Complete financial novice

Rmwilliams10

Brie said:

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.

No th 90k is split across 2, one with chase and the other with another bank via HL active savings. 

Can I ask how you dealt with the £40k of shares over the past 18 months? Just selling below capital gains? 

Rmwilliams10

Eyeful said:

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/

Thank you, is there a reason you put cash ISAs above Stocks and shares ISA's? I also have 2 junior ISA's so need to check i dont reach the annual threshold (20k?)

Rmwilliams10

poseidon1 said:

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.

Thanks, ill definitely look into transferring anything maturing into an ISA.

Unfortunately not married so thats not an option!

Rmwilliams10

Dazed_and_C0nfused said:

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.

Yes - im definitely not very MSE but im here to learn...better late than ever ha!

Can I check what you mean by this:
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. 

I guess the only other income is dividends ~2k a year

Dazed_and_C0nfused

Rmwilliams10 said:

Dazed_and_C0nfused said:

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.

Yes - im definitely not very MSE but im here to learn...better late than ever ha!

Can I check what you mean by this:
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. 

I guess the only other income is dividends ~2k a year

If your adjusted net income is only £76,800 then the HICBC rate for the current tax year is only (😳) 84% so by not receiving (or your partner not receiving) Child Benefit you are giving away 16% of whatever it is for 2 children.

As ever with tax the devil is in the detail and I thought you might have had some (non ISA) interest and the method you use for your pension contributions is important. 

If you actually earn say £96,590 and the £85k is net of pension contributions that would put a different slant on things.  Although extra pension contributions are incredibly tax efficient when it comes to HICBC for two children.

Eyeful

Rmwilliams10 said:

Eyeful said:

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/

Thank you, is there a reason you put cash ISAs above Stocks and shares ISA's? I also have 2 junior ISA's so need to check i dont reach the annual threshold (20k?)

1. Investing means "Putting your money at risk". You should leave your money untouched for at least 10 years.
The longer you invest for, the greater your odds of winning the investment game.

2. Remember there is no guarantee you will win, you could lose.

3. A lot can happen in those 10 years, you may lose your job, become very ill, the stock market may suffer a major crash.
There may be another lock down or a war with Russia or China might occur.
So to me it makes sense to have a Cash ISA buffer first to support you and your family in bad times, before embarking on a
 Stocks and Shares ISA. You of course may not agree.

Eco_Miser

Rmwilliams10 said:

Thank you, is there a reason you put cash ISAs above Stocks and shares ISA's? I also have 2 junior ISA's so need to check i dont reach the annual threshold (20k?)

The Junior ISAs won't be yours, they'll be your children's, each with their own annual allowance (£9k?)

Rmwilliams10

Eyeful said:

Rmwilliams10 said:

Eyeful said:

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/

Thank you, is there a reason you put cash ISAs above Stocks and shares ISA's? I also have 2 junior ISA's so need to check i dont reach the annual threshold (20k?)

1. Investing means "Putting your money at risk". You should leave your money untouched for at least 10 years.
The longer you invest for, the greater your odds of winning the investment game.

2. Remember there is no guarantee you will win, you could lose.

3. A lot can happen in those 10 years, you may lose your job, become very ill, the stock market may suffer a major crash.
There may be another lock down or a war with Russia or China might occur.
So to me it makes sense to have a Cash ISA buffer first to support you and your family in bad times, before embarking on a
 Stocks and Shares ISA. You of course may not agree.

That makes sense, thank you

DRS1

Rmwilliams10 said:

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.

Interesting you mention equiniti as they are the ones mentioned for the flexible ISA idea in one of those threads
Link to their page on the subject here
SAYE, CGT And EQi’s Flexible ISA - Equiniti
Are they involved in the SIP?  If so maybe ask them about moving SIP shares across to an ISA (if you have any room in this year's £20k allowance.  I am not sure if you have.)  Also don't know when any of your SAYE options mature.  Timing may be an issue and perhaps you may have to leave shares in the SIP (assuming they are still there) if you have an SAYE maturity coming up in the same tax year which would use up the £20k ISA limit (or whatever extension of that the flexible ISA route may give you)  Though on second thoughts maybe the flexible ISA works for the SIP as well - something to ask equiniti?

There is a note here about SIPs and how they work and are taxed
Share Incentive Plans (SIPs)
It does not mention transfers to ISAs but at least it will tell you what SIP shares you can do something with and which you should not/could not touch.

And yes by quoted I did mean listed on a stock exchange.

The account with HL would be called a Fund and Share Account.  They also have a Stocks and Share ISA account.  I dare say equiniti have both of those sort of accounts in case dealing with them may be easier.  I do not know how the charges compare but for what you may be doing with the SAYE scheme shares and the ISA you really want someone who knows what they are doing (and offer a flexible ISA - which may not always be the case with a stocks and shares ISA).

On the selling side there used to be restrictions for certain directors and senior employees on when they could sell shares in their company (close periods I seem to recall).  Things have probably changed since I knew anything about that but I assume you would know if you were caught by any such restriction.

DRS1

Oh and check the costs of sending share certificates to HL equiniti or whoever you choose for the dematerialising bit.  I just saw a suggestion that someone charges £50