Advice on savings/investments

Popeye84

Hello all,

I am looking for some tips on how I can invest or save money that will give me the best returns.

We currently have £175k in our current account with a few ISA’s as well that we top up with the tax free allowance every year.

I have been thinking about putting the money into a private pension pot but don’t really know what else to consider.

We are both in our early 40’s with a £160k mortgage. No other debts to consider. 

Any advice would be appreciated.

Regards

Linton

One sensible option to consider is to hold investments in an S&S ISA.  This provides slightly lower tax advantages than a pension but can be accessed at any time.

Another, perhaps easier, option is to make higher contributions to your employers pension schemes, especially if they will also increase their contribution.

Ch1ll1Phlakes

Popeye84 said:

Hello all,

I am looking for some tips on how I can invest or save money that will give me the best returns.

We currently have £175k in our current account with a few ISA’s as well that we top up with the tax free allowance every year.

I have been thinking about putting the money into a private pension pot but don’t really know what else to consider.

We are both in our early 40’s with a £160k mortgage. No other debts to consider. 

Any advice would be appreciated.

Regards

The first advice I will give is to move some of the funds to a different provider. Even if you've a joint account (as you say we throughout) your combined FSCS is max £170k so £5k of this is currently not protected and worse still only £85k protection if this is a sole account holding funds of two people.

You may consider paying off your mortgage quicker but this would depend on your interest rate as if you have a low interest rate fix it is probably not worth doing so.

Albermarle

Popeye84 said:

Hello all,

I am looking for some tips on how I can invest or save money that will give me the best returns.

We currently have £175k in our current account with a few ISA’s as well that we top up with the tax free allowance every year.

I have been thinking about putting the money into a private pension pot but don’t really know what else to consider.

We are both in our early 40’s with a £160k mortgage. No other debts to consider. 

Any advice would be appreciated.

Regards

The first thing to think about is what you want the money to do for you.
Maybe early retirement?
Lots of holidays and new cars?
Help family ?
Leave it as a legacy?
Bigger house ?
Etc
Until you have some idea of what you want and the time scale involved , it is difficult to pick the right places to put it 

vacheron

Popeye84 said:

Hello all,

....I have been thinking about putting the money into a private pension pot but don’t really know what else to consider.

...Any advice would be appreciated.

Regards

If you decide on the pension route, before looking at private pensions, firstly, check what kind of contribution matching you and your partners respective workplace pensions offer. 

If, for example, they offer salary sacrifice, or matched contributions up to a higher amount than you are currently paying, I would instead look to maximise the amount I could pay my workplace pension, and then subsidise the resulting reduction in monthly income using some of the 175k you have.

For example, if someone who was a basic rate taxpayer earning, say 45K, added £100k to a private pension over 5 years, they would receive £125K into their pension due to the tax relief.
If instead I contributed the same 100K using my company salary sacrifice scheme, the total paid into my pension would be closer to £151K.


Regardless of the type of pension used, You would not be able contribute this all into a pension in one year and also maximise the tax relief, and to use the carry forward rules would require one of you to have an extremely high salary (well into 6 figures), so either way it would have to be done over a number of years.

But whatever you do, do something, because the LAST place those funds want to be sitiing for any length of time when you are in your early 40's is in a current account! 

Eyeful

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

2. Money needed within 5 years should always be in a savings account protected the FSCS Savings Protection up to £85K.
This only covers UK-authorised bank, building society or credit union on their list.
https://www.fscs.org.uk/check/check-your-money-is-protected/

3. Money which you will not touch for at least 10 years could be invested.
The longer you invest for, the higher the odds of winning in the investment game.
Investing means "putting your money at risk".
There is no guarantee that you will win.

4. These may be of interest to you:
https://www.ii.co.uk/ii-accounts/sipp/sipp-investment-ideas/target-retirement-funds
https://monevator.com/passive-fund-of-funds-the-rivals/
https://monevator.com/best-global-tracker-funds/
https://www.kroijer.com/