Am I investing in my future plans correctly?

[loveyorkshiredales]

Looking for a new start next year as I will have £1k disposable income. i have £200 extra to treat myself or occasionally cloth shop etc for children. Background-I'm 37,three children 13 ,11 and 6. i have 5k in PB, and 1k in bank savings account for emergencies.

Saving plans : £25 pm to PBs
£400 to S&s ISA.
rest in monthly savers.

Pension plans:One pension with previous employer , current fund value 32k. Joined new employer in the last two years : pension fund value already 14k, employer and my contributions are 600.I'm hoping to retire by 60.

Mortgage: Dh's responsibility. I pay water and utility bills.He earns double than me.Current house at least for another 20 years.

Children's savings: only saved for older children but currently in fixed bond accounts - 3k each earning 5% for another two years.I have nt put anything in place for my younger yet. which i will put in place in a year or 2.

what should I prioritise? How can i do better?

Also we take children holidays- 1 abroad and couple of short breaks in UK.

Just looking for reassurances am i doing okay? or if not how can i improve my financial situation better for the future.

Sorry should have said can save £1k a month

Can you clarify if you will have an extra £1000 to save as well as the existing pension and savings you've described in you post?

Sorry £1k includes £25pm to PBs and £400 to s&s ISA- this is the plan. Pensions are not included in this money. Also £200 is separate which is for general expense etc

Regarding pensions, I'm hoping that will be enough by the time I will be 60. I am not looking to invest anymore in the pensions.Mortgage will be paid off in 23 years time and again it's DH's responsibility. God forbid something happens we have life and critical illness in place for mortgage

Maybe a financial advisor can come along and give better advice, but I'd say your company pension contributions are solid.

£1000 per month to save is above average - so be rest assured you're doing relatively well.

What and how you save depends on your goals. Saving now for your kids means they benefit from years of compound interest early - so it might save you down the line when it comes to education/uni etc as they should have a good nest egg at 18.

I like to have an emergency fund in PB as it gives me peace of mind that I have the readies available. Plus you might win big, tax free, which is a nice thought. Some say PB'S are a bad investment, but If you like them for the reasons I do then that's fine.

You really need to decided how you want your money to work in the medium and long term. If you want to retire early maybe a private pension you can access from 57 would be good route.

I'm going see what others say as we are in a similar situation.

Emergency fund is £1k. That to me would be too low to start doing any investing.
3-6 months of expenses as emergency fund, would be more suitable in my view.

If you want to have some of that emergency fund in premium bonds then that is fine as those are fairly accessible (a few days) but I would not have emergency fund money invested in S&S ISA.

So is £6k (£5k PB + £1k bank) enough emergency fund based on your expenses?

Maybe as a 3 month emergency fund but may be a bit low for a 6 month.

May be useful to go through the FI Flowchart: ukpersonal.finance/flowchart/

I can access PB bonds at any time

That flow chart is brilliant. Thanks for sharing

Pension vs ISA is always tricky. Pension wins but it is not accessible. So think about short term and long term goals. Tip towards today (so accessible money) then tip towards the future.

Podcast: meaningfulmoney.tv/2024/10/30/helpful-basics-pension-vs-isa/

Thank you for your advice. so £400 towards S&S ISA and rest £500 to monthly savers etc would be wise

You're just about young enough to open a Lifetime ISA which gives you a 25% government uplift on upto 4k per annum. You can access it at 60 without penalty so you could live off those funds for several years. Then access your workplace pension when those funds run out - giving the workplace pension fund chance to grow bigger.

@Clipclopflop how does lifetime ISA work? Do you get interest on top of this? or just 25% of your contribution?

https://www.moneysavingexpert.com/savings/lifetime-isas/

As unbiased as it gets explanation

@Clipclopflop Thank you i have opened LISA. set up a standing order for £100 pm. This is free money, glad i have opened it.

I know you have said you don't want to save more into a pension, but as early retirement is a goal, given the tax relief on a pension, I would consider adding more, unless you have maxed it out. That is not to say that short and medium term savings are not also important.

@GOODCAT i have never looked at pensions, how much you can put a year? current contribution to my pension us £7200 a year.

Because your pension plan is so dependent on you and your circumstances - to understand all that we'd need to ask you lots of outing quesions. I think your best bet is to start your research here and apply it to your life goals and circumstances.

www.gov.uk/plan-retirement-income/get-financial-advice

I really wouldn’t bother with PBs in your shoes, unless you like them as a bit of fun (which is fine). Expected return on £300 PBs over an average year is zero. You would be better putting it into an instant access account.

Essentially you get tax relief on the contributions you make. You can put in up to £60k a year. You may want to read up about pensions on the martin lewis mse site. Also look at the moneywise pension calculator as that should give you an idea of the pension income you are likely to get if you continue to contribute as you do now.