Fisrst Post - UK Based - £200K Savings - advice needed...

[JoeBelfast]

Hi everyone; first post here. (And apologies the post has ended up longer than I'd imagined it would be!)

I'm 37 years old and live in the UK - single and live alone. I've always been natually quite frugal but I made a huge mistake over the last decade by not investing my money - a situation that I'm hoping to start rectifying now. My goals are not to retire young fully - I'm not wealthy enough for that and besides I enjoy my job even though it's not the highest paying - but rather I would like to sort my finances so that I can continue do the kind of work I enjoy rather than feeling pressured to always chase the highest salary.

My financial stats are:

- pre-tax income: £41K
- pension - defined benefit pension from employer
- help to buy ISA - £12K (will pay a £3K bonus when I buy my first home)
- Lifetime ISA's - £10K in index FTSE trackers (can't be withdrawn until I'm 60 IIRC)
- cash savings: £200K

My only major outgoing is rent - just over £500 a month. I don't own a car.

So where do I go from here? My thoughts are:

1. Housing - I love where I'm living but ownership prices continue to rise and I don't want to rent for life. So I'm probably best putting down a 40% deposit on a house and taking out the cheapest credit I can get locked in for as long as possible while rates are low?

2. S&S ISA vs Lifetime ISA - I can put £20K into a S&S ISA per year and access it any time, but I can also put £4K into a lifetime ISA every year and get a £1K bonus from the government however I can't touch that money until I'm 60 - what's the general concensus here is it worth that £1K boost to lock the money away - my fear is that the government might change the rules between now and me hitting 60 to raise the age at which I could lift that money again?

3. Fund allocation and 'timing' the market (dollar cost averaging) - what is the safest and simplest way to diversify? I currently only own some FTSE index trackers, but I'm assuming it's best practice to earn a more 'global' mix of stocks - what's the safest kind of fund to put money in for this purpose? And is it better to gradually top up my ISA allowance over the year (i.e. dollar cost averaging), or should I just max it out at the start of the financial year.

Is there anything else I haven't thought of here? Any other questions I should be asking myself that will help inform what I should be doing with my money?

Many thanks to anyone who has made it this far!

[cerat0n1a]

Welcome. You seem to be in a pretty good position.

You might be best off posting this on the UK taxes board on MMM - it's not much about tax, in spite of the name.

On question 3, I would recommend taking a look at a world index tracker, such as Vanguard's VWRL - much better diversified than the fairly random mix of banks, oil and mining shares that dominate the FTSE.

I tend to agree with your comments on buying a house too, I guess it probably also depends on whether you're ready to commit to living in the same place for some years to come - not likely to have to move for work or other reasons.

Thought you could use your lifetime ISA to buy your first home - or have you previously owned one, so that is no longer possible?

[JoeBelfast]

Hi,

Thanks for the reply - I will re-post on the appropriate forum.

Yes the LISA can be used to buy a first home but the Help to Buy ISA is exclusively for this purpose and I don't think I can use both at once.