Quote Originally Posted by Optimistic Nick View Post
I really struggle to get much return on cash. If you have a kid it is a bit easier as there are some decent savings accounts out there paying 3%+. My basic rule is that I save whatever I can at rates that are higher than my mortgage interest rate; and use the surplus to overpay the mortgage.

My current plan for monthly savings is as follows:

My firstdirect reg saver (5%): £300
Wife firstdirect reg saver (5%): £300
My HSBC prem reg saver (5%): £250
Wife HSBC reg saver (5%): £250
Santander reg saver (3%, but now 2.5%): £200
Halifax junior saver (4.5%): £100
Barclays junior saver (3.5%): £100

The harder part is working out what to do with the money when the 12 months is up. Currently we stick the cash into nationwide accounts paying 5%; or the nationwide junior savings account paying 3%; or use the money to do stuff on the house. All of the above returns more than my mortgage interest rate, and is effectively a DIY offset giving me flexibility.
Higher rate tax payers get £500 savings allowance. Normal rate tax payers get £1k. Anything earned over and above needs to be declared via self assessment and taxed accordingly. Im fairly sure that the limit for earnings in a child’s name is just £100 - everything over an above being considered (for tax purposes) at the parents rate of tax. You also have £2k of dividend allowance (the return from any shares you may have), and approx £11k capital gains allowance.

It’s a really tough one. How best to invest?

Firstly- it’s never too late to start a pension (your only 36, so a good 24 years of working left). Most companies will offer an incentivised scheme... are you self employed? Have you looked at lisa’s?? You can max one of those out each year until you are 40.

If saving for the long term- a lot of savings/investment forums will suggest wrapping a tracker within a stocks and shares isa. You can get trackers which will follow every index, ftse100/250 domestically, as well as all of the exchanges globally. Vanguard do a highly recommended global tracking funds - plenty of threads recommending on the likes of mse.

Remember- opinions are like arseholes- everyone has one. Read as much as you can and make your own decisions.