young parents - how best to invest our savings now baby here?(3 Posts)
I could ask my parents, or siblings, or boss for advice and opinions (and I probably will, but it's not fun as I already know all their answers). MN has great wisdom and experience and can, I hope, give me a bit more insight.
We live in the south of UK, very naice area, very expensive. Extended family all here, and I have always really been based here despite a few years in Manchester/London. Me and DP lived in tied accommodation on an estate for a few years, no rent in exchange for DP gardening work, plus I had a FT job too. We saved £24k in these few years - minimal outgoings.
Then we had DD, and for various reasons needed to move house (DD requires one FT parent as has some additional needs). DP is now SAHM and I work FT still.
My wage (£25k) is not enough for us to get a mortgage on a 2/3 bed place here, even with a £24k deposit, which was a bit saddening, but hey ho. So at the moment, I am earning enough to pay rent & bills and we are trying our best to not touch our savings.
My plan was to wait until this DD and possibly one more future DC are 5 and go to school, then DP can have a PT job and pull in about £10k more. this should just tip us over being about to afford mortgage repayments.
HOWEVER that is 5 or 6 years of our savings sat in a bank doing nothing.
We have friends in Liverpool who bought a flat in their street for £25k. They rent it out to a student. I am wondering if we could/should do the same thing, to get our money working for us, in effect. I'm scared -
to buy so far from us, even though we can go and visit to view property, etc
to buy at all, I've never done it
to risk my money - what if we buy a bad investment? Is it very stupid to buy a student "pod" in a large building with communal living areas and believe we will really see returns? Would we ever be able to sell it on?
I suppose it's come up right now as am thinking about pensions. I'm one of two employees so won't be offered workplace pension until June, but it will be approc £90/month out of my pay, which right now, I can't afford. I feel like I'd rather try and stretch onto the property ladder.
Long and rambly, sorry. Any advice, wise ones?
In my opinion, your best bet would be to put the money gradually into the new Lifetime ISA. You can save up to 4K each per year and the governed will top it up by 25%. It can then be used to buy your first property. The rest could go into a low risk fund through a stocks and shares ISA. Also, if you work Monday-Friday, could your wife get a Saturday job? That would make it easier to afford your pension or even have a little bit extra. I think the pension is important to pay towards. Once you retire, you'll need to live on it for another, say, 30 years on it so it's important to start saving early (state pension is a pittance and might not even exist by the time you retire).
Short term money should stay in something safe. All you've listed is unsafe and has risk attached to it. If you are prepared to take some risk, fine. These are not 'steady as you go' options.
jo jo which 'safe' stocks and shares can you list? When you've spent 2 stock market crashes advising clients on investments, come back and say that again.
The only company declared on a LISA is Hargreaves Lansdown, I'd look at that cautiously.
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