what to do with savings? (apologies to those who don't have any...)

[elliott]

Just wondering, for those of us fortunate to be able to put money aside into savings, what on earth we should do with it in the current climate?
At the moment I have not done anything. I have a bit of money in equity ISAs, which has presumably plummeted in value, but I am still making monthly contributions on the basis that it is probably a good idea to keep buying during the trough.
Otherwise, I have a few years worth of cash ISAs that are probably earning lousy interest rates now. I have wondered about plundering these to pay off part of the mortgage (which is currently on a crap 5.9% fixed deal) but not sure if this is wise.

What to do? Cash or equities? Pay off mortgage? Or just inertia?

OK, I have made a decision to withdraw most of the money I have in cash ISAs and pay off some of the mortgage (since I still have nearly a year to run on 5.9%). I'll leave enough mortgage to be offset by my 'spending savings' as I call them!

Now, what should I do with the money I save on the mortgage? Where is best for regular savings atm? My experience with equities so far has not been great, I think they are too high risk for people like me who aren't superwealthy but need to provide for pensions and uni expenses. So what would you recommend?

(btw I am slightly disappointed in the response to this thread, I am sure there are more of us who do still have money to put aside into savings...)

I would have thought you are better off using the money you 'save' on the mortgage to continue paying down the mortgage - ie overpay using the money you have 'saved'.

If your interest rate on your mortgate is 5.9%, and you are a 40% taxpayer you would need to be earning something like a 9.8% return on taxable savings to better the impact of saving mortgage interest. I can't see there would be many savings plans with these sorts of returns at the moment. Even if you weren't a tax payer you would need to find a return of over 5.9% to better paying down your mortgage.

I want to pay off my mortgage as quickly as I can and hold a buffer of savings as rainy day in case of redundancy etc. I don't see the point in investing cash in other places until my mortgage has been repaid as the mortgage interest is likely to be more expensive than any return I can get from other investments (at the moment anyway).

Yes, I agree - and I pretty much will have paid off the mortgage if I do this. Because I have an offset arrangement there is no point in reducing it beyond what I have in the offset accounts (which is money I am putting by to pay for big items like holidays, rather than long term savings, plus also both our salaries).
So I will still have a bit of surplus to put by and I am really confused what to do with it. I suppose a fixed rate cash ISA would be the best...but doubt whether they allow monthly contributions. Will look! Dh has no pension atm so should be putting SOMETHING aside long term for that.