- November 30, 2023
- Posted by: legaleseblogger
- Category: Related News
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Financial Analysis and Guidance Request
I am seeking advice on potential improvements to my financial decisions. I am currently 31 years old with a gross annual pay of approximately £60k. My pension salary sacrifice is at 10%, with my company contributing 3%, totaling around £27k. I have investments in Vanguard FTSE Global All Cap Index, Acc at £12k, which I have been contributing to for two years, and Hargreaves Lansdown UBS S&P 500 at £2k, with a monthly contribution of £500.
Additionally, I contribute £1.7k to a joint family account, which covers mortgage and bills. My remaining mortgage balance is £150k for 22 years, at a rate of 1.49%, with two years left on the fixed term. The value of my property is approximately £280k. After deducting tax, pension, investments, and bills, I have around £1k left per month.
Here are my specific questions:
1. Is splitting my S&S ISA contributions the right decision?
2. Can I only invest in one S&S ISA per tax year?
3. Should I consider increasing my mortgage contributions for myself and my wife?
4. Are there alternative investment options that I should explore?
In light of an impending arrival in May, my wife’s financial situation is uncertain, as it depends on whether she chooses to return to work full-time or part-time. Therefore, I have not included her financial details in this assessment.
I would greatly appreciate any suggestions and insights that can help me make informed financial decisions. Thank you in advance for your assistance.
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You haven’t said what your goals are. What do you need the money for and in what timescale?
Pension contributions looks good for your age, how much is in your pot at the moment?
ISA contributions also look fine. These will build up over time but if youve got spare cash and don’t need it for 5+ years, it’s probably better off in there. The autumn statement clarified that you can pay into multiple ISAs, but only to a single ISA in any given tax year. So pick one and contribute that (I would go all cap), in 2022 FY, you can contribute to a different one if you wish.
You’ve not mentioned cash reserves.. How much cash are you sitting on at the moment? I would recommend having at least ┬ú10k in the bank. Especially with little one on the way. If you find yourself out of work as the sole income, this money will buy your freedom.
You can get 4.1%+ interest rate in most regular savings at any UK bank which beats your mortgage rate, so makes no sense to pay off more of your mortgage… Unless it gives you a lot of comfort doing so. Youre also in the low LTV bracket which is the only other way it’ll make sense overpaying your mortgage. Currently your mortgage is cheap debt, I’d keep it.
Last but not least, any student debts?
Things get a lot more expensive when you have kids, and even though the focus will be to survive in the early years, there is no let up in expenses.
I’ve got about 70k to go on the mortgage on a similar rate, I have a gross salary of ┬ú70k, which I sacrifice a lot of to get under ┬ú50k. Wife also earns ┬ú35k. 2 kids, 7 & 11.
After everything is budgeted for, I have roughly £300 a month for actual discretionary spending.
Hi /u/-Tommo1992, based on your post the following pages from our wiki may be relevant:
– https://ukpersonal.finance/index-funds/
– https://ukpersonal.finance/pensions/
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^(These suggestions are based on keywords, if they missed the mark please report this comment.)
You can only contribute to 1 S&S ISA per tax year. What you invest in and which broker you use is up to you and what you value.
As your mortgage interest rate is lower than what you can get from a savings account, I’d stick the money you want to use for overpayments into a high paying savings account (check MSE to find the current highest) and then overpay when your fix comes to an end.
Otherise, you need to think about what your goals are for your money as this will then help influence where to store it.
I would invest or put the money into a bond that gives 1.49 at least for 2 years. Then renegotiate the mortgage in 2 years to keep your lifestyle or cancel the mortgage
I would consider what protection needs in the event either you or your wife were to be too ill to work or pass away now you have a child on the way.
Financially you look good.