Saving monthly

[GreenFingeredNell15]

If you had £200 spare each month how would you save it?

My sister is about 5 years away from retirement and she's not sure what the best thing is to do. And I'm not much help!

Thanks 😊

If she has a private pension, put it in the pension!

The tax contribution makes it worth more immediately.

I would make sure there was an emergency fund, so initially it would be used for that, which is a pile of cash in a bank account or in NS&I Premium Bonds.

Then I would use it to pay off any debt.

Then I would use a pension or ISA depending on the situation. Pension would often be best mathematically due to the tax relief but being 5 years away from retirement it is time to get a plan together for how money will accessed in retirement. Part of that could mean having a two year cash buffer, so when markets are down investments are not sold.

If working for an employer with a salary sacrifice pension scheme, putting more in that could be very tax efficient. So really need to know a lot more about the pension situation and other assets.

Its literally spare money. She has the emergency fund, no debts etc.

She has an AE pension with her employer and she pays 40% into that

So
S&S ISA or
Premium Bonds or
Charitable donations!

She does give to charity already. I suppose pension makes most sense because of tax relief. I don't think she'd considered adding more to her pension. Not sure why!

S&S ISA with a simple multi asset fund in it. Can withdraw anytime, takes a few days, puts the money at risk so it has potential to grow though if used as a very short term store then risk of loss. She has emergency fund though, so it would not be a short term store.

Could give money to grandchildren, putting it in to their Junior ISA.

Pay off any debts first
Spend some now & enjoy life !
Save some, possibly add more into private pension