Tidying Finances

newbieni

Hi All,

I have just purchased a new home and for the first time in my adult life, I am mortgage free having used most of my savings on my new home. My finances are quite depleted and I was looking for some advice on my best next steps.

My pension pot is £100k, I contribute 12% and my employer contributes 11.5%.
I am 41 on £42,000. I have two kids, and my expenses each month will be around £700.

NatWest Current Account	£2,400.00
NatWest Regular Saver 6%	£150.00
Nationwide Current	£41.00
Premium Bonds	£1,000.00
Vanguard S&S ISA	£17,712.00	LifeStrategy® 100% Equity Fund, Last year's allowance
TSB Current	£26.00
Raison Savings 5%	£10,000.00	Not available until May
Chip Cash ISA @4.32%	£3,348.00	Last Year's allowance

Brie

Do you mean the next things you should be doing re investing??

Personally I think you should start with a budget just to see a bit more what you actually spend and have available to tuck away.  There's a link to a statement of accounts (SOA) on the debt free wannabee board.  Might be a good exercise to ensure that you know precisely what's what.  And it might give you some ideas about "oh I should set up a saving pot for XXX!"   Or maybe this isn't necessary as you're 41 and mortgage free.  Many of us that don't achieve that until we're 20 years and more older than you are!!

Does your employer have any saving plans or share purchase/save schemes?  Having the money go directly into something keeps it from being easily available in your bank account and that way you never miss the money nor have to think about it.  Similarly you might consider having regular deductions for AVCs for your work pension. 

I'm wondering why you have 3 current accounts.  Maybe it's for money managing but if you have one for day to day use and bill paying and close the others it might get you more opportunity for switching bonuses at a future date as those seem to be for new customers only.   

Do you need a new ISA or can you add to the ones you have?

Two kids?  Set up some sort of regular savings account for both to help fund uni?

what else are you looking for????

Albermarle

Regarding your workplace pension.
You are lucky to have a generous employer and adding 23.5% between you is a good amount.
Make sure you monitor how the pension is invested and that it is suitable for your age and risk profile. It is something many people neglect.

Bridlington1

The immediate thing that jumps out to me is that you have £2.4k in a NatWest current account, which I assume earns no interest? Plus you have another £67 split between other current accounts. The first thing I would do is get that money into savings accounts, you should be able to get 5% as a bare minimum on that amount. See:
https://forums.moneysavingexpert.com/discussion/6392978/top-easy-access-acs-ranked-top-of-the-pots-no-chat/p1

I note you have the NatWest Digital Regular Saver. Whilst this offers a good rate, there are quite a few regular savers paying more than that which I'd be inclined to prioritise funding. See:
https://forums.moneysavingexpert.com/discussion/6576962/the-top-regular-savers-discussion-thread/p1

Additionally 4.32% can be beaten elsewhere on easy access ISAs. See:
https://forums.moneysavingexpert.com/discussion/401374/cash-isas-the-best-currently-available-list/p1

Whilst you're at it consider moving the money from premium bonds into ISAs as well, with average luck you'd win less from premium bonds than you'd earn in interest from the top ISAs.

Brie said:

I'm wondering why you have 3 current accounts.  Maybe it's for money managing but if you have one for day to day use and bill paying and close the others it might get you more opportunity for switching bonuses at a future date as those seem to be for new customers only.  

I'd strongly advise against closing the other current accounts to be honest. If you only have one current account and it gets frozen, bank has an IT meltdown etc then it makes it rather difficult to receive wages, pay bills etc till the issues are resolved. I'd say it's best to have at least 2 (preferably 3+) current accounts with different banking groups to safeguard against the above.

Additionally having current accounts with different banks enables you to get hold of more ongoing perks, e.g. linked regular savers, reward accounts etc. 

jimjames

Brie said:

I'm wondering why you have 3 current accounts.  

3 current accounts is an excellent idea when spread across 3 different banking groups as it mitigates against any outage at one bank as has happened repeatedly over the years. Keeping high balances in a current account not paying interest isn't a great idea though.

Kim_13

As a TSB and Nationwide current account holder you could open their regular savers also - 6% fixed on £250 per month from TSB which could be argued to be superior to NatWest as it looks like we have a downward rate environment, plus 6.5% on £200 per month from Nationwide. You can still access the money in an emergency and have enough in your NatWest current account to fund both for several months already. 

Kim_13

Brie said:

I'm wondering why you have 3 current accounts.  Maybe it's for money managing but if you have one for day to day use and bill paying and close the others it might get you more opportunity for switching bonuses at a future date as those seem to be for new customers only.   

The NatWest one is needed for the Regular Saver, and OP would also need one to be able to switch to get any bonus so should keep at least two (which also guards against an issue at one bank, though £700 in the two that currently contain little would be a better idea for this purpose as they would then cover a month’s expenses each in an emergency.)

Holding the Regular Savers of a bank can outweigh a switching bonus when there are sums earning little or nothing (OP also has the Raisin pot to do something with in May) and new versions can be opened in future years instead of being a one time only thing. OP would still be a new customer to Santander, Lloyds, Halifax, First Direct, HSBC and Barclays (though the latter are the least likely to offer an incentive or a Regular Saver going by recent history.)

Sarahspangles

We use Nationwide as our main joint account and between us this year will receive £300 in loyalty bonuses (Fairer Shares and Big Thank You). It’s not guaranteed but since we have to bank somewhere, we may as well stick with them, as it’s like receiving interest on our current account.

I don’t subscribe to the view that everyone needs multiple current accounts. Any costs from extended outages are picked up by the bank/building society so we could spend or withdraw cash on a credit card (and be reimbursed charges). The standard advice is to build up a year or more’s required income in an easy access account, for us that’s in a savings account with a local branch of a different society. This would be available if our account was hacked. The issue with many societies is that you can only withdraw to a nominated account so you need a society that will transact in branch.

The best savings rates are regular savers, if you are organised…. Start by looking for loyalty offers with existing providers, including ‘rainy day’ accounts. Then work through the table on Regular Savers. Premium Bonds rates are not great - but that doesn’t stop us….

The Reddit UK Personal Finance Flowchart is a very good benchmark to review against.

wmb194

Sarahspangles said:

We use Nationwide as our main joint account and between us this year will receive £300 in loyalty bonuses (Fairer Shares and Big Thank You). It’s not guaranteed but since we have to bank somewhere, we may as well stick with them, as it’s like receiving interest on our current account.

I don’t subscribe to the view that everyone needs multiple current accounts. Any costs from extended outages are picked up by the bank/building society so we could spend or withdraw cash on a credit card (and be reimbursed charges). The standard advice is to build up a year or more’s required income in an easy access account, for us that’s in a savings account with a local branch of a different society. This would be available if our account was hacked. The issue with many societies is that you can only withdraw to a nominated account so you need a society that will transact in branch.

The best savings rates are regular savers, if you are organised…. Start by looking for loyalty offers with existing providers, including ‘rainy day’ accounts. Then work through the table on Regular Savers. Premium Bonds rates are not great - but that doesn’t stop us….

The Reddit UK Personal Finance Flowchart is a very good benchmark to review against.

It isn’t just outages you need to worry about, though. The bigger problem is having an account frozen for fraud checks. These can take weeks and it’s unlikely there will be any compensation.