What to do with 30k savings?

[Maboscelar]

I'm married, DH is 58 and I'm 50, I don't really work (a bit, for myself, earning about £200/week before tax) DH earns 60k. We have a mortgage of about 100k with 12 years left.

Our only savings are about 30k, one third in a joint savings account and the rest in a current account in my name at the moment.

We have two kids, both still at home and with special needs so I'll need to be carer for a while yet.

We just about survive on DH's salary, we struggle to go on holiday but can afford to eat, heat, etc.

DH has a pension, I do not except for a few from jobs I had previously, maybe ten years' of paying in on a relatively low wage.

We owe a family member 10k which we pay back at about 2k/year with no interest. Family member isn't too bothered about being paid back as long as we pay something every so often.

We aren't sure what best to do with our money. Overpay the mortgage? Invest in a pension for me? Pay off family member?

My parents are well off and keep telling me not to worry about a pension. IF they don't need care (big if these days!) then I will inherit at least 400k in property (my half) and likely quite a lot more as there are investments I don't know the details of. But of course this may all go on care and there's inheritance tax etc.

I'm considering talking to a financial adviser but thought it might be worth asking here too. I've never had 30k before, we've saved so hard, I don't know what to do with it!

You certainly need to put the money somewhere earning interest- look at moneysaving expert website. tax free isas a good plan
Worth looking at what you would get as state pension- you can get a free estimate on line. Gov.uk.

Honestly I'd pay the family member back. I get that they are content with the status quo, but that might well be before they learn that you have 30k under you.

I’d pay it off the mortgage. That will reduce your monthly outgoings letting you save more, as well as giving you more security should DH suddenly be unable to work.

Look on MSE at high interest savings accounts.

If the family member is genuinely happy for you to continue to pay as you are I'd leave that alone.

It feels important that you should have a pension but I'd not want to lock that money away in case you need it. Are you a tax payer or is your income below the personal tax allowance? The main advantage of a pension is the government topping it up to the turn of your taxation, not sure that applies if you don't pay tax.

I'd be putting some or all of that into the best cash isa you can find. Maybe £20k in one name into a fixed term with a higher rate and £10k in the other into an instant access.

This. I can't imagine sitting on £30k in savings whilst owing a family member money. It just doesn't sit right at all.

On the flip side of it, if I'd loaned a family member money, then found out they were sitting on three times that in savings, on which they were earning interest whilst my money simply lost value over time...well, I'd be pissed off to put it mildly.

1. pay off the family member. This debt won’t sort itself. Unless it’s your mum and dad, pay it off.
2. Keep back £5k for rainy day issues, like kids needing help, car, oven, boiler replacing etc
3. pay off £15k mortgage, assuming no penalty fees

those saying high interest cash isa, we need to know what mortgage rate you’re paying and when/if it’s up for renewal.

Say you’re on 2.5% and paying back at 3.5%, then it makes sense to put cash in high interest isa.

if on the other hand you’re mortgage is at 5% or higher then there’s no point using isa cash paying 5% because you’re not making anything. They cancel each other out or may make you worse off.

let us know the details and can advise you further.

interest rates aren’t looking likely to fall any time soon. Inflation is here to stay and USA inflation going higher also and where they go we follow.

Also, MPC can’t reduce rates at the moment, pound at its weakest since 2022, when there was the Truss run and things looking dicey again.

Pay the family member back

Pay back the family member
£10 cash isa as emergency fund
£10k in a private pension for you

It depends on your mortgage rate. It may be worth putting it in to a stocks and shares ISA, that’s 20k. I think 4.5% is the best rates currently or thereabouts.

Get on to the MSE website it’s absolutely not worth speaking to a financial adviser for such an amount. Get in touch with pensionwise, both of you should do this and find out about all pensions plus how many years NI you have paid in. Then you can contact all your small pension providers and get them to give you a forecast/statement. It’s a free service from the Government.

I will be honest at your age I would prioritise paying off your mortgage.

Pay back the money, first. Circumstances for borrower and lender could change at any point.

Buy Australian dollars while the pound is high ?

Re the loan, family member is dad, he really doesn't want it back at any other rate, he would give it back to me!

I'll look into the suggestions thank you.

Re pension, I sometimes pay tax but usually don't, I don't generally earn enough, but I'm all paid up in terms of my state pension so I'll get whatever it is you get (a pittance!).

I would like to pay the mortgage off a bit but wasn't sure if that was the best option.

If you can pay a lump sum off the mortgage (check small print) you would be able to reduce your monthly repayments or finish paying off your mortgage earlier, and pay a lot less interest

There are early repayment calculators online that show you how much difference you can make .

It's always good to keep some savings in an interest account for emergencies too.

https://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator/

Use this to check, op.