Finance Review

Cotta · 19 June 2018 at 11:34AM

Hi All,

Edited based on feedback.

I do this every six months on here and I have found it invaluable in helping me manage my money better and make it work harder. It's basically a small savings setup I have at present but it has started to grow quite significantly since I took on-board feedback of people here, I therefore wanted to post my latest setup to get some feedback as to how it looks and if I should make any changes?

Thanks in advance.

My setup is as follows:

Outgoings

Mortgage - £393 p/m at 4.69% (Balance is around £62k) renewal due on February 2019. 10% overpayments allowed and there is a 5% fee for early settlement. At renewal I am looking at HSBCs 10 year fixed mortgage of 2.74%, I can lock this in around August/September time.

House was bought for £84,000 and is worth around £90,000 now.

House Rates/Tax - £190 p/m
Car Insurance/Tax - £45 p/m
House Insurance - £20 p/m
Mobile - £16 pm
BT Landline £26.69 (This is my parents but I pay this)
Gym - £16 p/m
Fuel - £90 p/m
Heating Oil/Electric - £34 p/m
Food - £100p/m

Savings

£1700 in TSB current account earning 5% on £1500 of it. I cannot access this now due to some of the TSB issues.

£250 in HSBC regular saver paying 5%, this is due to end in May 2019.

£750 in Nationwide Regular saver account at 5% which comes to April 2019.

£3000 in First Direct Regular saver account at 5% matures in August 2018.

£2000 -This is sitting within Nationwide's flex direct account earning 1%, I am setting up a Tesco current account that pay 3% this money will be sent there then.

Debt

Mortgage - £61k
Loan from parents - £3000 (Currently paid off)
Student Loan - £400 (Balance due to be paid in September of 2018)

Notes

My net monthly income is £1780.

I contribute 8% of my salary towards my pension to which my employer pays in 11.5% of my gross salary.

Overall pension pot is worth around £32k and I am 34. (This took a nosedive during the year and really has not changed much since December 2017

jimjames · 19 June 2018 at 1:13PM

I can't comment on the rest but rather surprised to hear that TSB issues are still affecting you accessing your money. I've been able to use the app and website without issue over the last month. It may only be £200 but worth putting that money somewhere that pays interest.

xylophone · 19 June 2018 at 1:27PM

£3000 -This is sitting within a Nationwide current account earning no interest.

If this is a Nationwide Flexdirect you could at least earn 1% on £2500 by cycling in/out the required £1000 a month?

Or simply reduce the money in the account to a token amount and move the balance elsewhere?

If you have 3DDs you could consider the Tesco current account and earn 3% on up to £3000?

Even a savings account offers better than nothing.

http://www.thisismoney.co.uk/money/article-1583859/Best-savings-rates-General-savings-Internet-branch.html

Paul_DNAP · 19 June 2018 at 1:37PM

Overall I'd say you're on pretty solid ground.
Don't stress over the 6-12month fluctuation in the pension projection, it's a long term investment with over 30 years to grow (sorry), are you at the maximum employer's contribution level?
One point, is that really the best phone deal you can get? Are you on fibre for that? Although with BT you're probably on an unfeasibly long contract with unbearably huge penalties for swapping it.
The £3k in your current account could be earning a little bit somewhere, but I guess you'll need to keep it somewhere with reasonably easy access for unexpected bills and stuff, and so you're going to struggle to get more that 0.5% on that anyway.

Alexland · 19 June 2018 at 1:42PM

I don't understand why you have a loan from your parents of £3k and £3k sitting in Nationwide earning nothing?

I would only borrow from my parents as a last resort (it has never happened, and is now highly unlikely to ever happen) and would prioritise giving them their money back quickly.

Are you wasting their opportunity to earn a return on it?

Alex

Wildsound · 19 June 2018 at 2:00PM

Going into a 10 year fixed mortgage on such (relatively) little balance doesn't fit right with me. Hedging against interest rate rises over such a long period might sound like a good idea, but in my opinion, I don't see interest rate rises being particularly rapid and could easily reverse over the medium term.

I'd be more comfortable going into a 2/5 year fix with an option to overpay that doesn't penalise. Even if interest rates were to spike up over that time, you would hopefully have done a bit of overpaying in that time to end up with a lower re-mortgage value.

Just my thoughts.

eskbanker · 19 June 2018 at 4:00PM

Cotta wrote: »

Mortgage - £393 p/m at 4.69% (Balance is around £62k) renewal due on February 2019. 10% overpayments allowed and there is a 5% fee for early settlement. At renewal I am looking at HSBCs 10 year fixed mortgage of 2.74%, I can lock this in around August/September time.

Perhaps worth cross-referring to your other thread where you state that you've rented out the mortgaged property seemingly without sufficiently formalised approval from your current lender - regardless of the rights and wrongs of how this came about, you'd obviously need to make this situation clear to any new lender, and expect rates to be adjusted accordingly, if you anticipate continuing to let it, that is....

Cotta · 19 June 2018 at 4:51PM

eskbanker wrote: »

Perhaps worth cross-referring to your other thread where you state that you've rented out the mortgaged property seemingly without sufficiently formalised approval from your current lender - regardless of the rights and wrongs of how this came about, you'd obviously need to make this situation clear to any new lender, and expect rates to be adjusted accordingly, if you anticipate continuing to let it, that is....

No the let was a short term aspect due to work commitments but it will end long before the current renewal period.

System · 19 June 2018 at 5:17PM

Cotta wrote: »

No the let was a short term aspect due to work commitments but it will end long before the current renewal period.

If you haven't got permission from your lender you are still in breach of the terms of the mortgage and they can call in the mortgage at any point.

Cotta · 20 June 2018 at 9:25AM

Alexland wrote: »

I don't understand why you have a loan from your parents of £3k and £3k sitting in Nationwide earning nothing?

I would only borrow from my parents as a last resort (it has never happened, and is now highly unlikely to ever happen) and would prioritise giving them their money back quickly.

Are you wasting their opportunity to earn a return on it?

Alex

That is going to be cleared at the end of this month.

Cotta · 3 July 2018 at 9:27AM

I have edited my original post to make a number of corrections, I have also taken on-board and implemented the advice on my parent's loan which is now gone.

I would appreciate any final feedback with my first direct regular saver of £3000 about to mature and I am due to receive £5000 shortly following a sale that's came through and I want to ensure this is managed to maximum effect.

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