What to do with 5k savings a year

kimwp

In the very fortunate position that I'm going to be saving approx £25-26k each year, outside pension contributions. I don't want to increase my pension contributions and my emergency fund cycles through all the fixed 6%+  regular savings available to me. My plan is to put 20k into a stocks and shares ISA/LISA combination, so I'm thinking about what to do with the remainder - what's a sensible, tax efficient, lucrative thing to do with the 5-6k?

QrizB

kimwp said:

In the very fortunate position that I'm going to be saving approx £25-26k each year, outside pension contributions. I don't want to increase my pension contributions and my emergency fund cycles through all the fixed 6%+  regular savings available to me. My plan is to put 20k into a stocks and shares ISA/LISA combination, so I'm thinking about what to do with the remainder - what's a sensible, tax efficient, lucrative thing to do with the 5-6k?

Do you have a husband or wife who could put it into their SSISA?

kimwp

QrizB said:

kimwp said:

In the very fortunate position that I'm going to be saving approx £25-26k each year, outside pension contributions. I don't want to increase my pension contributions and my emergency fund cycles through all the fixed 6%+  regular savings available to me. My plan is to put 20k into a stocks and shares ISA/LISA combination, so I'm thinking about what to do with the remainder - what's a sensible, tax efficient, lucrative thing to do with the 5-6k?

Do you have a husband or wife who could put it into their SSISA?

No. I have parents though...

Albermarle

Have you any cash savings?
Even if you have, then adding £5K pa to them would not be a bad move.
You can get up to 5%, which is twice the rate of inflation and 100% secure.

Bostonerimus1

Most tax efficient thing to do with the extra is to make extra pension contributions...why don't you want to do that? I assume you have a good cash buffer that easily accessible and don't have any high interest debt because that should be paid off.

kimwp

Bostonerimus1 said:

Most tax efficient thing to do with the extra is to make extra pension contributions...why don't you want to do that? I assume you have a good cash buffer that easily accessible and don't have any high interest debt because that should be paid off.

My annual spend is £12k pa not including white goods/car replacement/holidays and my pension pot is currently 360k with 18 years to go until I can access it, and I'll be adding to it with AVCs until a pot of 680k is projected with a 3% real return (and then drop down to whatever is matched). So I think if I add more to it, I'll be dying with money in the bank. I'd rather have it now and use it for financial independence.

Only debt is 0% borrowing which is in savings accounts.

Cash buffer of 1-2 years (not actually that much given my low outgoings).

eskbanker

To be fair, you did ask about three potentially contradictory drivers, so perhaps need to consider their relative prioritisation!

kimwp said:

what's a sensible, tax efficient, lucrative thing to do with the 5-6k?

Alexland

If you've used your ISA allowance and don't want to put it in pensions have you considered Premium Bonds?

kimwp

eskbanker said:

To be fair, you did ask about three potentially contradictory drivers, so perhaps need to consider their relative prioritisation!

kimwp said:

what's a sensible, tax efficient, lucrative thing to do with the 5-6k?

I love your profile photo, it always looks like you're sighing in frustration while you post 😄

I guess it's really, what will result in the largest pot of money?

Alexland

kimwp said:
I guess it's really, what will result in the largest pot of money?

Using a general investment account to invest in something different* each year that is very risky and obscure that happens to perform extremely well such that you have such an amazing return that the tax implications don't matter.

*crystal ball required.

eskbanker

For someone already happy to invest within an ISA, and with further funds available outside that, but no desire to lock away until pension age, investing within a GIA ought to suffice - a crystal ball would obviously help but even mainstream global equity trackers or multi-asset funds should do the job over the long term, especially if rotating between products annually to crystallise CGT gains.