Significant Increase in Salary – What to do?

Of the difference/uplift 25% pocket, 50% pension, 25% overpayment. Mortgage rates are low and pension relief is I assume 40% for you.
 
Don’t fall into the trap of immediately saving all the extra you get; or over paying all the extra you get against your loans or mortgage.

You’ve aren’t this money, enjoy it a little firstly. Take a month or two where you can enjoy the feeling of not worrying about bills, or mortgages or disposable income. Go to that restaurant you want, book that holiday you wanted.

But equally when you’ve had a month or two off, over pay your mortgage. Save some sums of money to put away for later in life. But don’t ever leave yourself short ever again - if you’ve doubled your money you shouldn’t. There’s no reason to over extend.

Enjoy it, and congratulations.
 
First things first I think we all need a drink to celebrate. Only 138,587 of us so that will solve your dilemma of what to spend your money on for a while ;)
 
I was in the same boat a while back. Make massive in roads into your debts. See if you are allowed to overpay on your mortgage. Most have limits. Ours is 11% a year with Santander. Save the rest. I like premium bonds but not for everyone.

Cutting down on the interest ends up saving you thousands, making your payrise all the sweeter.
 
Spread the surplus around a little and just add some balance.

- Enjoy some of it - you've worked for it.
- Select an amount to overpay your mortgage by a bit - this is moderately sensible to do and good for your emotional financial wellbeing to see the debt reduce at an increased rate.
- Increase your pension contribution by a few percent - especially if your employer's contribution continues to rise in proportion.
- Save some cash - build up your emergency fund and prepare for the capital expenditure you'll need for children, such as a different car for example.
- If you're not insured yet, consider getting life insurance now while it is a bit cheaper when you're younger. You're going to need to consider it when you have children in a few years anyway.
 
Actually, having re-read the OP, it seems like you have a ongoing mortgage on a house and are planning for kids at some point. You're also considering buying a new car.

Have you considered a Bugatti Veyron, my dude?
 
Some mortgages penalise you for paying early so it isn't always a great idea, as previously said it may be worth investing it in a higher rate savings. I'd opt for more pensions contributions though, the sooner you start paying and the more you pay (in most cases I've had) the earlier you can jack it all in when you're still young enough to enjoy your retirement.
Don't be like me and having to work until you're decrepit.
 
What is the best opportunity you could give your kids?

Private schooling.

It's not cheap.

So I would invest it into something safe like ISA's, overpaying mortgage, etc.

Or a flat and rent it out. The rent from the flat in 10 years time would likely cover the cost of private schooling for 1 kid.

Also if you have managed to double your salary your net take home will nowhere near be double.

The last thing I would be doing is blowing it on a car. A depreciating asset. Plus more expensive cars cost more in everything usually, insurance, road tax, tyres, servicing. You could see a lot of that new disposable vanish with hidden costs.

Use the money to make more money then buy a car using passive income streams. That way the car costs you nothing.
 
Surely thinking about a second property would be the way to go? Borrowing is so cheap atm. When mortgage rates are only around 2-3% you are never going to match the money that can be made in property. Obviously pay off any debts you have first. You can’t go wrong with bricks and mortar.
 
Colonel_Klinck said:
Surely thinking about a second property would be the way to go? Borrowing is so cheap atm. When mortgage rates are only around 2-3% you are never going to match the money that can be made in property. Obviously pay off any debts you have first. You can’t go wrong with bricks and mortar.
Click to expand...
This is what's wrong with this country.

The fact that property (aka a place to live and a roof over your head) is an investment vehicle not an essential human right.
 
FoxEye said:
This is what's wrong with this country.

The fact that property (aka a place to live and a roof over your head) is an investment vehicle not an essential human right.
Click to expand...

I agree and if he has a moral problem with that then he shouldnt do it. Until the Gov legislates to stop it happening it is still the best investment. I wish they would as properly prices in this country are a joke.
 
Overpay the mortgage, and perhaps your doubling of salary could let you now be able to afford a high end Nvidia Graphics card, doubtful tbh. :p
 
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