Savings Accounts

[Relentless81]

Hello and lets get this this out of the way, I'm rubbish at this kind of thing, anything to do with numbers and I lose patience and interest (See what I did there) always have been this way and I want to fix it.

With that out of the way a bit of background, I have some savings which I've always just put a bit away every month and forget about it, its not a lot but I'm starting to wonder how I can put effort in and get more out of it. Its for later life, security if I lost my job, retirement, maybe even buy a property one day and do it up but that's possibly unlikely in this lifetime with house prices

With all this stuff going on around cost of living etc I thought to check how much interest I earn on my Savings account to see its 0.25% paid annually, I then started looking into seemingly a large can of worms relating to Savings Accounts, moving money around to get the best deals, drip feeding from Easy Access into Regular Payment accounts and all sorts (Yes I'm an overthinker)

I got a bit confused and need to read more into it but was also curious about what the people of OCUK do to get their money to work for them, please be gentle if you're going to reply, I am a noob at this and don't understanding investing etc and only keen to understand how to use the savings accounts available to my advantage with no risk. So if you're knowledgeable at this kind of thing I would appreciate any advice.

Otherwise, my local bank does have a letter box and I'm not interested in using it, I'm not saving for a Gucci belt or corner sofa and I own an "average" car which I would love to change but decided to keep for now.

Thanks

 

[Relentless81]

I've rushed my post and not provided enough info, sorry about that.

I need to be able to access the money without notice because I'm paranoid that if I lost my job I would need the money, maybe that's something I need to get over or only lock away some of it I don't know.

I have a pension, really don't understand it and need to invest some time to understand it better but I'm between jobs at the moment so that will also change and no idea how that works.

I'm 41 if age is a factor, I don't want to work until 65 and trying to imagine ways of retiring early so in terms of what it's for its not a retirement plan but could possibly help with paying off the mortgage when the time comes or buying a second property to rent out or just covering a few years until pensions can be claimed I'm not sure yet

Terms like LISA, ISA and SIPP only make me go cross eyed I don't know anything about them but if they are worth reading into I'll do that so thanks

I was in a lot of debt in my 20's and managed to turn that around which I'm pretty proud of that but the lasting effect is savings and understanding financial planning has never really been considered previously so I'm trying to figure it all out now

I was initially just thinking of getting a better easy access savings account seeing as though my current one pays so little at .25 and there are others paying 1.5

 

[Relentless81]

Thanks for the info, I think I need to do a lot more reading into ISAs to make sure I make the right decisions

I was reading about the drip method where you open an easy access account like the 1.5% Chase account and siphon it off into a Regular Savings account which will have around 3% but not sure if that's worth the effort now compared to ISAs

 

[Relentless81]

I'm rather lazy when it comes to savings.
I have all of mine stashed into a Chase 1.5% account, currently I get around £100 every month just by having it in there (I do have £80k just sitting there....although most of it is all going to spent in a few months time so not point doing anything with it) once its been diminished I'm probably just going to leave it there (around £10-15k)

I don't have anywhere near that but it is mounting up, I'm managing to put away £675 a month currently, £500 in savings and £175 for next car but I'm thinking of running my current car into the ground and combining the accounts because as the cost of living increases I'm having less and less disposable income every month

I definitely need to do something, I'm missing out on free money and my current savings accounts are pitiful in terms of interest

 

[Relentless81]

Yes I have a mortgage, I won't be able to keep up with the £675 for much longer with the cost of living increases it will probably drop to around £500

Pension I do need to understand better but like I say I'm changing jobs soon so my pension will change with it

I think I'm going to combine my car and general savings and open a Chase account and put everything in there to start, close my current saving accounts, read a bit more into locking half of it away into a better account. The way I see it then that's 50% of my savings in a regular savings account earning around 3% and move it when better offers come up and pay into that account monthly and then the other 50% sits in the chase account and I can access it if I need to, does that sound sensible?

I had a look at Vanguard and my head fell off, ISAs I'm not sure on just yet need to read more bu don't think it's any better than a savings account from what I've read so far

 

[Relentless81]

Once you get over the £1000 tax limit you start to get taxed on everything after that point. I haven't hit that threshold yet and probably wont due to spending most of it in a little while and only being with the bank for a few months now.
The chase app is fine, easy to transfer money. It does have outages but I've only seen 1 since joining and it only lasted about an hour.

The Chase account is just a current account rather than an actual savings account isn't it, so I just need to open a current account and dump my money in there and don't have to do anything special to get the 1.5% ?

 

[Relentless81]

Thanks all, looks simple enough

Obviously they are safe to stash your cash in there, clearly @MatsyLR thinks so, just wondering how many more of you have used it for the same reasons?

 

[Relentless81]

Thanks again, I'll get one opened and move 50% in and look to put the other 50% into something like a regular saver

Just one more question please, do you get penalised in any way for taking money out and is the interest paid annually? If it's annually how do they work it out if people are taking money in and out all the time?

I ask because I noticed I got paid more interest one year on my current savings account than I did this year when there was more money in it, what's that all about!?

 

[Relentless81]

Ok I've created an account and a savings account, all looks good and it's open and ready to send many monies over to it but erm, yeah. Not sure how ha

 

[Relentless81]

Get the details of your account sort code/number via the chase app and then do a bank transfer from your existing account. You'll get a crapload of warnings about fraud etc probably just do a small token amount first to ensure you have the details right.

That's the thing, I think I'm being really thick and a bit nervous about transferring a fair amount of money but I'm on my phone so kind of difficult to get the details of one account from one app and add it to another because the apps auto sign out

I could just write them down but yeah, I'm paranoid

 

[Relentless81]

I know sorry I'm being daft, I just transferred £1 all good

Just need to decide how much to put into this account for my easy access savings and what to do with the rest, I need to find another account now with a better rate that I can lock some money into so I'm off to read up on money saving expert again. Thanks for the help all it's been emotional, any tips on Regular Savings accounts also appreciated!

Edit - just transferred all of it, absolutely bricked myself seems odd sending my life savings to a bank account I never heard of based on the advice of people on the internet but I trust my fellow OCUKers, to an extent

No point keeping it in a lower interest account so it's all in the Chase savings account now

 

[Relentless81]

Bank rates are rising all the time and with a potential bigger hike to the base rate coming in August it may pay to just wait for a month and see how high things go.

Ah ok I didn't know that, where do you get updates on this kind of thing, I don't really watch the news or anything so will probably just keep visiting money saving expert for general info and other things I'm missing out on

 

[Relentless81]

Yeah I couldn't sleep last night for thinking about it all.

My plan is a 6 month wage buffer in easy access savings which is the Chase 1.5%

Another chunk which I'll move around fixed rate savings accounts but I need to save a bit more to get the minimum most of them demand and keep an eye on it moving to the best deal every time one expires

The other part of the plan is to understand and contribute more to my pension, I started reading about that this morning but it's so complicated it's going to take me a while to get my head around it especially with changing jobs soon and then overpaying the mortgage and which comes first Pension or Mortgage!?

On top of all that I've kind of lost my car savings fund as it's been absorbed into the above two savings pots so not really sure what I'll do next time I need to buy a car, I wanted to avoid loans so something else to think about there

On top of all that the amount I can save per month will inevitably be going down, cost of living increases has seen my disposal income drop significantly this year so there is that to keep in mind too, the worst is yet to come for cost of living increases

 

[Relentless81]

All of our ability to save is decreasing because of increasing costs. Which is why doing it at source (i.e. pension contributions) makes the most amount of sense (usually) - however I really urge you (despite some good advice in this thread) to go and speak to an independent expert who can help with your financial planning based on your goals, current status etc.... Most of us that work full time even without a family don't have the ability to track markets/shares/indexes etc... to maximise their effectiveness, long term strategies are far more effective for the average joe like us in my opinion.

Yup, full time employment and a young family means no time, that's why I was reading it all last night and couldn't sleep because my brain was on fire and now today I'm tired

Who are these advisors, are they free or do you have to pay and how do you know of a good one? Always assumed you would just do stuff like that through your bank and they would just sell you their products

 

[Relentless81]

Personally don't see the need to speak to an IFA, they charge a fortune and will tell you nothing you cant research yourself in an afternoon. If you really have no idea, pick a vanguard retirement fund and just pay in monthly either through a SIPP or ISA.

Vanguard Asset Management | Personal Investing in the UK

www.vanguardinvestor.co.uk

Do you have one, so its like an additional private pension on top of your work and state pensions so you have 3 pensions to keep track of, why not just pay more into work pension?

Also why wouldn't you prioritise mortgage overpayments?

 

[Relentless81]

I believe it's a good one, it's a defined benefit scheme and only two people Inc me in the entire organisation have it because they don't offer it anymore and I only have it because I've been there 11 years

That's all I know other than it's called SHPS.

Making me wonder if I should change jobs if my current pension is a good one, need to understand what defines a good pension and compare it to potential new employer offering

 

[Relentless81]

Some sound advice again thanks all.

I won't have enough to plonk into a fixed saver until end of September so going off what was said earlier in the thread rates might be 3% plus by then for a 12 month fix

My 5 year fix mortgage is up next year, dreading that and have to be conscious of any credit checks between now and then Inc savings accounts, Chase don't run a credit check so that was fine opening that account. I'm dreading it and it's one of the reasons I'm doing all of this to offset the increase as much as possible.

The points on saving rather than overpayment are very interesting, am I right in saying if my mortgage rate goes above the Savings rate it's better to overpay the mortgage then?

 

[Relentless81]

Credit checks alone are nothing to worry about, unless you are doing many multiples of them.

In terms of saving vs overpaying, in basic terms yes it is better to overpay if the mortgage interest rate is higher then the savings rate, but it comes with the decision you make that you wont have access to those funds if you so need them like in a savings account. So its a hard call to make.

Makes sense, I'm splitting my savings in two, half in easy access with monthly payments in, half in fixed to move around to the best deals

I'll then have a bit left to invest in overpayment either pension or mortgage, problem with mortgage is I would have to get my wife involved and she likely won't be up for it and will probably be more up for investing in home improvements

 

[Relentless81]

Why do you have to get your wife involved? It should be as simple as calling the bank and increasing the payment, setting up a standing order etc. Its savings just in a different context.

The wife and I aren't traditional, without going into too much detail her money is her money and my money is my money. We pay into a joint account every month that covers mortgage bills etc so I cant just go and increase the mortgage payment she needs to agree to it and add the extra money to her monthly joint account contribution

 

[Relentless81]

How do I keep track of fixed rate savers chaps? Any apps or anything useful like that, email subscription or just keep an eye on money saving expert. How do you all keep track of these things you're all too savvy you're getting your info somewhere!