Advice required

A question about : Advice required

Morning All

Just some friendly advice required.
OH and I and Baby FLC are in this current situation:

Mortgage: Ј101,000 - 2.59% interest fixed for two more years
ISA: Ј7,000 1.49% tax free
TSB 5% interest account: Ј1,000

We are currently planning to add a brother or a sister for baby FLC.

My job is uncertain though - likelihood is a choice to take Ј180 per month pay cut - with a lump some of around Ј5500 (two years of pay difference)
Or redundancy.

What do you think I should be doing with the money saved? OP? Likelihood is I will need a new car in the next 12 months.

Any advice is gratefully received!

Best answers:

• Sounds like your outgoings are likely to be increasing while your income may be decreasing so best bet is to get your money into places where it'll give the best return without being tied up long term.
  You can do far better than 1.49% on the Ј7K by using interest-paying current accounts (even allowing for taxable status), especially if both you and OH open sole and joint ones to go with the single TSB you have so far, https://www.moneysavingexpert.com/sav...saving-account is a good summary of prioritised options....
• The advice above is sound. Stick it in the highest interest-paying account you can.
  You'll see from articles in this site that there are accounts like TSB that pay 5% on amounts up to a certain level, others paying 4% and 3% gross. You can have multiple accounts between you (for example you and OH could both have a personal account and a joint account at TSB so be putting Ј6000 away at 5% instead of Ј1000 at that rate and everything else in a lower rate ISA.
  If the mortgage is only at 2.59% then there is no big advantage in paying it off at the moment as you can achieve that or thereabouts net on the high paying current accounts. When your fix runs out if the rate is going to be higher then perhaps worth paying some of it off to get a better loan-to-value rate.
  But no point paying away money now that you need to remortgage to get back, when you're facing job uncertainty and may need it for car or baby.
  As you mention having a baby and maybe another one while you carry on with your job, perhaps your OH will not be working or be on a lower salary and lower tax rate than you? So, worth considering having most of the family savings in your OH's sole accounts rather than your accounts or joint accounts, to minimise tax.
• Many thanks for your advice people.
  Basically the car is a diesel with Ј92k on the clock. I travel 20 miles each way to work, and know NOTHING about cars - we tend to get a car, run it till it starts to cost money (expensive issues with previous peugeots!) and then trade it in, get a car loan and start the process again.
  We have found Ј100 per month that we can claw back from different methods and OH goes back to work next month - so goodbye SMP and hello full time money!!
  I will look at better ISA's - should I leave till after April now?
  We get told about our jobs on Monday, I think the choices will be voluntary redundancy - only been there 7 yrs, so the package would not be that great, or two years salary as a lump sum and a salary drop. Rough maths I think the lump sum will be Ј5000-5500 - where should I place that?
  Mortgage is Ј600 per month, and with 14yrs left to run, I would like shot of it asap!
• I would not tie the money up but do as others have suggested and put the ISA into a high interest current account. You may need it if your job is uncertain as you will not get help with your mortgage payments . 1.49% is a rubbish rate so not really worth bothering with it.
• Do you have a Santander 123 account? A joint account could hold all your household DDs, pay you cash back and earn you interest on balances up to Ј20000. A monthly credit is required but can be easily managed, if only on an in and out basis
  How about opening a Nationwide Flexdirect account and depositing Ј2500 of the ISA in that.
  Open a joint Nationwide Flexdirect account and deposit another Ј2500 in that.
  Top up the TSB to Ј2000 and open a joint TSB with the remaining Ј1000. Set both to paperless statements and correspondence.
  You will need to cycle money round the accounts to meet the conditions for interest but with faster payments this is no problem.
  You can move monthly interest earned to the unfilled TSB.
  You might want to open a Lloyds Club account once you get the redundancy money - up to 4% on up to Ј5000 provided that you have two DDs and pay in Ј1500 a month- once agin you "cycle round".
  When the two NW accounts have been open for a year, you could switch for any switching bonus but shift the bulk of the money to Santander and so on......
  Always check T&Cs very carefully.
• Many thanks for all your knowledge and advice.
  Just because in my hurry, I don't think I explained everything so well.
  I will not be taking the redundancy, only 40 (ONLY! ha!), so the alternative is earning less per month but being paid two years difference as a lump sum.
  e.g was on Ј20k, now on Ј15k, with a lump sum of the difference (two years worth)
  What I need to do is find the best place for that and the Ј7k ISA to help us out.
  I am agreeing, new car seems daft, from what I have read the car has depreciated so much just by driving it off the fore-court - so I will work on keeping it road-worthy for as long as possible
• So the meeting was today.
  The only option for me, and my family, is to take the lower wage and a lump sum pf Ј6419 minus tax and NI.
  Now I need to find a home for it.
  I have moved Ј1000 into my TSB account, I can't see my OH opening up an account, she cannot be bothered with these things.
  The Nationwide Flexaccount looks attractive - but if I read it right do I need to pay Ј10 per month to have this account?
  Anywhere else I should consider?
  FLC
• The Nationwide account paying 5% doesn't charge any fees.
  You can also open a joint TSB account. Between those 3 accounts you'll have a home for Ј6500 at 5%.
• Nationwide Flexdirect Account (for one year), TSB Classic Plus, BOS Vantage.
  Cycle the necessary money round once a month by faster payment-move the interest to BOS. Vantage.
  At the end of the year, switch NW to an account with a switching bonus and carry on....
• Thanks for everyone's help. Very new to this.
  Would the Ј6419 be subject to 40% tax, as I'm getting such a large amount in a new tax year?
• that would depend on your current salary? But if only 20K, that would only bring you to to 26K so no HRT?
  Do you have a pension with this company? The OH?
  How easy will it be for you to get another job? I'd be looking ASAP.
  And as the OH goes back to work, have her save every penny she earns over SMP. Open an acct for her, just get her to sign it.
  And delay baby 2 until you start- and are happy with- your new job. Not a good time to procreate if income is uncertain?