Hoping for financial advice please

[Newnameformoneyadvice]

I'd really appreciate some advice please

We have some savings and no idea what to do for the best.

44k joint in premium bonds
20k joint locked away in a 6% interest account for another 9 months.

Kids each have £3k also in premium bonds. I'm disinclined to put this into an account where they get access at 18 - at the moment I can remove it back into my name.

I have my own £3k in an instant access account. No interest to speak of.

My husband is a higher rate taxpayer and has a workplace pension - only contributing 10% right now and the pot is only at £25k.

I have a limited company and no pension.

Company should see about £7k profit in April which could be paid directly into a pension and reduce my corporation tax bill. Would need to speak to IFA for advice I think as to best product.

Mortgage fixed for 18 more months at 4.99%.

My main question is what should we do with our savings to make them work better for us?

I'm thinking it's between either an ISA each or retirement provision for me.

I feel like we need to keep around £10k accessible in case of emergency though we do have access to interest free credit.

We are both 38 and kids are primary KS2.

Would really appreciate any advice. Thank you.

For your pension you do not need advice. You can simply setup a pension which accepts payments from the limited company. Vanguard SIPP does if you have a company debit card in your name. Interactive Investor does. I expect AJ Bell would accept company payment. Not all will, so check but most pension/SIPP providers will.

Choose a global fund, or a multi-asset like Lifestrategy, MyMap. Keep it simple.

m.youtube.com/watch?v=fu4n1XY0f9Q

Personally I prioritise pension because it pays for your retirement. The state pension is shite and and you only get it in full if you have 35 yrs contributions - most don't - and even then it's only 11k/yr.

If he's a higher rate tax payer put as much as you can in the pension as 40% of the contribution will be tax you would have paid. If you get a contribution from your employer even better. Bonuses also as the gross bonus goes into the pension,

It's basically your income for age 65-95 so very important. The general advice is to put in as much as you can, twice (as a %) the age you started it, and when you get your tax free lump put that in ISAs for more.

Pension AND ISA. It is not one or the other, you need to do both. Initially tip towards accessible money, ISA, first and then tip towards pension as more tax efficient but not accessible.

Is £10k in emergency fund enough? If one of you lose your income and it took 18 months to replace that, would £10k cover the shortfall? You may get replacement income faster but you may not. I was made redundant in April 2021 and did not replace that income until Sept 2022.

ISA fund choice would be similar to that for pension. View it as being a 5 year+ investment. For cash savings use interest paying savings accounts, many are paying 4% plus... alas not the 6% anymore.

I feel I do need advice as since I own my own company my options may be different to standard employees.

I can't put in 76% of my income to a pension, I'll be very lucky to manage £10k a year.

We may be able to increase DH payments above 10% but again not to double his age.

Do you suggest then rather than doing my pension we chuck all spare money as his due to the 40% tax bump?

I would be very shocked if either of us couldn't get work for 18 months and I'd get a minimum wage job and at least earn 23k if my company failed. We would also be able to release the £20k in high interest account and just lose the interest.

We have only the £44k really to play with so maximising 2 ISAS and paying two pension doesn't look like a possibility.

It would be great to have concrete advice on what our priority should be

Replying again - all of these pension options are so overwhelming to me - is there one which you recommend? I don't have the financial savvy to manage it at all.

The recommendation is to contribute a percentage equal to half your age into a pension. So if, for example, you are 30, you should contribute 15%. I don’t know where the previous poster got twice your age from!

Ask your accountant for advice re offsetting your CT. S/he may also be able to recommend a pension advisor.

That feels more manageable!

TBH the % is moot for me atm as I'm only taking £14000 out of my company until I'm more profitable, but that will leave £7-10k as profit I can either take as dividends or invest in pension.

Ideally I want to be taking £50k out of my business so paying a pension of £10k a year would be a good start.

DH clearly needs to up his contributions. Just not sure how we will afford it atm.

Good idea to ask for a recommendation.

Accountant has advised to take maximum tax free salary and dividends then throw remaining profit into pension in order to have 0 corp tax

I gradually increase mine. So, if I get a pay rise, I increase by a small amount (usually 1%) at that point. I have increased by 1% this month as I know that the NI changes mean that I would (without the increased pension contribution) get slightly more take home. If you’ve never had it you can’t miss it is my motto!

AJ Bell do accept company pension payments. It is worth speaking to an IFA to make sure your pension is in the most appropriate funds. Don't forget to check your NI record on government gateway to be sure you have sufficient contributions and in case you need to pay any extra

@Dibblydoodahdah he has been told no pay increase this year :(

We both have 17 years full contributions and 31 years left to make contributions to the state pension

I would have 500 each dc in premium bonds, 500 in cash isa and rest in stocks and shares isa

Go and pay a financial adviser who can accurately assess your appetite and capacity for risk.