Meet the Other Phone. Flexible and made to last.

Meet the Other Phone.
Flexible and made to last.

Buy now

Please or to access all these features

Investments

Discuss investments with other users on our Investment forum. For more advice read our tips for saving for your child's future.

Savings

4 replies

user034883 · 20/06/2024 20:04

Me and DH (both 26) are lucky enough to have secured jobs which will keep us comfortable at this moment in time. We have bought and renovated a house with help of family and don't plan on upsizing anytime soon or ever as it has more than enough room for the amount of children we'd eventually like to have so when it comes to savings this is something we wouldn't have to put money into. After our monthly outgoings we currently have disposable income of about £2500 a month. We do spend on some luxuries and holidays but want to save a bit each month for a long term emergency. What kinds of savings account is best for long term? And if we were to never go into these savings could this be transferred easily into a private pension someday or are we better off putting more into a pension now? I was looking at ISA's but not sure if these are the best option.

OP posts:
GOODCAT · 20/06/2024 20:17

Do a mix of (1) saving towards things like an emergency fund, enough to cover maternity/paternity leave, nursery fees, a replacement car and (2) put more into your pensions, you benefit from the tax relief and long term growth.

NoBinturongsHereMate · 20/06/2024 20:53

The sooner you put money into a pension, the more it is worth. So get some in there soon.

But you need to plan separate pots for different things. Some savings, some investments.

First - emergency fund. Cash savings that will cover at least 3-6 months expenses. Keep this as cash in a high-interest savings account with fairly easy access (not a fixed term one, but one that only allows a few withdrawals a year or has an interest rate penaly for withdrawing without notice will discouraged you from spending it without thinking). A cash ISA is also an option for this.

You also need a similar cash saving fund for any planned spending in the next 5 or so years - house renovations, maternity cover etc.

Then investments - this covers 'non cash' vehicles (most commonly stock market) that should grow faster than cash and keep ahead of inflation. Investments are for money you won't need to touch for a minimum of 5 to 10 years.

It's useful to have your investments in a mix of an ISA (can access at any age, no tax on growth or when you withdraw) and pension (can't access until your late 50s, no tax on growth, pay some tax on withdrawal but almost always less than the tax bonus you get when you pay in).

The most efficient pension is an employer's pension that pays in before both tax and NI (a private pension gets a tax rebate but not the NI saving). Make sure you pay in enough to get the maximum matched payment from your employer.

sansou · 24/06/2024 20:08

You're 26. This is what I would advise you to do from a 52 yr old's POV now.

£1000 split into your pensions.
£1000 split into your ISAs
£500 travel/entertainment

When I was 26 & DH was 28, it was closer to £500 savings and £2000 on travel/entertainment. Somewhere between the two is probably ideal.

parietal · 24/06/2024 20:16

Definitely ISA and maybe lifetime ISA too.

Then a SIPP invested in a basic tracker fund.

Look up an independent financial advisor and talk things over.

New posts on this thread. Refresh page