Savings advice - ISA/SAS ISA/easy access savings account

bjones43

Hi, I’m hoping for a bit of savings advice.
I have around £45k in my HSBC current account, which I want to move asap.
I was thinking around £15k in an easily accessible savings account (I got a Santander saver last year when it was above 5%, it’s now 4%) , for any unexpected bills.
£20k in Cash ISA (Trading212 4.9%?) and then putting the rest on a trading platform either a DIY, and learn as I go or use a global tracker.

A bit of info for context:
Basic rate income tax, as is my wife.
Work pension.
Family of 4 (children are 9 and 7)
Mortgage 5yr fixed rate (1.69 with Barclays) will finish in August with around £65k left. Overpaying by £100 a month.
No other debt (no credit cards)
Our income is enough to pay bills etc but we don’t end up with much additional savings at the end of each month. 


I’m new to ISA’s and S&S ISA’s and also trading accounts so any help in that area in particular would be great!

Archerychick

With your mortgage rate being so low, have you thought about putting your £100 into a savings account each month and then making a lump sum payment at the end of the term? You’ll earn more in interest than you’ll save by putting it straight against the mortgage.

You each have £20k isa allowance per year, so if Neither have been used you could put £40k into an isa which would mean it’s sheltered from tax on the interest.

to give any other suggestions it would be an idea to get an understanding of what the money is for, is there a plan for its use?

jimjames

bjones43 said:

Hi, I’m hoping for a bit of savings advice.
I have around £45k in my HSBC current account, which I want to move asap.

Our income is enough to pay bills etc but we don’t end up with much additional savings at the end of each month. 

If your income isn't enough to build savings, was the £45k an inheritance or has it built up over time? It's just having that sort of sum in a current account would suggest that there is more available if it was just from income.

It would probably make sense for the £20k to be in a S&S ISA rather than cash ISA as that will give better tax protection long term. But you could add £20k now and £20k in April to ISAs. I guess the main thing is to get it earning interest asap as that will be £150 or so each month that you don't get now. Also consider whether pension is an option although that's less beneficial as a basic rate taxpayer.

bjones43

Hi jimjames, thanks for the comments- The money was a family gift, It’s been transferred to my current account but keen to get it earning. I’ll have a look at S&S ISAs, any you recommend?

bjones43

@Archerychick - Good idea about the mortgage overpayments. Once I put £20k into an ISA I don’t think we will go over the £1000 interest limit, and I would like to have some money accessible, just in case. The money isn’t necessarily for anything, as such, I think financially we are okay. I would just like to look into the best ways to invest it. It also seems to be a good opportunity to invest in S&S and learn more about that.

AlanP_2

Give some thought to timescale. S&S investments should be thought of as 10 years plus ideally to be virtually guaranteed to be worth more than now as markets move around (even though trend is definitely upwards).

Wha about your wife's pension?

Archerychick

bjones43 said:

@Archerychick - Good idea about the mortgage overpayments. Once I put £20k into an ISA I don’t think we will go over the £1000 interest limit, and I would like to have some money accessible, just in case. The money isn’t necessarily for anything, as such, I think financially we are okay. I would just like to look into the best ways to invest it. It also seems to be a good opportunity to invest in S&S and learn more about that.

That £100 per month would feed nicely into a regular saver, top% is 8% at the moment - https://moneyfactscompare.co.uk/savings-accounts/regular-savings-accounts/?quick-links-first=false&product-favorites-first=false&sort-order=AER&sort-order-text=Rate

Albermarle

and then putting the rest on a trading platform either a DIY, and learn as I go or use a global tracker.

Most people lose money trading, so unless you really, really know what you are doing, then best avoided.
Stick to mainstream regular investments, like Global trackers, or multi asset funds to reduce the volatility a bit.

I’ll have a look at S&S ISAs, any you recommend?

If you look through this forum and the ISA sub forum, you will see lots of threads about this.
For example
S&S Isa - Best platform with low fees — MoneySavingExpert Forum

bjones43

That’s great advice, thanks @Albermarle @AlanP_2 & @Archerychick
I think the best for me seems to be to get a cash ISA for £20k and put the rest in a regular savings account.
While I see the appeal of increasing the pension pot, I don’t want to lock the money away.