Starting from scratch - any advice?

[BuffaloCauliflower]

So DH and I are finally about to be first time buyers, we’re 35 and 34. Mortgage will be huge but manageable, so after only really saving for a deposit the last few years I’d like to start looking at what else we can be doing with our money. I didn’t grow up in a financially secure house and I don’t want that for my kids. We’re deep in the expensive childcare years at the moment so won’t be able to do much now, but I know the sooner the better with investments and things, we’ll be able to up contributions in future. I don’t have much pension as I didn’t start proper work until 27 as I was a slightly mature student, and I work part time now in a professional role and probably will for the foreseeable for mental health reasons as well as childcare. DH is a higher rate tax payer and likely to keep seeing increases, but we probably won’t be wildly wealthy from work income so want to be strategic. House we’re buying has a long mortgage term but is a family home we could stay in forever.

Ive read threads here and there’s clearly so much knowledge but it reads as another language to me! Would anyone be willing to offer me any advice to get us started? I know a bit about ISAs but that’s about it, and not the tax implications. Should we be thinking about SIPPs? Good platforms or companies to use? Any books I should read?

Thanks in advance 🙂

First thing is an emergency fund. At least 3 months expenses saved in cash in an easy access account.

Then you can think about investing. Work out your goals first - what you are investing for. Early retirement? More comfortable retirement at normal age? Money for the children to use for university/house deposit?

Workplace pensions are usually the best value - particularly for a higher rate taxpayer. If it's taken from gross salary you save both tax and NI payments, and your employer may match contribitions up to a certain level. So check you are making the most of those. But there are limitations to how and when you can access pension savings, so they won't be the best option for some people's goals.

Buy meaningful money handbook - it's the single book you need and I found it life changing and super easy / digestible

@namestevalian Thanks for mentioning the book.
@BuffaloCauliflower Before you start to invest, you need to be spending less than you earn.
Free chapter from the book (in audio form): meaningfulmoney.tv/2018/09/19/launching-the-meaningfulmoney-handbook-pt-3/

Once you are spending less than you earn and have an emergency fund, paid off consumer debt, then you can invest. Most people will invest using an ISA and a Pension. ISA and Pension are wrappers... they go around the sweet. The investments are the sweet, inside the wrapper. You don't invest in just one company... a single sweet is not as good as a box of chocolates, or a multi-pack.

Some investments are like a multi-pack. They have one fund (the multi-pack wrapper) and inside that fund are a number of other funds (imagine several tubes of smarties) and inside each tube there are investments in companies (the smarties).

The Meaningful Money Handbook is a good book to start with as it explains the basics of money mindset, budgeting, insurance and investing. Another book to get is The Simple Path To Wealth by JL Collins. That is by an author in the United States, so some things are a little different here but general principles apply. It is about investing across a large number of companies, not just a few. For UK based investors that means using a global fund... Fidelity World, HSBC World, FTSE Global All Cap... or using a ready made "multi-pack" fund such as Vanguard Lifestrategy, Black Rock My Map.

Pensions can seem complicated but they are not once you understand the basics. Pension is the wrapper. Inside that you could have exactly the same investment as you have in a Stocks & Shares ISA. Though often the choice of investments within a workplace pension is limited.

Pension has age restricted access. There are tax advantages to using it, but key initial thing to learn is that pension has restricted access.

ISA is accessible. Not as good tax wise but still better than investing without being inside a tax wrapper. ISA gives tax free growth, and can be accessed anytime.

m.youtube.com/watch?v=E2RDvUiRRG8

Aha Nick I know you from the FB groups !

I wish I was on commission selling this book I recommend it to anyone who will listen - changed my life

Great to hear it has changed your life.

Pete really does make personal finance easy to understand. The next book, on retirement planning, should be out in late 2024.

Meanwhile, Pete has just Whatsapped me, as need to get website ready for a video coming out late this afternoon.

This is the question I needed to ask too. I've just reserved the book from the library, appreciate the recommendation.