Advice for spare cash

[Temporaryname158]

I have a 20 year mortgage, my rate is fixed at 4% for 10 years.

I have 6 months back up cash should I become unemployed and have some paid sickness at work etc. I also pay into a workplace pension and cannot increase contributions to this pension

I don’t have a lot of spare cash, perhaps £100 a month after I’ve paid/done all I want and need to. It’s not every month but fairly often

my question is what would you do with it?

I have until now have been funnelling all spare money into mortgage overpayments so I can pay it off in 10 years and be mortgage free at 52 years old.

to those older and/or wiser than myself, am I doing the right thing?? If not, what should I do?

any advice is appreciated. I am just not very financially savvy!

You have spare money but not every month. I think that is the key thing as it means paying it to a pension, or to a Stocks & Shares ISA may be good long term, you may not meet the account minimum terms - you could shop around to find something that fits, as some have very low minimums.

You want to pay off the mortgage. That to me is a key motivator. You have a goal and you are working towards that. So saving money in an instant access account, then paying that once a year off the mortgage may well work well for you. You benefit from some interest on the money whilst it is in the instant access account, and you benefit from reducing the capital of the mortgage. Your mortgage provider may accept payment more frequently than annually, so check terms, as maybe once every 3 months would work.

Avoid maths games. Sure you may get 4.4% in a savings account but pay 4% on the mortgage... who really cares. Your goal is to repay the mortgage. Cash loses to inflation anyway, so 4.4% loses money when inflation is 7.9%. Avoid maths games... set a goal and do what you can to achieve that.

Personally I'd put it in a savings account with a high rate of interest, let it build up to a few thousand, and then think about what to do next (which will be in a few years time). You might want to carry on saving; overpay the mortgage; or think "sod it, life's for living" and spend it on a holiday.

Are you getting a decent rate of interest on your emergency savings?

I’m getting 3.9% on the emergency savings as I don’t want them locked away long term in case I need them.

So as Nannynick says for the sake of 0.1% there isn’t a lot in it.

I’ll have a look at s and s ISA’s thank you but for now will continue to pay off the mortgage where I can

There are quite a few easy access accounts that are paying around 4.5%. Some are truly easy access and others have a set amount of withdrawals per year.

There are lots of useful information on the Moneysaving Expert site about current top savings accounts and lots of very interesting and informative chat (which I have benefited from) on the forum. See links below.

https://www.moneysavingexpert.com/savings/

https://forums.moneysavingexpert.com/categories/savings-investments