I'm holding too much "cash"

[BrassicaBabe]

Not sure why I've not read more of this board before. So much good information! I can talk about sums more than minimum wage here without the MN pile on right?

I'm early 50s. My work is short term contracts. Inside IR35 for anyone familiar.

I have a private pension, share ISA, premium bonds (full holding), high interest (easy access) savings and basic high street bank savings. Oh and a VCT investment.

So far in 2024-25 I haven't added anything to my pension or ISA. My contract ends in December and I don't think it will be renewed. Hey, these things happen. But I'm letting this uncertainty mean that I'm holding too much cash. And by cash for me this means everything listed above except the pension, VCT and IISA. But i guess if times get V HARD there is nothing to stop me withdrawing from the ISA is there.

I should be braver shouldn't I?

If I added the max to my pension AND ISA I would still have rather more than 6months spending in reserve. What do I do at that point?

Oh. And my pension and ISA is managed by the same company. Maybe I should find another company to open an isa with in this tax year to spread the risk?

I think that if you can max out your pension and stocks and shares ISA and have your six months of expenses plus any reserve for tax and any big expenses you have coming up e.g car repairs, new car or boiler, you should invest the rest in stocks and shares.

If things get hairy, you can realise investments. That said I am so cautious, I would allow myself some slack on cash.

I would keep 12 months expenses as cash and put the rest in the pension for the tax relief.

After using up your annual ISA and pension allowances, the next thing to look at by way of a tax wrapper would be an Investment Bond. Especially useful if you are Higher or Additional Rate taxpayer now but would expect to be Non/Basic rate in the future.

Is your mortgage paid off?