Hi all,
We are a couple cased in our forties the UK. I posted a case study a few months ago and got some great help with setting up investments including a pension and VLS60:
http://forum.mrmoneymustache.com/ask-a-mustachian/reader-case-study-mortgage-free-uk-couple-now-need-investment-advice/msg1243336/#msg1243336We need some further advice about how to rearrange our savings, particularly as £14k + in our Santander 123 account is now earning 1.5% as of 1.11.16 rather than 3%. We want a safety net of around £20k as we are both self-employed/freelance.
To get started, I am trying to work out what to do till the end of the UK tax year (5 Apr 17).
Current savings/investments:
£4k in Kent Reliance (3.25%) – we can put £500 each per month
£1k in Rate setter (variable around 3-4% + £100 bonus) may remove this from Ratesetter in about 9 months when we have had it for a year.
£6k in TSB (currently 5% on 2k, this is an account each plus a joint account but as of Jan 2017, they will only pay 5% up to 1.5k in each account so we’ll have an extra £1.5k to move out of here too)
£14k+ in Santander 123
£700 in VLS60 with Charles Stanley Direct
Total: £25,700k+
The plan originally was to empty the Santander account to around 4k and move the bulk over to Kent Reliance at 1k a month but I can see that it’s going to take nearly a year to do that with the bulk of the Santander money earning a low rate in the meantime. We don’t really want to open up any more current / savings accounts ideally.
Earnings
We are never 100% sure how much we’ll earn but based on last year till the end of this tax year:
Nov: £2000
Dec: £1800
Jan: £2578
Feb: £1400
Mar: £2450
We live on approx. £1k a month so based on this will have a further £5228 by end of March 2017 to save / invest.
My initial thoughts are to invest £1k a month extra on top of the £200 direct debit into our VLS60, at least till the end of the tax year in Apr. We will probably still have more than we have now in easy access savings but with an extra £5k in S & S rather than in low interest savings accounts. We are quite risk adverse and new to the S & S scene so wanted to get some advice here about this and if folks think this is a good idea, the best way to funnel that £1 a month into the VLS60? i.e. is it better to do £500 twice a month?
I hope I have explained this clearly. Any clarification needed, let me know!
Thanks for your help in advance.