Savings £100-200 per month

[littlematchstickgirl]

Hi, looking for advice on best thing to do please.

Have a mortgage 16 years left, 4 on a fixed rate
Have emergency fund in instant access account
Have work pension
No debt (other than mortgage)

I want to save / invest £100-200 per month.

Is it best to put an extra £100 into pension as AVC (don't pay AVC at the moment) and £100 into stocks & shares ISA? I don't have one yet.

I don't want to put it all into pension, as then it's untouchable until I'm older. What would you recommend? Thank you for advice!

Have you considered overpaying your mortgage?

What are you saving for?
Do you need instant access to your money?
AVCs you can access at age 55 (currently- it's going up to 57)

I like to have some in a S&S ISA to create a bridge between when you want to retire and when you can access pension.

I also love being mortgage free.

Pension contributions get tax relief.

There is no best, as you do not know what will happen in the future. I you lock the money away (in bricks or in pension) you may have an event where you need the money.

Thank you. Yes, I will try to overpay the mortgage occasionally, but the interest rate is quite low, so I hope to get more from savings/ISA.

I'm going to open a S&S ISA and try to spread what little money I have around! I think I'll open a Vanguard lifestyle one, since I've no idea what I'm doing, and only have a minimal amount of money at the moment.

You're right, locking it all away in bricks / pension may not be the best way.

Thanks for your advice!

Do you have any cash savings other than your emergency fund? If not, I'd split it £100 per month in a cash saving account and £100 in a S&S ISA.

I know a lot of people say inflation will erode the buying power of cash, but I don't think there's enough attention on these boards to the fact that S&S investments risk reducing the capital itself. It's all very well saying invest for the long term and the returns will outstrip savings accounts but that assumes you cash in during a period when the value is higher than you paid initially.

I started investing in S&S ISAs around the year 2000 and values dropped for several years in the early 2000s. My worst performing one was worth less than I had invested for the first 6 years, and it was another 6 years before it never dropped below the initial investment value. Even the other ones were worth less than the initial investment for 4-5 years.

£1,000 in cash will be eroded by inflation over time but at least you'll still have £1,000. If the value of your S&S have dropped an initial investment of £1,000 might be worth £800.

Thank you for your insight. No, I don't have any other savings other than emergency money. It is a very good point that I should save both into S&S and also cash. I'll do that, even though inflation eats into it, I'll still have money in cash if I do that. Thank you

@littlematchstickgirl .

This is a common conundrum.

I've also got the same issues.

We overpay about 50 on the mortgage every month.
I pay a little into an ISA ...s and s most in a vanguard lifestyle fund and also vanguard USA fund.

I don't pay anything into my sipp pension, I am going to start as soon as I can .

I look at the sipp as the big buy when I'm older as I started too late I will never be able to draw enough to live off it. However I'd like enough in there to buy a car. Fix the boiler. Stuff like that

ISA would be again too small to live off but hopefully buy some finer things in life, a theatre trip, small cheap holiday, Christmas food! Some meals out, to punctuate the monitinty of the low money I will be surviving on day to day.

I also put some into pb as another side pot.
Spread it around!