Finally want to sort my finances!!!

AndySkint

Just wondering if some of you could give me your opinions on the following.

After reading through the articles on the site I am looking to change my current and savings accounts. Whilst my wife and I would like to maximise the return we can get, we would also like the reassurance of knowing that we can access a certain amount of our money quite quickly and without penalty.

We are in the fortunate position of being able to save approximately £500 per month.
With this in mind I am considering the following:

1) Open 2 ISAs with Barclays – One in my name and one in my wife’s name. We currently have enough savings to put the full £3600 into each.
2) Open a Halifax Regular Saver and set up a standing order for approx £100 pcm
3) Open 2 Alliance & Leicester current accounts (8.5% AER) and (eventually ) maintain the balance at about £2500 for each.(This would then give us the reassurance that we can access the money quite quickly and allow us to treat ourselves occasionally) Once this is reached we will then transfer the surplus amount over into the Halifax Regular Saver.

I am not sure whether this would be the best option or if it would be best to open one current account and an instant saver account.

On a slightly different note, my wife and I currently have a mortgage fixed at 5.58%. At what point will it start to make sense to overpay the mortgage rather than use a savings account.

Thanks in advance for all replies.

johng_uk

If it was me I would first utilise my ISA allowance.

The savings accounts would depend upon your working situation(s). If one of you isn't working, they wouldn't pay tax on the savings in their name. If one of you is a 40% taxpayer and the other is 20%, the savings might be better solely in their name?

I would get a pot of money as an emergency fund (the amount again depends on your circumstances) and then I would over pay my mortgage as much as possible. Obviously this would save money in the long-term, but could also help keep your monthly rate down when you have to remortgage and get hit with a higher rate!

AndySkint

Thanks for the response,

Situation at the moment is that we are both basic rate tax payers so shouldn't really matter whos name the savings go in. Although historically all the savings have been in my wife's name with the credit card in mine!!!!

Will definatley fill the ISAs first and once we have our 'rainy day' pot will start to overpay the mortgage.

Thanks again,

Andy

johng_uk

AndySkint wrote: »

Thanks for the response,

Situation at the moment is that we are both basic rate tax payers so shouldn't really matter whos name the savings go in. Although historically all the savings have been in my wife's name with the credit card in mine!!!!

Will definatley fill the ISAs first and once we have our 'rainy day' pot will start to overpay the mortgage.

Thanks again,

Andy

If your both basic rate taxpayers and neither one of you is likely to become higher rate soon, I would split the savings in half.