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To think this is an ok financial state?

33 replies

Fishywishy1 · 07/11/2025 13:23

I posted a thread looking for advice on what to do with our cash but got the impression we could be in a better state!? What do you think?
we have a property worth 500k and owe 400k mortgage (new mortgage)
we have cash saving of about approx 200k (obtained after mortgage)
we earn 120k ish between us
save 2k per month.
2dc with 30k savings in a account for them, this gets 400 per month (separate from the 2k)

I think it’s ok although the high mortgage is a lot yes. We are late 30’s.

OP posts:
Fishywishy1 · 07/11/2025 14:03

Mortgage is variable so we can pay off with no penalty

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InveterateWineDrinker · 07/11/2025 14:15

In the round, that seems extremely comfortable and probably a far better position than the average family.

However, with £200k in cash I'd be looking to invest the surplus £2k in stocks and shares rather than piling up more cash.

I presume you are using all the tax wrappers available to you and the DCs?

Fishywishy1 · 07/11/2025 14:17

InveterateWineDrinker · 07/11/2025 14:15

In the round, that seems extremely comfortable and probably a far better position than the average family.

However, with £200k in cash I'd be looking to invest the surplus £2k in stocks and shares rather than piling up more cash.

I presume you are using all the tax wrappers available to you and the DCs?

I have no idea what you mean by tax wrappers? 😂

OP posts:
InveterateWineDrinker · 07/11/2025 14:20

ISA allowances, and pensions.

mynameiscalypso · 07/11/2025 14:21

What’s your mortgage deal like?

Raindancer411 · 07/11/2025 14:21

To be honest, that is a better state than most people, as previous persons on. It’s a lot better the me!!!

I would payoff some of the mortgage to take the monthly fees down.

Fishywishy1 · 07/11/2025 14:25

InveterateWineDrinker · 07/11/2025 14:20

ISA allowances, and pensions.

Our pensions are good, we get 10% from employer and we can do up to 10% ourselves. We are happy enough with those, though I may increase mine next year.

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Fishywishy1 · 07/11/2025 14:26

mynameiscalypso · 07/11/2025 14:21

What’s your mortgage deal like?

3.95 variable…I think

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Fishywishy1 · 07/11/2025 14:29

Raindancer411 · 07/11/2025 14:21

To be honest, that is a better state than most people, as previous persons on. It’s a lot better the me!!!

I would payoff some of the mortgage to take the monthly fees down.

As we are variable I don’t think it would reduce the monthly payment but I’ll look into it.

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InveterateWineDrinker · 07/11/2025 14:30

Fishywishy1 · 07/11/2025 14:25

Our pensions are good, we get 10% from employer and we can do up to 10% ourselves. We are happy enough with those, though I may increase mine next year.

I am putting £2,880 a year into my DCs SIPPs (pensions), which the tax man then tops up by another £720. They are 8 and 5 and won't be able to touch it for 50 years, by which time the value should have grown exponentially, all free of CGT.

Worth considering?

FuzzyWolf · 07/11/2025 14:30

You should ideally have at least three months’ salary saved. I know many don’t but given the current situation, it would be prudent to do so. Therefore, that really is your cash saving and you should put that away as an emergency fund. That means you really don’t have anything left.

What is your children saving pots going towards? Is it in their names or your names?

Fishywishy1 · 07/11/2025 14:35

InveterateWineDrinker · 07/11/2025 14:30

I am putting £2,880 a year into my DCs SIPPs (pensions), which the tax man then tops up by another £720. They are 8 and 5 and won't be able to touch it for 50 years, by which time the value should have grown exponentially, all free of CGT.

Worth considering?

We are not UK based. Sorry i mentioned that in the original thread but forgot to say it in this one. I will look for similar here. Although we need the money for university costs also.

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Switcher · 07/11/2025 14:36

That's way too much in cash if you're just putting that 💰 in savings accounts. Open a premium bonds account with NS&I, put 50k in that (it's near instant access so represents rainy day savings), then pay 100k into the mortgage, and max out stocks and shares isa allowances with the rest. Don't bother with cash isas. Going forward, too up the pension contributions rather than keeping in savings and keep the ISAs ticking over. That will get you better retirement options.

Fishywishy1 · 07/11/2025 14:48

Switcher · 07/11/2025 14:36

That's way too much in cash if you're just putting that 💰 in savings accounts. Open a premium bonds account with NS&I, put 50k in that (it's near instant access so represents rainy day savings), then pay 100k into the mortgage, and max out stocks and shares isa allowances with the rest. Don't bother with cash isas. Going forward, too up the pension contributions rather than keeping in savings and keep the ISAs ticking over. That will get you better retirement options.

We will definitely pay a chunk off mortgage. Want to keep some cash savings 30-50k? No idea what to do with the rest 😬

OP posts:
Switcher · 07/11/2025 14:57

Fishywishy1 · 07/11/2025 14:48

We will definitely pay a chunk off mortgage. Want to keep some cash savings 30-50k? No idea what to do with the rest 😬

Yeah you can keep up to 50k in premium bonds. The name is a bit misleading, it's you giving cash to the government and they pay you interest (which is what the average "win" actually is). It averages about 7% a years with tiny potential for much bigger upside. They let you redeem any amount at any time, so it effectively is cash. And you do not have to pay tax on the interest. Your current balances if held outside any tax wrapper will probably be taking you over the tax free amount.

Switcher · 07/11/2025 14:59

Sorry I missed your update on your domicile. I think you'd best consult a financial adviser, as it's a substantial amount of money, and you need to make sure you know what all your options are wherever you live.

Fishywishy1 · 07/11/2025 16:01

Switcher · 07/11/2025 14:59

Sorry I missed your update on your domicile. I think you'd best consult a financial adviser, as it's a substantial amount of money, and you need to make sure you know what all your options are wherever you live.

Yes I think a financial advisor might be best actually. Thank you

OP posts:
NoctuaAthene · 07/11/2025 16:38

I read your other thread, I don't think people were saying you're in a bad position as such, how could that be, you have good incomes, pensions, secure housing and more than twice your income in savings? Do you really need to ask the question? I think the critique you were getting on your other thread was more that in the nicest possible way you could probably be a little better educated on financial matters to make your clearly pretty good financial situation work better for you.

I think you are in Ireland, correct? Not being in the UK makes a huge difference, and the fact you didn't mention that upfront I think shows a little of what I mean - one of the most important ways to be savvy about your money is understanding how and why you are paying tax and how (entirely within the system and legally, not talking about anything dodgy here) you can maximize your income while avoiding paying extra unnecessary tax. People are mistakenly advising you on products like ISAs and premium bonds based on the UK tax system and products available in the UK market. You need to understand what the tax system is in your country for what tax-efficient savings mechanisms are available there. It may all be completely different where you are.

But as general/universal advice you only want to keep 6ish months salary in cash as an emergency fund (and even then it should be earning some interest albeit usually less due to being in an easy access fund). So you are definitely too heavy in cash, unless you have some foreseeable event coming up where you need that money accessible rather than it being intended as long-term savings. I'd say you should probably be looking to invest 50%-75% of your savings and to set up some regular investments for your monthly £2k savings. Personally I'd do a mixture of medium and low risk investment vehicles, but risk appetite is a personal thing. Or potentially you could use some of your cash to reduce your mortgage but you need to understand what interest you are paying on that and how that compares to the interest you would earn in an alternative investment - usually the investment returns outstrips the mortgage interest but it depends on your risk appetite and, as I say above, the tax regime. Again, seemingly not knowing what mortgage interest rate you are on or not sharing that when you're asking the question shows a bit of a lack of knowledge, as this is absolutely fundamental to decisions about whether to overpay or not...

I don't mean to be harsh here, it's understandable to be a bit clueless about money, plenty of people are but there's plenty of good resources to educate yourself out there...

Cantseetreesforthewood · 07/11/2025 17:04

You've got a mortgage at just over 3x earnings, and 200,000 in the bank.
That's bloody brilliant. Definitely look at ways to make that cash work harder, but it's a fabulous basis to be working from.

Fishywishy1 · 08/11/2025 09:15

NoctuaAthene · 07/11/2025 16:38

I read your other thread, I don't think people were saying you're in a bad position as such, how could that be, you have good incomes, pensions, secure housing and more than twice your income in savings? Do you really need to ask the question? I think the critique you were getting on your other thread was more that in the nicest possible way you could probably be a little better educated on financial matters to make your clearly pretty good financial situation work better for you.

I think you are in Ireland, correct? Not being in the UK makes a huge difference, and the fact you didn't mention that upfront I think shows a little of what I mean - one of the most important ways to be savvy about your money is understanding how and why you are paying tax and how (entirely within the system and legally, not talking about anything dodgy here) you can maximize your income while avoiding paying extra unnecessary tax. People are mistakenly advising you on products like ISAs and premium bonds based on the UK tax system and products available in the UK market. You need to understand what the tax system is in your country for what tax-efficient savings mechanisms are available there. It may all be completely different where you are.

But as general/universal advice you only want to keep 6ish months salary in cash as an emergency fund (and even then it should be earning some interest albeit usually less due to being in an easy access fund). So you are definitely too heavy in cash, unless you have some foreseeable event coming up where you need that money accessible rather than it being intended as long-term savings. I'd say you should probably be looking to invest 50%-75% of your savings and to set up some regular investments for your monthly £2k savings. Personally I'd do a mixture of medium and low risk investment vehicles, but risk appetite is a personal thing. Or potentially you could use some of your cash to reduce your mortgage but you need to understand what interest you are paying on that and how that compares to the interest you would earn in an alternative investment - usually the investment returns outstrips the mortgage interest but it depends on your risk appetite and, as I say above, the tax regime. Again, seemingly not knowing what mortgage interest rate you are on or not sharing that when you're asking the question shows a bit of a lack of knowledge, as this is absolutely fundamental to decisions about whether to overpay or not...

I don't mean to be harsh here, it's understandable to be a bit clueless about money, plenty of people are but there's plenty of good resources to educate yourself out there...

thanks, that’s why I’m asking. I have very little knowledge/experience.

OP posts:
BuffaloCauliflower · 08/11/2025 09:19

You’re extremely comfortable in my opinion and I can only dream of such a cushion .

Theyreeatingthedogs · 08/11/2025 09:19

Fishywishy1 · 07/11/2025 14:25

Our pensions are good, we get 10% from employer and we can do up to 10% ourselves. We are happy enough with those, though I may increase mine next year.

What's stopping you doing it now? Putting it in a pension should produce a better return than keeping it in cash. Only disadvantage is that you cannot access it but you have plenty cash in hand.

Theyreeatingthedogs · 08/11/2025 09:22

Switcher · 07/11/2025 14:57

Yeah you can keep up to 50k in premium bonds. The name is a bit misleading, it's you giving cash to the government and they pay you interest (which is what the average "win" actually is). It averages about 7% a years with tiny potential for much bigger upside. They let you redeem any amount at any time, so it effectively is cash. And you do not have to pay tax on the interest. Your current balances if held outside any tax wrapper will probably be taking you over the tax free amount.

Hardly!!!!! Present average return is 3.6%. Premium bonds are shit.

Fishywishy1 · 08/11/2025 09:36

Theyreeatingthedogs · 08/11/2025 09:19

What's stopping you doing it now? Putting it in a pension should produce a better return than keeping it in cash. Only disadvantage is that you cannot access it but you have plenty cash in hand.

We can only access the system to make updates at certain points in the year. When we change contracts, when we get our bonus/pay increase and one other window in the years next access window is march/april.

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Fishywishy1 · 08/11/2025 10:31

BuffaloCauliflower · 08/11/2025 09:19

You’re extremely comfortable in my opinion and I can only dream of such a cushion .

Thank you, it hasn’t always been this way. But I’m determined to make the money work for us somehow

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