In a very lucky position.. what to do with excess savings?

[Cokefirst]

I’m a 29 year old mum of twins and have been quite financially sensible most my life, I am due to go back to work after having 2 years off soon and have abit of a buffer that I don’t know what to do with.

Context:
I have £20k base cash invested.
£8k cash saved into savings pots for 2025 for everything and anything.
By the end of 2025 I should have around £10k excess saved (aside from my pots and base savings).
Do I keep that as a buffer whilst I’m working part time or do I invest it? DH is also saving but he wants a new car so he’s just saving for that.

Also I know I am in a very fortunate position

How is your pension?
whats left on your mortgage?

I'd keep it for private healthcare tbh. It just takes one knee/basal cell carcinoma/need for a private sen assessments to wipe it.

Stick it in a stocks and shares ISA unless you've maximised your allowance for the year.

Premium Bonds? They're not instant-access but you can draw the money down when needed within I think three days notice, and you might win a million pounds.

Hmm... It's not that much in the grand scheme of things. You need to think of it in terms of big purchases. You need a new car? A decent secondhand with less than 10K on the clock is no change from £10K minimum.

I have about the same amount as you. About £8k sits between my current account and various "pots" on my Starling account. Then there's about £18k in a high interest savings account.

I overpay on my mortgage about £150 a month, apart from August and September, which are my "low income" months.

Put what you can in a pension, £2,880 net if you have no earnings this tax year or more if you have some earnings and the rest in a cash or Stocks and Shares ISA.

Pay off mortgage or any loans in the first instance.
If you don't have a mortgage, put it in your pension.
Or stocks and shares ISA.

Keep one account with a couple of thousand in it for "saving for nice things/in the event of a broken dishwasher". This should be an on demand savings account - you won't earn much from this.

Three times your monthly salary should be kept in an cash-based/very safe investment savings account. It shouldn't be instant access - this is your safety net in the event of a larger issue such as a redundancy or cut hours. If it's not instant access you should get a higher interest rate.

Whatever you have left over you can invest. I suggest talking to a financial broker. My advise would be only to invest in regulated products - don't be swayed by proposed high returns on things like foreign property funds or wind farms. They are super risky. You should be looking for something that has a 4-6% annual return.

In about five years, if you keep this up, you should be able to invest is some funds that are a little more aggressive e.g. giving a 6-10% return. That's because you should be able to absorb any losses without it harming your safety net.

I've heard of Premium Bonds all my life but've never bothered to check them out. I will take a look now, but just wondered is there one company or many that controls them? I'm clueless.

@Cokefirst
I completely understand reason you feel you need to add to your post how lucky and privileged you feel to have excess money available, and I know that it’s not what you asked, but it stood out to me.
You are asking for advice on what to do with some money you have available, on an anonymous forum. Hopefully you will get some useful replies, but we shouldn’t be in a position where every time anyone asks anything they feel the need to acknowledge their position. In the same way someone in a less privileged position shouldn’t hesitate from asking for advice because they fear having to justify past choices.

Never really understood having "excess" savings, especially at your age. Savings aren't capped.

Keep saving, put it in an ISA and invest in some equity ETFs.

Trust me - when you hit your mid-40s, sick of work and start to seriously contemplate retirement, that 10k you invested years ago will allow you to retire years earlier than you otherwise could have.

You are being unreasonable to post this in AIBU

You don't have excess savings, you just have a reasonably moderate amount of savings! Use a stocks and shares ISA like most people and keep savings until you buy yourself some real optionality.

Interesting choice, isn't it?

Take a family holiday or three. They are only young for such a small amount of time it's worth making the most of!

Look up NS&I.

Premium Bonds are owned by the govt and rates improve/ decline according to how much cash they want to hold.

They are the only provider. However rates are on the floor and you'd be better to maximise your 20k annual isa limit tnh first.

Why? Everyone knows it's the most active board?

Just to remind you to make sure your national insurance contributions have been met for the last couple of years! It's not that you're fortunate, you have been very very good with money.