Hurrah, my MFW quest has started

lulabelle1

Hey ATT - out of curiosity (and nosiness) - how do you decide the following split:
-OP's
-saves which may be for OP's
-ISA - presumably for when old and grey?
-S&S ISA or otherwise - also for when old and grey?

I've recently stated paying in to a cash ISA each month and also a couple of months ago I started a S&S ISA... whilst trying to keep up the OP's and the end date.... but but but......

abouttimetoo

lulabelle1 wrote: »

Hey ATT - out of curiosity (and nosiness) - how do you decide the following split:
-OP's
-saves which may be for OP's
-ISA - presumably for when old and grey?
-S&S ISA or otherwise - also for when old and grey?

I've recently stated paying in to a cash ISA each month and also a couple of months ago I started a S&S ISA... whilst trying to keep up the OP's and the end date.... but but but......

Hey Lula

Maths wise it doesn't make any sense for me to make any OP's as up to a point I can always get a better savings rate, but... I can't bear to not see the mortgage IO balance not go down

I wished I could say there was some fancy scientific method but there isn't really so my current approach is as follows

- OP's £500 minimum a month so that I can see the balance going down!
- Savings, I try to max out the higher rate paying current accounts e.g T$B plus x2 (5%), Club monthly saver (4%) and a couple of others around 2 and 3 %
- Savings that may be for OP'ing, no defined approach but for example one of my monthly savers matures next month so I think I'll OP that and then start again
- ISA, I didn't do a cash ISA this year as plenty normal accounts could beat the rates and in fact I've been musing taking the money I do have in an ISA out and putting it in a normal account
-S&S ISA, I'm a bit rubbish at this e.g. at present have c£86k in shares with only c£20k in an ISA , they should all be in an ISA so must try harder. Yes, in the main this is a long term thing, as you say for old and grey etc but also for future dividend income
- I also maximise any work share options/plans etc

Not sure that helps any :rotfl:

What rate are you getting on your cash ISA and is it *really* worth it?

Regards
ATT

lulabelle1

Thanks ATT, it's always interesting to hear about someone else views/plans especially in this "safe environment" if that makes sense...

The Isa's are fairly poor..... I have an exiting isa which is at 1.5% and my current isa is at 2.59% but restricted to £1250 per month and can't transfer old funds in..... Although, since I'm not max'ing it out this year, I am actually transferring some from the 1.5 in to it and using some of this years allowance.

I only started the s&s isa last month and am currently paying £500 per month. I'd plan to increase this once the mortgage is OP'd.... Assuming we don't move! (Most likely £1k month in to s&s and the remainder if huge allowance into the cash isa and then additional savings in to other places like reg savings accounts to fund a b2l deposit or two.....)

I'm ashamed to admit that I hardly pay anything in to my pension currently. I'm not sure what my plans are with this. Presumably if I build up enough in the isas, savings and have a few b2l's then the pension won't matter so much? I'm sure I'm probably sounding really naive and a bit daft writing that......!

gallygirl

I took the money out of our cash ISA and put it into Santander - 3%, 1.8% net. We keep 20k in there, although it's my current account the money goes out as quickly as it comes in :eek: so we don't lose much interest in what is over 20k.

Just to confuse you more Lula, we have 2 x FD @6%, a NWide @ 5% (almost up) and I have a TSB @ 5%. Maybe doing that, with all shuffling involved, would satisfy your restless spirit .

ATT - off to see what the club monthly saver is .

edinburgher

Presumably if I build up enough in the isas, savings and have a few b2l's then the pension won't matter so much? I'm sure I'm probably sounding really naive and a bit daft writing that......!

There are tax benefits to putting money in a pension. For example, basic rate tax payer pays 20% tax on money going into an ISA (as money is from salary etc.) With a pension, you get a 20% uplift on your pension contribution, but you also get 25% tax free lump sum. This takes the net tax rate to 15% unless I'm mistaken? Probably more pronounced as you're all higher rate tax payers

lulabelle1

gallygirl wrote: »

I took the money out of our cash ISA and put it into Santander - 3%, 1.8% net. We keep 20k in there, although it's my current account the money goes out as quickly as it comes in :eek: so we don't lose much interest in what is over 20k.

Just to confuse you more Lula, we have 2 x FD @6%, a NWide @ 5% (almost up) and I have a TSB @ 5%. Maybe doing that, with all shuffling involved, would satisfy your restless spirit .

ATT - off to see what the club monthly saver is .

I should do another FD reg saver really..... I was never lucky enough to spot the nationwide 5% offer! it must have been a flash in the pan?

Figure I'll leave and continue to add to the cash isa's steadily as it seems like a good idea to have them within a tax free wrapper for a time (who knows when that will be) when the interest rates may increase. Isas are our grey and old stuff. (Actually I'm going grey now and feeling old).

gallygirl

lulabelle1 wrote: »

I should do another FD reg saver really..... I was never lucky enough to spot the nationwide 5% offer! it must have been a flash in the pan?

It's a current account - still available.

Sorry for hijack ATT .

lulabelle1

edinburgher wrote: »

There are tax benefits to putting money in a pension. For example, basic rate tax payer pays 20% tax on money going into an ISA (as money is from salary etc.) With a pension, you get a 20% uplift on your pension contribution, but you also get 25% tax free lump sum. This takes the net tax rate to 15% unless I'm mistaken? Probably more pronounced as you're all higher rate tax payers

Yes, I guess it's the tax benefit that makes the big difference..... I'm not a higher tax payer though..... DH and I both work for the company that I part own. I keep my earnings under the higher tax bracket (basic salary and dividends) as I have a company car and don't want to pay more tax on that than I need to. DH receives the rest of the salary if that makes sense....

I guess I'm realising that you can never save enough really....

lulabelle1

Sorry for thread hijacking xxx

abouttimetoo

Jeez, I turn my back for a second and my diary turns into a proper grown up finance thread :rotfl:

No need to apologise about hijacking, you can hijack till your hearts content, it's all good stuff and great to bounce ideas and thoughts off each other.

It was Gally that first flagged the NW 5% account to me but my 12 months expired a couple of months ago albeit I keep meaning to phone them to see if I can have another, anyone know?

Gally, did you find what you needed re the LL0yds Club Saver at 4%?

Lula, if it makes you feel any better, when it comes to pensions I usually find something more interesting to do e.g. chewing own toe nails off , however, I paid it a bit of attention this year and decided I was comfy with where I was (lucky enough to have very old style final salary scheme). I've recently had my annual statement through and all looks fine (to the extent of my woeful knowledge!) so this, along with shares and BTL is my pension arrangements

I definitely agree with you about it feels like you can never save enough

Ed, as ever, thanks for adding to the mix, it's very easy to get caught up in the 'just pay the mortgage off' thought process so it's good to talk and *challenge* each other about the bigger picture

Regards
ATT x