Complete financial novice

Rmwilliams10

Hoping someone can help me. For years I have been really good at saving, for the same period of time I have completely ignored any sort of financial admin and this has resulted in me getting into a mess with savings/investments all over the place and no idea what to do.

The time has come i really need to sort things out as we need to move homes fairly soon to accommodate my growing family.

I'll try and summarise my situation, FYI I live with my partner and 2 children (1yr and 2 yrs old)

My annual income - approx 85k
Combined household income - approx 120k
1 flat with mortgage (40k left to pay) with tenant not paying rent (brother in law)
1 house with mortgage (120k left to pay)
Cash savings approx 90k (sat in a 5% interest savings account)
200k with of shares in the same company (my employer) some held as certificates, some in equiniti ans some conditional.

What  can I do to help myself here? End goal is to minimise risk on my investments, obviously protect myself from the tax man as much as possible and have cash for a decent deposit on out new home. I'd like to keep the flat as an investment but we plan to sell the house. I dont know where to start!

Dazed_and_C0nfused

Rmwilliams10 said:

Hoping someone can help me. For years I have been really good at saving, for the same period of time I have completely ignored any sort of financial admin and this has resulted in me getting into a mess with savings/investments all over the place and no idea what to do.

The time has come i really need to sort things out as we need to move homes fairly soon to accommodate my growing family.

I'll try and summarise my situation, FYI I live with my partner and 2 children (1yr and 2 yrs old)

My annual income - approx 85k
Combined household income - approx 120k
1 flat with mortgage (40k left to pay) with tenant not paying rent (brother in law)
1 house with mortgage (120k left to pay)
Cash savings approx 90k (sat in a 5% interest savings account)
200k with of shares in the same company (my employer) some held as certificates, some in equiniti ans some conditional.

What  can I do to help myself here? End goal is to minimise risk on my investments, obviously protect myself from the tax man as much as possible and have cash for a decent deposit on out new home. I'd like to keep the flat as an investment but we plan to sell the house. I dont know where to start!

Pension contributions will help you retain all of the Child Benefit.

Normal savings interest outside an ISA is all taxable and will all be taxed in your case.  The first £500 at 0% but it is still income for HICBC purposes so ISA's might be a prudent option going forward (after sorting pension contributions).

Albermarle

What is your pension situation? How much are you adding to it ( assuming you have one with work )?

£200K in one companies shares is risky, doubly so as they are your employer.
If something went badly wrong you could lose your job and a lot of money.
Presume you get the shares as part of your contract?

Rmwilliams10

Dazed_and_C0nfused said:

Rmwilliams10 said:

Hoping someone can help me. For years I have been really good at saving, for the same period of time I have completely ignored any sort of financial admin and this has resulted in me getting into a mess with savings/investments all over the place and no idea what to do.

The time has come i really need to sort things out as we need to move homes fairly soon to accommodate my growing family.

I'll try and summarise my situation, FYI I live with my partner and 2 children (1yr and 2 yrs old)

My annual income - approx 85k
Combined household income - approx 120k
1 flat with mortgage (40k left to pay) with tenant not paying rent (brother in law)
1 house with mortgage (120k left to pay)
Cash savings approx 90k (sat in a 5% interest savings account)
200k with of shares in the same company (my employer) some held as certificates, some in equiniti ans some conditional.

What  can I do to help myself here? End goal is to minimise risk on my investments, obviously protect myself from the tax man as much as possible and have cash for a decent deposit on out new home. I'd like to keep the flat as an investment but we plan to sell the house. I dont know where to start!

Pension contributions will help you retain all of the Child Benefit.

Normal savings interest outside an ISA is all taxable and will all be taxed in your case.  The first £500 at 0% but it is still income for HICBC purposes so ISA's might be a prudent option going forward (after sorting pension contributions).

Thank you, I dont get child benefit, my understanding is thats on a sliding scale and with my earning now worth it. I do get tax free childcare £2000/year and will get 30 free hours from September but the nursery bills are eye watering!

When you say ISA's, can I move shares into them or just cash? 

Rmwilliams10

Albermarle said:

What is your pension situation? How much are you adding to it ( assuming you have one with work )?

£200K in one companies shares is risky, doubly so as they are your employer.
If something went badly wrong you could lose your job and a lot of money.
Presume you get the shares as part of your contract?

My pension contributions are 12% a month, I have no idea whether thats good or not, but I do plan to up it once I lose the nursery bills. I also have added a few one off payments (before I went part time) to get under the childcare threshold.

The shares are a mix of contract but also SIP and save as you earn schemes, I just dont know what to do with them to get rid of them in a tax efficient manner!

Dazed_and_C0nfused

Rmwilliams10 said:

Dazed_and_C0nfused said:

Rmwilliams10 said:

Hoping someone can help me. For years I have been really good at saving, for the same period of time I have completely ignored any sort of financial admin and this has resulted in me getting into a mess with savings/investments all over the place and no idea what to do.

The time has come i really need to sort things out as we need to move homes fairly soon to accommodate my growing family.

I'll try and summarise my situation, FYI I live with my partner and 2 children (1yr and 2 yrs old)

My annual income - approx 85k
Combined household income - approx 120k
1 flat with mortgage (40k left to pay) with tenant not paying rent (brother in law)
1 house with mortgage (120k left to pay)
Cash savings approx 90k (sat in a 5% interest savings account)
200k with of shares in the same company (my employer) some held as certificates, some in equiniti ans some conditional.

What  can I do to help myself here? End goal is to minimise risk on my investments, obviously protect myself from the tax man as much as possible and have cash for a decent deposit on out new home. I'd like to keep the flat as an investment but we plan to sell the house. I dont know where to start!

Pension contributions will help you retain all of the Child Benefit.

Normal savings interest outside an ISA is all taxable and will all be taxed in your case.  The first £500 at 0% but it is still income for HICBC purposes so ISA's might be a prudent option going forward (after sorting pension contributions).

Thank you, I dont get child benefit, my understanding is thats on a sliding scale and with my earning now worth it. I do get tax free childcare £2000/year and will get 30 free hours from September but the nursery bills are eye watering!

When you say ISA's, can I move shares into them or just cash? 

Child Benefit entitlement is universal, if you are paying 12% out of the £85,000 and have no other taxable income of note you are already giving away free money for no purpose whatsoever.  Really not very MSE 😳.

Not sure about "moving" shares into an ISA but you can certainly buy them within an ISA.

poseidon1

Rmwilliams10 said:

Albermarle said:

What is your pension situation? How much are you adding to it ( assuming you have one with work )?

£200K in one companies shares is risky, doubly so as they are your employer.
If something went badly wrong you could lose your job and a lot of money.
Presume you get the shares as part of your contract?

My pension contributions are 12% a month, I have no idea whether thats good or not, but I do plan to up it once I lose the nursery bills. I also have added a few one off payments (before I went part time) to get under the childcare threshold.

The shares are a mix of contract but also SIP and save as you earn schemes, I just dont know what to do with them to get rid of them in a tax efficient manner!

As for your SAYE shares see below

https://www.gov.uk/tax-employee-share-schemes/save-as-you-earn-saye#:~:text=This is a savings-related,the savings to buy shares

If you have maturities arising in the new 2026/27 tax year, you may wish to consider saving all or part of your ISA allowance to transfer those SAYE shares ( CGT free) within the 90 day transfer window.

Once those shares are in an ISA you are free to sell with no CGT to worry about.

I am also of the view that holding all your stock market assets in 1 company leaves you particular exposed to risk, so you really should be reducing the holding and diversifying.

By the way you can gift shares to your wife ( she acquires at your original cost) and use her £3000 annual exemption and basic rate tax status to accelerate share sales, and shelter dividends from your higher rate.

Eyeful

1. Use tax shelters wherever possible (a) Pensions (b) Cash ISA's (c) Stocks & Shares ISA's.

2. Having your investment in only one share is very risky. Even more so if it's the company which you work for.
Should that company go bust, you have nothing to fall back on.
(a) This may be of help and interest to you:  https://www.kroijer.com/
(b) Consider a low cost Multi Asset Fund with a share/bond split you are comfortable with. This will give you a ready made portfolio.
Example: https://www.vanguardinvestor.co.uk/investing-explained/what-are-lifestrategy-funds?intcmpgn=lifestrategyfunds_learnmore_link

3. The FSCS Savings protection has an upper limit of £85K, I do hope your cash is spread around different intuitions.
The FSCS checkers:  https://www.fscs.org.uk/check/

4. Best Savings Rates:  https://moneyfactscompare.co.uk/savings-accounts/

Brie

Is the £90k in your name in one account?  Maybe want to split that between 2 unrelated banks - not that I think there's any threat of a bank going under but I was probably thinking the same in 2008.  Unless of course that's £90k between you and your OH which is fine in the same bank.  

And I agree about the whole share pot being with the one firm.  I was nervous having my £40k worth with my employer but have slowly been dealing with that over the last 18 months or so.

DRS1

I notice everyone is ignoring the house buying question.  There is lots of good stuff about pension contributions and child benefit but whatever the OP puts in a pension is not going to be available for the house purchase.

You don't say how much equity there is in your current house and how much you want to spend on a new one (probably not possible to be precise about either figure but it may give you some idea of whether you need spare funds for a deposit or to avoid a new mortgage being too much).  If you have some idea of how much you are likely to be spending on the house then you can see if there is anything "spare" for pensions.

The company shares may well be a good source of funds for the house but are they quoted shares?  Can they be sold easily?  You may want to open an account with an investment platform (HL AJBell ii etc) and get the certificated shares onto their electronic platform to make them easier to sell (assuming they are quoted of course).

Following up on @poseidon1's post there are threads on here about getting SAYE Scheme shares into an ISA
SAYE to ISA — MoneySavingExpert Forum
That one links to another thread which may be useful if your shares (on exercise) are worth more than the £20k ISA limit
SAYE transfer shares into Stocks and Shares ISA within 90 Days — MoneySavingExpert Forum
This one refers to an HL page which also mentions shares from a SIP - you mention a SIP but I am not sure if the share are still in it.
Company SAYE share scheme maturing — MoneySavingExpert Forum
This one has a bit of stuff about how it was done in practice which may be helpful.

Rmwilliams10

DRS1 said:

I notice everyone is ignoring the house buying question.  There is lots of good stuff about pension contributions and child benefit but whatever the OP puts in a pension is not going to be available for the house purchase.

You don't say how much equity there is in your current house and how much you want to spend on a new one (probably not possible to be precise about either figure but it may give you some idea of whether you need spare funds for a deposit or to avoid a new mortgage being too much).  If you have some idea of how much you are likely to be spending on the house then you can see if there is anything "spare" for pensions.

The company shares may well be a good source of funds for the house but are they quoted shares?  Can they be sold easily?  You may want to open an account with an investment platform (HL AJBell ii etc) and get the certificated shares onto their electronic platform to make them easier to sell (assuming they are quoted of course).

Following up on @poseidon1's post there are threads on here about getting SAYE Scheme shares into an ISA
SAYE to ISA — MoneySavingExpert Forum
That one links to another thread which may be useful if your shares (on exercise) are worth more than the £20k ISA limit
SAYE transfer shares into Stocks and Shares ISA within 90 Days — MoneySavingExpert Forum
This one refers to an HL page which also mentions shares from a SIP - you mention a SIP but I am not sure if the share are still in it.
Company SAYE share scheme maturing — MoneySavingExpert Forum
This one has a bit of stuff about how it was done in practice which may be helpful.

Hi,  thanks for the reply. There's not a lot of equity in the current house - id guesstimate 60-80k and new property will likely be up to 550k(ish).

By quoted, do you mean they're listed on the stock exchange? They're definitely listed on the LSE...large pharma company. Some of the shares are held in equiniti/sharesave so very easy to share others i just have certificates and I dont think these are held anywhere electronically at the moment

Thanks for the links, I have a HL active savings account (as of this afternoon!) So I'll see if I can create the right account to transfer certificate shares in.