cash ISA
3) Contribute to a stocks and shares ISA
4) Make extra mortgage payments.

Eyeful

Remember, anything to do with money has risk attached, all that changes is the type and size of risk.

Simple rules which are easy to follow are the best.
1. Clear any high interest debt, such as credit cards first.
2. Have an emergency fund to cover car/boiler brake downs or to sell investments when markets crash etc..
3. Start a pension, where you get free money from the government & investments grow fee of tax.
4. Use ISA tax shelter for your savings & investments where possible.

5. Any money needed within 5 years should be in a bank or building society covered by the FSCS: 
 https://www.fscs.org.uk/check/check-your-money-is-protected/
https://www.thisismoney.co.uk/money/article-1583859/Best-savings-rates-General-savings-Internet-branch.html

6. For the long term (say over 10 years) think of putting your money into investments.
There are no guarantees, you may get back less than you put in but you hope to get out much more.
7. You can make investing as simple or as complicated as you like.
8. The investment industry likes to make it complicated, as that's the way they make money from you.
In the long term this results in a large chunk of your money/profits going into their pockets.
9. The simple approach lets you understand what's going on, puts you in control & keeps cost to a minimum.

If you want a simple buy and forget approach use a low cost passive Global Index Fund or ETF, which simply follows a major Global Index.
This will put you ahead of many active funds on sale.

If you want less risk buy a low cost passive Global Multi Asset Fund or ETF set at a share/bond split you are comfortable holding.
https://monevator.com/passive-fund-of-funds-the-rivals/

If you do think of investing watch this video first:  https://www.kroijer.com/

I hope this is of help to you.

 

Linton

S&S ISA is the best alternative for long term. A specific advantage over pensions is that they generate tax free income and so create more headroom if you are in danger of exceeding the basic rate tax band.

VNX

Bostonerimus1 said:

1) Pay down high interest debt
2) Save one year's spending into a bank account or cash ISA
3) Contribute to a stocks and shares ISA
4) Make extra mortgage payments.

The OP has no mortgage or debt.

Bostonerimus1

VNX said:

Bostonerimus1 said:

1) Pay down high interest debt
2) Save one year's spending into a bank account or cash ISA
3) Contribute to a stocks and shares ISA
4) Make extra mortgage payments.

The OP has no mortgage or debt.

Well that makes things easy then - options 2) and 3) although making extra pension contributions would probably be the most tax efficient thing to do.