Advice please

MoneyWorry

I was made redundant at the end of last September finally finding another job in March this year. Unfortunately, my new salary at £18000pa is £6.5Kpa lower than my previous one. At the moment, I am supplementing my salary with a bit left over from my redundancy to the tune of £200 per month. This will only last me about 18 months though The rest of the shortfall I have made up by cutting back and budgeting.

I know it sounds daft, but I am concerned about the future, although I have what should be considered plenty of savings. In addition to the loss in salary, I lost my company pension scheme as well. What I would like is some advice on the best way to handle my savings. In the past, I haven't bothered that much.

I have £16,000 split between an Ing account, an Egg Internet account, an A and L internet saver account and an Ing Isa. The only thing is I haven't used all my Isa allowance up for this year. Or would I be better to pay some money off my mortgage. Or would I be better to try another form of investment or pay some money into my personal pension.

My mortgage is my only debt which stands at £17000 on a Halifax variable rate.

Hope you can help. I know it sounds silly to be concerned, but think the redundancy shook my confidence. By the way, I am 48 years old and single.

amandada

Hi, sorry you're having such a trying time.
I'm by no means an expert, but I'd think you could do better on your mortgage than variable rate-even in the current mortgage climate, as I'm presuming you'd have a very low loan to mortgage value.
There will be others who have much more and better advice than me though!

Clive_Woody

Probably best to have a chat with an IFA. I would guess your monthly mortgage payments are quite low and the remaining term must be quite short, so you have to calculate what you would gain from switiching your mortgage (beaing in mind application fees etc and what that would add to your total repayments if you found a cheaper interest rate). The SVR is usually high so usually the advice would be to switch to a better product, but you need to consider if this will save you money long term.

If you have savings sat in a standard saving account and you are losing tax on the interest then my advice would be to use yoru ISA allowance (check out the best rates tables on this site), even if you plan to use these funds during this financial year you might as well get them working as hard as possible with the best returns.

Other advice is fairly standard - look around for the best utility suppliers (phone, broadband, gas, elctricity, car and home insurance) and switch to these.

If you are good with credit cards and are disciplined enough to pay them back in full every month consider a cash back credit card for all your purchases, this way you get an annual rebate from them from around 1% (it adds up quite quickly and an extra £100 or more is not to be ignored). If you do get one of these credit cards set up a DD to pay it back in full each month.

Often saving money on out-goings is as good as a healthy pay rise, don't discount this as a way of improving your financial situation.

I am not an IFA, so maybe others will be able to offer better advice, particulalry regarding a pension, but do spend some time looking around this site as there is an awful lot of good advice.

MoneyWorry

Thank you for so much for the advice. I originally thought with only £17000 left on the mortgage and 10 years to go that it would never be worth moving from the Halifax, but I will certainly look into it.

I did see an IFA about my pension, but all they advised was I should be putting as much as possible into my personal pension. As you can imagine with the downturn in my salary, I am not really sure what I can and cannot afford. I do pay my credit card every month by direct debit so will certainly start to look at a cashback one. It's the uncertainty that obviously still bothers me, but maybe by following all your hints and getting used to a lower salary that will be alleviated.

Rebob

You do not have to leave the halifax to get a better mortgage. Give them a ring and ask if they have any deals for you. With only owing a small amount this could be the best deal.

MoneyWorry

I did have a go at the Halifax, but with no joy at all. A fixed rate would save me approximately £3.50 per month over 24 months. The arrangement fee would be £699!!!!

epsilondraconis

Hi MoneyWorry - don't worry about being made redundant. Its easy to think that the redundancy is some way reflective on our own performances etc. I'm 35 and was made redundant a few years ago when the company went into administration. I remember how strange the experience was - it gave me a kind of empty feel for a while wondering what I was to do with myself.
I think the key is to always try to stay positive.
I don't believe you have any significant cause for concern regarding your financial situation. Okay, you have taken a drop in salary, but the fact that you are on this site seeking further advice, some reasonable savings and a low mortgage are all very positive.
Apologies for not being able to offer any specific financial advice; perhaps I'm just trying to say that you should stay positive and remain focused on skills and experiences that you are able to bring to your new employment.
Good luck...

MoneyWorry

Thank you so much. You have summed up exactly how the redundancy made me feel. I'm hoping that by taking the advice of everyone on this site, I can make enough savings that will help with the drop in salary without me having a horrible lifestyle change.