Long term savings/pension

[Itsaburrdiee]

My husband is 39 and to date has some, but not a lot in the way of pension provision. For the last few years he has contributed to his company's pension plan. He pays in £100, they pay in £50. We have also been jointly paying into an account £50 per month which will be long term savings i.e. we will continue saving, hopefully in greater amounts until we retire.

We have almost £1000 in this account now. My question is where should we be saving this? We don't use our ISA anywhere near to capacity but I'm not keen on this joint money being in only one name. Savings rates are poor. Will it make any difference if we just keep saving in our current savings account with poor interest or is there a better option?

long-term savings in cash make no sense at all at the moment with rates well below inflation. The best you can get now is 3% and inflation is much higher than that unless you eat petrol or flatscreen TVs. That £1000 will earn you £30 a year before tax.

you should have ready cash available for job loss or other crisis, about six months worth of expenses. For anything else, you need to look at investments and think very long term.

If you both pay tax then why not open two ISA's and put half in each. But it's hardly worth scrimping to try and save at the present time when interest rates are so low. What about paying a sum off your mortgage if you have one. But take advice first.

I'd say you either need to speak to an independent financial adviser or do some research yourself.

Any advice you get on here will reflect the posters individual attitude to risk (ie how safe you want your investment to be), so will vary widely according to circumstances, preferences, expertise etc.

You could start by looking at www.moneysavingexpert.com - lots of information on there about where to start with investing and savings. Also a good book if you're thinking about investing in the stock market is Smarter Investing by Tim Hale.

We put our savings into properties as don't trust pension schemes.
The value of property is not going to go down and longer term will provide a far better interest than a savings account.

Pension savings are tax free so if these are truly long term you should save it all in a pension scheme and get your income tax back (incl higher rate). You would have a claim to your husbands pension if you divorce, also. This is the best thing to do with money that is not enough to put into property IMO.

Personally we don't bother with ISA's as the interest rate is so rubbish & a lot you can't just access incase of emergency.
My husband has been putting a pension away since he was 20 & he's about to turn 38, £250 a month is what we put in it & the company make it up to £1k. We've just decided to join the company's share scheme which has put the amount you can commit each month to up to £500, which we are doing. He works for a major electricity provider & no-one's ever lost out when joining the scheme, they've only ever made money & lot's of it. We knew we needed to do something other than a pension & didn't really fancy property just because of risks that go along with it etc.
It wasn't until i hit 31 that i realised we really did need to pull our finger out as we aren't going to earn a wage forever & by the time my hubby reaches 55 he'll have been doing 12hr day & night shifts for 35 years & it'll be about time he retires from the rat race & take a much slower part time job!
Good luck with what you decide!

I'd suggest you take advantage of your individual ISA allowances and put the same amount into each during the year. If you've only got £1000 so far, that's really 'rainy day money' that you might need in a hurry so it's wise to have it reasonably accessible rather than tied up. When your ISAs get higher than, say, six months' expenses that's the time to think about longer-term ways to make your money work. A lot of people use the spare to pay off a chunk of the mortgage, for example. Some go for fixed rate bonds that tie money up for a few years at a time. If you have a workplace pension you could top that up or - if you're happy to leave your money alone for 10+ years and are comfortable with some risk - there are all kinds of stock-market related investments.

But boost your ISA balances first.