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Real Important Preamble - I am not an FCA regulated financial anything and none of this thread is to be taken as Financial Advice. Most of this information is intended for UK citizens with a single primary source of income. No recommendations for products or services are intended as brokering and I assume no liability for wrong or misleading information. Always do your own research and seek independent financial advice from a qualified professional if necessary! As most of the Newbie/Long Term Investment threads are very US-centric (though very useful) I thought this thread could serve more of a UK oriented blueprint into getting finances sorted and looking ahead to investing and retirement. Read Me First! I've found the best tool to getting my finances sorted is the Reddit UK Personal Finance Flowchart - Start at the top and answer through the gates until you're rich. Simple, eh? I'll be using this to fill out a skeleton for the OP of this thread and (eventually) flesh out a bit more detail on each step. If there are conversations downthread that have useful posts relating to a certain step I'll quote them in the OP.  Welcome to Warp Zone! [Investing 101] If You Can is a free e-book written by William Bernstein that anyone even completely and utterly clueless about the world of investment and retirement can pick up, read and suddenly be well ahead of the majority of their peers. I go back through it every 6 months or so and even though I've personally not done the reading assignments (but am planning to) it's put me in great stead for retiring comfortably. Like most reading material, it is very US based but the underlying ideas are solid and can be adapted to a UK market. I need to invest in $TSLA RIGHT NOW!!! Doccykins posted:Every time I think I'm hot poo poo and can beat the market I go back to the brokerage account I set up in my early twenties to do single stock picking Jack Bogle, creator of the index fund and founder of the Vanguard Group which holds ~$5,100,000,000,000 of Assets Under Management posted:Don't look for the needle in the haystack. Just buy the haystack! Investing?? I live hand to mouth and can barely afford to eat! Step One before embarking on the world of investment and all the jargon that comes with it is getting to a point where your monthly income outweighs your monthly expenditure. The only mathematically true way of doing this is to either increase the amount of money you bring in (for the vast majority of people this will mean getting a higher paying job) or reducing what you spend every month. How to do this? You Need A Budget! Also check out the OP of the BFC Newbies Thread as until your budget is sorted and you know where money is going the methods and information to getting your finances healthy is the same as in the US.  Universal Credit Universal credit is the single payment benefit system the government is attempting to replace the following benefits with: Child Tax Credit Housing Benefit Income Support Income-based Jobseeker’s Allowance (JSA) Income-related Employment and Support Allowance (ESA) Working Tax Credit Depending on where you live you may be claiming one or many of the above welfare payments or be in the process of moving to the Universal Credit system. If you do not currently claim any of the above benefits but may start to in the future, you will be enrolled into Universal Credit rather than the previous benefit scheme. The gov.uk website covers most of the eligibility requirements but has a reputation of being a Kafkaesque bureaucracy so if anyone has first hand experience with navigating the system successfully please post away! Buy Food This does not mean fancy pants pop up restaurants, it means having enough in groceries for the month to not starve. Pay Rent/Mortgage Renters Until the day the guillotines come out or you have enough money saved to buy you will have to deal with paying rent. If you are really struggling and are under a signed contract, talk to your landlord/letting agent and see if you can work out any kind of clemency before missed rent becomes an eviction problem. House hunting is an awful soul destroying business with heaps of bullshit fees but from 1st June 2019 the tenant fees ban kicks in which should stop letting agents throw on random £60-£250 charges for reading their emails. https://www.reallymoving.com/news/january-2019/ban-on-tenant-fees posted:As well as credit, immigration and reference checks, some of the other fees that will be banned from June 1 include: charges for guarantor forms, inventory checks, domestic cleaning, professional cleaning and administration costs. Homeowners/Homeowners to be From the old French 'Dead Pledge'; paying off your mortgage and owning a home outright is one of the biggest stepping stones to financial security, but that won't stop the banks from skimming every penny they possibly can on the way. Luckily interest rates are incredibly low at the moment so if you are coming up to the end of a fixed term mortgage period it is currently prudent to lock in either a 5 or 10 year fixed rate. If you're currently on a Standard Variable Rate (SVR) mortgage Pay essential bills (Gas/Electric/Water/Council Tax)  everything is hosed, Martin Lewis has been flying red flags at the government about this for the last 6 months and there may or may not be help with energy bills coming down the linePay income earning expenses (Car/Fuel/Tax/Insurance/Railcard) A lot of workplaces offer season ticket loans which are usually interest free and sometimes salary sacrificed (meaning your employer pays for the ticket and withholds the monthly cost from your paycheque - This works out beneficial to both parties as you will be buying the season ticket from your gross pre-tax pay rather than after being taxed. More on this later!) I have no idea what car insurance rates should be seeing as I don't have a car, sorry! Any help greatly appreciated! Make minimum payments on all debts This should be a given, if you know you have cash in the bank on payday and are still struggling with this step I recommend setting an auto direct debit or standing order with each creditor on Payday+1 to pay your obligations before you can spend it on other things. If you are truly struggling to make minimum payments it may be worth considering bankruptcy but before you go all out check with the Citizen's Advice Bureau if doing so will be worth it in the long run or if repackaging your debt into a more manageable repayment would be better. DO NOT try to rob Peter to pay Paul and start hitting up Payday Lenders - there is always a better option than taking on extremely high risk loans with unscrupulous companies. The Money Advice Service is a good place to start. Keep an Emergency Fund of 1 month's expenses Your next step should be to ensure that you have one month's worth of the above expenses available in case the worst happens and you suddenly don't have the expected means to pay them. This money should be in an instantly accessible cash account with no penalties for withdrawals (later on I'll detail a couple of loopholes to this rule but in terms of this step in the flowchart you need this cash on hand with no strings attached) - Overdrafts do not count! Pay non-essential bills in full (TV/Internet/Phone) I'd also look to see how much money you're spending on each of these products - a Three SIM Only plan with unlimited minutes and data can be as low as £20 a month. You do not need Sky+HD+Movies+Sports+Sky Q+Boxsets+WWE+Fight Night, however if you are a heavy TV package consumer you can 9 times out of 10 phone and threaten to cancel your subscription / move to Virgin to get a reduction on your monthly rates. Be prepared for the first operator to call your bluff, the deals sometimes come into your email a couple of days after you say you're cancelling. Anecdotal I know but I have a friend who has never payed more than £25 a month for Sky and has only been without the service for one hit of 6 months before they came back to him with a 'New Customer' offer that looked very much like his old deal. High Interest Debt Repayment (10% or higher) The BFC Newbies Thread OP covers how to reduce your credit card debt in some detail - this also applies to any high interest consumer product loans you may have. I'll also mention Payment Protection Insurance (PPI) Refunds here in case anyone is still eligible for that - You don't need to pay anyone else a penny to reclaim any PPI - Just use the form on Moneysavingexpert and send it off to the provider you had a credit line with. The deadline for opening a PPI refund application is 29th August 2019 Company Pension Scheme and Auto-Enrollment There are several types of pensions available in the UK and how they operate is dependent on your employer. Final Salary Pension Scheme / Defined Benefit If you are enrolled on a Final Salary scheme then lucky you, these are rapidly disappearing! In exchange for a percentage of your salary each month your employer is pledging to pay you a percentage of the salary you retire on, based on the number of years you have been working for that employer. For example - if you start a career at 25 on £25,000 and pay 6% into a 1/60 accrual final salary scheme, each month you'd pay £125 (6% of 25k divided by 12 months) and when you retire at 65 (and hopefully at a higher salary, say £50,000) the employer will pay you 40 (years service) x 1/60 (accrual rate) x £50,000 (final salary) = £33,333 a year gross as a pension. This is how company pension schemes get in trouble (see: British Airways when veteran pilots flying for 30 years started retiring at £140k+ in bulk and their replacements were only contributing 6% of £54k) Group Pension Plan (GPP) / Defined Contribution This is the current preferred pension scheme of the majority of large employers. An employee sacrifices a percentage of their salary, the employer matches it and both contributions go into a retirement account in the employee's name at a Pension Fund company. Some employers are generous (putting in up to 13% as long as the employee contributes at least 6%), others are more American (matching half of the employee's contributions up to 6%) The important thing is if your scheme does have any employer contribution, you should always put in the minimum required to get that free money. (I'll talk more about where to invest this money when we get to Saving for Retirement.) National Employment Savings Trust (NEST) NEST is a type of Defined Contribution scheme the Government launched in 2008 that has started to force employers with no other formal pension scheme to enroll their employees in (unless the employee chooses to opt out.) From the start of this tax year (2019/20) any employees enrolled in the scheme pay 5% of their gross salary into NEST and their employer pays 3% - The catch is that whilst the Annual Management Charge is 0.3% (relatively good), any contributions are given a one time 1.8% haircut before they are invested. The Government says they will reduce or remove this contribution fee as the set up costs of the fund are met, but on the other hand Self Invested Pension Plan (SIPP) SIPPs are mainly used by people who are self employed but are open to anyone earning an income. Their chief advantage is the automatic income tax relief on any money contributed to them at the basic rate (20% on income earned between £12,500 and £50,000 in 2019/20) and users of the scheme who earn more than £50,000 gross can request Higher or Additional Rate Tax Relief via a Self Assessment Tax Return at the end of the tax year. Build a 3-6 month Emergency Fund Same concept as before, at this stage your next task should be to save enough cash on hand to keep your head above water for 3-6 months depending on your employment and family circumstances (single 20 something with a full time job and no mortgage or kids closer to 3 months, mid 40s contractor with a house and family to provide for should be 6) Pay off any modest interest debt (4-10%) Same concept as the credit cards, if you have any car/bike loans over 4% the guaranteed returns (not paying 4+% interest) of paying them off will outweigh potential returns from the stock market  Student Loans in the UK - Putting this here as Plan 2 loans are potentially this level of interestDepending on when and where you went to university and how much you earn it may or may not be worth looking into paying off your student loans. Find out what type of loan you have from the Student Loan Repayment Site Plan 1 - Started your course before 1st September 2012 or studied in Scotland or Northern Ireland From the April after you graduated or left your course you will pay back 9% of any pre-tax income over £19,884 (for FY 21/22) These loans are the good old days and only charge interest at 1.1% (at April 2021) - Don't bother overpaying on these type of loans unless you psychologically want to zero out all of your debt. Plan 2 - Started your course after 1st September 2012 and studied in England or Wales From the April after you graduated or left your course you will pay back 9% of any pre-tax income over £27,288 (for FY 21/22) These loans are historically the more usurious ones that currently charge interest at 3% PLUS RPI inflation (currently 2.6%) for a total of 5.6%. This year (2021/22) if you earn less than £49,130 the interest rate is somewhat relaxed depending on your actual income, down to an inflation only rate if you earn less than the £27,288 repayment trigger. So
Note that for all student loans the amount you pay is calculated from your gross reported income (after any Salary Sacrificed Pension Contributions) and removed from your net income (after Income Tax and National Insurance are deducted) Saving to buy a first home [ISA chat] Individual Savings Accounts are accounts that are tax free of any interest or capital growth. The best way to save for a first home is through one of the two government schemes - the Help to Buy ISA and the Lifetime ISA. Depending on your circumstances one may be suited more to your goals than the other: Lifetime ISA Blurb: The Lifetime Individual Savings Account (LISA) is the current government push to get people saving for either a first property or retirement. Savers can pay in up to £4,000 a year and the government will boost the amount in the ISA by 25%. Investments can be kept in cash and grow at a bank prescribed interest rate or used to purchase Stock Market investments (see Stocks and Shares ISAs below) Catches:
Blurb: Savers open an account with a lump sum of anything from £1 to £1,200 and then pay in up to £200 a month via direct debit. When the saver comes to purchase a first home the government will add on 25% of the value of the ISA. The benefit over the LISA is a H2B ISA functions as an instant-access savings account with no withdrawal penalty if you use the funds for anything other than a house deposit, and tends to have some of the most lucrative interest rates available for instantly accessible cash savings. Catches:
For both Help to Buy and Lifetime ISAs if you are buying a house with a partner, both of you can contribute your ISA savings towards the property and get government bonuses on both accounts, but the property price can still not exceed £250,000 in the case of a Help to Buy ISA or £450,000 for a Lifetime ISA or London purchase. Note if you do utilise both the H2B and Lifetime ISAs you can only use one of the bonuses when buying your first home In addition to the government schemes, financial institutions also offer their own Cash ISAs and Stocks and Shares ISAs. Cash ISAs Cash ISAs are basic savings accounts with a prescribed interest rate from the institution holding your cash - they are pretty useless as most Cash ISA interest rates are at or worse than the Bank of England base interest rate right now, and many banks or building societies have better interest rates or cashback opportunities with their current accounts. You can only pay into one Cash ISA (including the Help to Buy ISA), one Stocks and Shares ISA and one Lifetime ISA in a tax year. The overall ISA contribution limit is £20,000 per year across all your ISA savings vehicles. So for example, if you max out a Help to Buy ISA (£2,400 a year) and a Lifetime ISA (£4,000 a year), you have £13,600 available to contribute towards a Stocks and Shares ISA for the year (see below.) The UK Tax Year runs from 6th April to 5th April the following calendar year and is usually described in the yy/yy format - i.e. 19/20 for the tax year running from 6th April 2019 to 5th April 2020. Short Term Goals Holidays/Redecorating/New Car saving etc. These are usually in set aside savings accounts or a Cash ISA if you don't already contribute towards or qualify for a H2B separately. "Savings Builder" accounts where the interest rate is attractive as long as the balance keeps going up by a certain amount each month are usually the best kind of account for short term projects or savings goals. DO NOT invest in stocks if your horizon for using that money is less than 5 years. Long Term Goals / Saving for Retirement You can invest up to £40,000 a year into your pension(s) and any money paid in does not count towards your annual gross salary for income tax purposes - In the case of a SIPP this taxed money is returned to you on contribution for a basic rate tax payer or at the end of the tax year for higher or additional rate taxpayers. The lifetime allowance on your pension savings is £1,073,100 - though this figure creeps up at about the rate of inflation each year - after which contributions are taxed at 25% plus the normally relieved income tax if made as income contributions or at 55% flat as a lump sum from elsewhere. Stocks and Shares ISAs - OP note: I am here Once your pension is set up and on target for £1m the next tax efficient way of saving is into a Stocks and Shares ISA. BFC Favourite Vanguard offer a Stocks and Shares ISA with an Annual Management Charge of 0.15% of Assets Under Management up to £250,000 (for a maximum AMC of £375pa) and Fund Management Charges (also known as Expense Ratios) of anything between 0.08% and 0.4% per year. Why is everyone here so horny for Vanguard? Historically their Annual Management and Fund charges have been much lower than regular Actively or Passively Managed Funds in other brokers or pension providers - it's not uncommon for pensions to be skimmed for anything from 0.5% to 2% a year so before Vanguard came along it was open season on small investors. The reason why they were the first to the table in this is because literally EVERY other pension provider answers not to their clients but to their own shareholders, so making the most profit for the shareholders of that company is priority #1. The Vanguard Group however is owned by the people holding its assets, so if you invest in a Vanguard fund, you invest in the company, and everyone from the first time investor to the CEO holds shares in Vanguard in exactly the same way, so scraping 2% off any annual gains doesn't help anyone. They only need to charge enough to keep the group's service costs funded, and those who own more of Vanguard's funds pay for more of those ongoing costs. Taxable Brokerage Accounts Seek financial advice ye who enter!  and  Congratulations! If you have made it this far you will likely retire comfortably  (don't actually buy coke or a horse)Tax thresholds for 2021/22 The Personal Allowance (PA) for 2021/22 is £12,570 which means in the vast majority of cases you don't pay income tax on any earnings up to £12,570 The Basic Rate of 20% Income Tax is paid on any income between your Personal Allowance and £37,700 above your PA limit - again for most people this means between £12,570 and £50,270 The Higher Rate of 40% Income Tax is paid on any income between £37,700 above your PA limit (usually £50,270) and £150,000. Your PA starts to decrease by £1 for every £2 you earn above £100,000 The Additional Rate of 45% Income Tax is paid on any income over £150,000 National Insurance is paid at a rate of 12% on income between £9,568 and £50,270 and 2% on income over £50,270 This is really complicated! Can't you just provide examples?? Okay code:tldr: high earning employees get out like bandits on N.I contributions after £50k, though overall effective tax rate does keep slowly ticking up Useful Links and Resources Our very own Business, Finance and Careers Forum in case you came here from another forum/part of the internet and within that our Newbies Thread and a more Long Term Investing Thread UK Personal Finance Subreddit - I swiped the Flowchart from here MoneySavingExpert, which has loads of tips and recommendations for any point in your financial state, and a cleaner/more in depth layout of a lot of the concepts detailed above in my braindump The UK Government Money site - Use their search for government guidelines on whatever you're looking for The Salary Calculator - Showing you where your money goes from gross pay packet to net money in your pocket I have more questions! / You hosed up [section]!  - I have almost certainly made mistakes and am happy to clean up the OP as this thread gets moving!
Doccykins fucked around with this message at 10:54 on Jul 7, 2023 |
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Apr 14, 2019 17:40
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Limey bastards 
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Apr 15, 2019 00:55
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Any thoughts as to current account offerings? Santander's 1-2-3 account ain't what it used to be, but for £5/mth you still get 1.5% interest, paid monthly, up to £20,000. Then there's automatic 1%-3% cashback for council tax and utility direct debits; so, if you're lucky enough to have the standard 3-6mths expenses saved, and disciplined enough to keep it separate from daily spending, it's not a bad idea to keep everything in the same pot. The only real downside is that their online banking is ... functional, but I guess that's standard anyway. [edit] oh and if you haven't already, the PPI claims' deadline is the end of August, so get cracking. Don't bother with those TEXT 8008135 TO CLAIM PPI businesses, they'll do the exact same thing and charge you a third of the outcome. I've done it myself through MSE's 'Resolver' service, so I can vouch for them. spincube fucked around with this message at 19:32 on Apr 15, 2019 |
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Apr 15, 2019 19:26
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so I could say that I finally figured out what this god damned cube is doing. Get well Lowtax.
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Simpsons Reference posted:Limey bastards  spincube posted:Santander's 1-2-3 account ain't what it used to be ... Oh hey account buddy, I was going to make almost this exact post. After utility bill cashback it's working out at closer to £2/month, which I figure isn't too bad. Hell, I'd probably clear it all if I paid all my utility bills direct rather than reimbursing housemates for some of them. I thought above moving my emergency fund into Marcus but I'd have to keep less than I'm comfortable with in my current account for it to stop being worth it. Focusing more on my budget than what's in each account has definitely helped with the discipline of having it all in one pot. The online banking is definitely ... functional. I'd still recommend it if people were on the fence. I also wanted to say thanks to BFC in general - I stumbled in at the tail end of the 17/18 tax year and finally set up an ISA (Vanguard Stocks & Shares). I can't stress enough how much having an actual long-term savings plan has helped my peace of mind since then, even if I've got a long way to go in actually filling it.
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Apr 15, 2019 19:48
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I haven't actually min/maxed the best current account offerings as I've always been with Natwest. Some people hate them but they've always been perfectly fine for me, the mobile app works well and there's a branch right by work for me to pay cash/cheques in etc.  My pay goes into firewalled account #1 and then standing orders / direct debit does its things to automatically populate bills account / savings accounts / s&s / cash for the month
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Apr 16, 2019 08:54
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Doccykins posted:Natwest Natwest have always been fine for me also, and their online banking app/website is actually pretty good.
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Apr 17, 2019 11:47
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I've been meaning to convert my cash ISA into a stocks and shares one for about several centuries now. I'm pretty sure I'm going to sign up with Vanguard and put it all in a tracker fund, but I haven't got any further with signing up or deciding which fund, thanks to everything else in my life taking up my time. Current thought is probably a FTSE 100 tracker, but frankly I don't know if it's better to spread it across different funds, or look at a FTSE 250, or whether to wait or act now in the context of Brexit.
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Apr 25, 2019 15:11
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Great first post!
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Apr 25, 2019 19:07
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No bugger knows what's going on with Brexit; not even the government in charge of delivering it. Best advice I can think of is to disregard it as a factor in anything as, unless you're one of the bastards braying for Brexit while fattening up their Cayman accounts, it's going to affect everyone just the same.
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Apr 25, 2019 19:13
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Can I use this thread to ask about credit card related questions in the UK? I've heard people bounce between CC introductory offers (specifically, the 0% purchase offers) by rotating between bank providers once the offers expire. My situation is: I'm fully enjoying an introductory offer on a CC I've had for nearly 2 years. 0% on purchases until next June, never racked up a single penny in interest, and I have a cyclical thing where ~3 months I bring the balance right back down to £0. I kept trying to apply for a Student Overdraft Account which would have given me £3,000 interest free overdraft, but kept getting rejected as I had a CC with £1,500 limit and a car on finance for £19,000. I have been trying yearly to get this loving Student Overdraft Account and finally gave up. Applied for a limit increase on my CC which took me from £1,500 to £4,500. So I basically have my Student Overdraft Account, just through a CC. And I know by next June, whatever I've accrued, I'll 100% have paid off well before next June just so I don't get shafted by interest. My question is - once this introductory offer expires, I'm not really going to use the CC. Is it better to close the account down, or should I drop the credit limit down to the lowest it'll go (probably £250 or £500)? I don't know which has a more negative impact on my credit score (which, last I checked two months ago was 986/999 on Experian). I've heard horror stories that closing CC accounts down can nuke your history and look bad, because the average age of your accounts drops once an account closes. My plan was to stop using this CC and then just get another CC with another bank provider and hopefully open it up with a £5,000 limit and enjoy the 0% purchase offer for another <long period of time>. I'm a 26 year old mature student with stable income and no risk of losing this financial security. If I were to lose the financial security, I'd have a good ~6 months warning, so I could pay off the £5,000 in roughly 3 months. I'm good with money, and have never gotten into debt. I keep on top of my finances like a miser. I just like having the 0% purchase offer because it allows me to buy things I can afford outright without going into finance plans that charge gross rates, and I can just spread the cost over time, so I can leave my Debit account with a lot of money in it as a safety net for emergencies / etc.
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Apr 25, 2019 19:44
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OneSizeFitsAll posted:I've been meaning to convert my cash ISA into a stocks and shares one for about several centuries now. It's up to you - The drawback with the FTSE100 tracker is there isn't much diversity in it (literally only 100 stocks and a quarter of the market cap is HSBC, BP, Shell and GSK) so if one company takes a sudden turn for the worse you'd be more exposed. If you want something fuller that follows the UK market the FTSE All Share is available for 0.08% ER rather than the 0.06% of the FTSE100 which is perfectly fine as you're getting 569 stocks instead of 100. Just looking the big four still make up 22% rather than 26% but you get exposure to small and mid cap which are more likely to jump (or sink) than the established large-caps so you'll get higher volatility in the All-Share. FTSE 100 make up FTSE All Share make up If you're pessimistic about Brexit just do the S&P500 instead, it sits in the middle at 0.07% ER. If you're pessimistic about Brexit and Trump pissing the economic bed at the same time then you can take the ex-UK World Fund , it's just a bit more expensive to run (0.15%) as you're buying into multiple markets. Definitely jump in now though if you aren't looking at using that money for the next few years - time in the market is always better than timing the market  e: making the assumption here that you already have some kind of pension going that is hedged with a bond allocation or in a target fund and the S&S is for higher risk investing Doccykins fucked around with this message at 20:19 on Apr 25, 2019 |
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Apr 25, 2019 20:15
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Qubee posted:Can I use this thread to ask about credit card related questions in the UK? I've heard people bounce between CC introductory offers (specifically, the 0% purchase offers) by rotating between bank providers once the offers expire. My situation is: Of course! I'm not sure how the dark arts of credit scoring judge your opening/closing accounts behaviour but I believe the rule of thumb is that you should have enough headroom to keep your overall utilisation below 30%, and have the new card for at least 6 months before closing the old one if you'd hit this cap by closing it. Not sure on the average age rule, but again I believe credit lenders like to look back at up to 7 years to ensure you haven't been through a bankruptcy or IVA, so if closing that card means you don't have any credit history up to that boundary it's probably better to keep it open and idle at a lower limit.
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Apr 25, 2019 20:34
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Ace answer, thanks. By overall utilization, you mean I should only be using 30% of my max limit? So my £4,500 limit, I should try not to exceed £1,350 of it? As for closing the card, I think it's overall safer to just drop the limit as far as I can, and then just use it sporadically for purchases that I pay off in full, just so the bank stays happy instead of leaving the CC dormant for years.
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Apr 25, 2019 20:40
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Qubee posted:Ace answer, thanks. By overall utilization, you mean I should only be using 30% of my max limit? So my £4,500 limit, I should try not to exceed £1,350 of it? Precisely - It won't kill your credit score if you're over that 30% boundary, but you'd tend to get a better rate/ceiling for a mortgage or other large loan if you can show fiscal responsibility by having credit available but not using it.
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Apr 25, 2019 21:07
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Doccykins posted:It's up to you - The drawback with the FTSE100 tracker is there isn't much diversity in it (literally only 100 stocks and a quarter of the market cap is HSBC, BP, Shell and GSK) so if one company takes a sudden turn for the worse you'd be more exposed. If you want something fuller that follows the UK market the FTSE All Share is available for 0.08% ER rather than the 0.06% of the FTSE100 which is perfectly fine as you're getting 569 stocks instead of 100. Just looking the big four still make up 22% rather than 26% but you get exposure to small and mid cap which are more likely to jump (or sink) than the established large-caps so you'll get higher volatility in the All-Share. Thanks for your thoughts and suggestions there. Yeah I should have said that this is for long-term savings investment and not something at I'd be looking to draw down upon for the remotely forseeable future. Tracker funds from all I've read seem to very well-suited to that type of time scale, and in any case it seems a no-brainer vs a cash Isa with its risible interest rates. But can I ask which do you think would be more suited to that strategy between the All-Share and 100? Is it worth considering other countries? I have a pension which is qualifying earnings. My income is increasingly more than I need to cover all my expenses, so my strategy will probably be to top up the Isa each year, overpay on the mortgage and look at paying a bit more into the pension, in that order of priority. I only really started the pension once it became mandatory without opting out, and have been meaning to move the Isa to some form of index-linked investment for ages for the reason you mention, so I'm obviously something (or all) of a terrible procrastinator.
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Apr 25, 2019 22:56
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I found this site a really useful resource when I was planning what to put in to my stocks & shares ISA/SIPP: https://monevator.com/ Extremely TL;DR version is: global stock tracker 60%, bonds 40%.
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Apr 26, 2019 16:55
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UK goon checking in at the same place as the op, also aiming for fire (don't you loving privatise the NHS you bastards I do not want to have to budget for healthcare). Regarding where to invest I take the efficient market hypothesis to it's conclusion. I can't beat the market, I don't believe anyone who will manage my money can either (consistently and on aligned fee basis). Given I don't have special knowledge as to which stock to invest in vs another why should I think I know which market to invest in. Add to that my huge exposure to the UK (I live here, work here and own property here - my house) it makes sense to me to buy the hay stack. Invest global funds excluding uk or global developed market excluding uk. I'll pay a few basis points for that. This also protects me from a collapse in the pound. Though I am at risk from the pound suddenly getting super strong (lol). Regarding car insurance and insurance in general. Switch every year. The industry for general insurance has hosed itself with a model that loses money based on first year pricing. Its dumb and I could talk for hours on it but the short of it is if you don't switch your picking up the slack in years 2 3 4 and 5. Both yours and everyone else that switched. Also optimise your insurance. Be loving wary of add-ons they all make bank for the insurance companies. Play with the excess as well. I personally have sky high excesses because I am in a position to pay the small stuff and only want insurance for disaster protection. Think about what you want covered carefully and try to eliminate use cases you don't want. Things like accidental damage and out of home cover for stuff sound good but all add to the premium. A good emergency fund and the ability to replenish starts earning you a return here.
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May 15, 2019 18:37
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Thanks for plugging this thread in on the BWM thread. Looks like there’s some reading I need to do As a quick contribution this budgeting template got posted in the KnyteGuy thread which some goons swear by: https://srv-file2.gofile.io/download/T7uEzr/budgettemplate.xlsx Not super sure it’s for me as it requires a bit more manual input than I like and it does not render on my phone alright, but maybe someone will find value of it
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Jul 8, 2019 22:18
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I have some questions regarding buying a house for the first time in the UK- not sure if this is the right place to ask but the obvious threads in BFC appear more tailored to the US. I was wondering if there is a good rule-of-thumb for how much you should expect to set aside for home-ownership related expenses excluding mortgage in the UK? The only things that spring to mind are council tax, insurance and some fraction of the property value dependent on age of the property for maintenance and upkeep but I'm sure there's more to it than that. Are there other taxes/expenses on top of this (excl. bills like internet, electricity, heating)? Is there a way to work out approximately how much these are likely to cost? I ask because I might be able to pay for a house up front without needing a mortgage: I'm moving from a country where I have to either move my pension pot out of the country with me to another pension fund, or use it to buy property. What worries me is that if I just dump all of my savings + overseas pension into it I could afford a property without a mortgage but this wouldn't leave me with much in reserve, and if I blow all my savings I'm worried I'd end up owning a house I might not be able to afford unless I know all the associated costs up-front. Also, given the weird way in which I would have to arrange payment were I to buy a house this way, does anyone know who I should be talking to about it in an official capacity? Is a solicitor capable of advising on / dealing with the paperwork for transferring funds from foreign pensions, or do I need an accountant on top of that?
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Aug 13, 2019 17:29
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Stupid question: will you be employed when you move to the UK?
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Aug 13, 2019 23:30
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Not stupid at all- yes, I'll be employed.
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Aug 14, 2019 07:41
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StarkingBarfish posted:I have some questions regarding buying a house for the first time in the UK- not sure if this is the right place to ask but the obvious threads in BFC appear more tailored to the US. Monthly Expenses related to home ownership, with some ballpark monthly figures: - Council Tax (you can look this cost up, you pay it for 10months a year) £200 - Electric Bill £75 - Gas Bill £50 - Water Bill £30 - Estate Management Fee (possibly) £10 - Telephone Bill £12 - Internet Bill £30 - TV License £13 - Sky TV Bill £26 - Home Insurance £15 This should give you a rough idea for how much stuff costs on a monthly basis. Speak to the solicitor who is handling your conveyancing and they should be able to advise on the transferring of funds. Also you may have to pay stamp duty when purchasing the house, this is a tax based on the value of the house you are buying and can be a significant expense when moving. Other costs to consider are removal costs and solicitors conveyancing fees.
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Aug 14, 2019 09:55
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This guy knows what he is talking about. Those are all the costs I can think of. You'll pay the solicitor to handle the house purchase and they'll have a UK bank account to hold your money for the sale. You'll need to sort out your US funds there, then do a simple SWIFT transfer to the solicitor's account. That's very easy. quote:I'm moving from a country where I have to either move my pension pot out of the country with me to another pension fund, or use it to buy property. Your car is going to cost you, say £5k to buy, £145pa road tax and insurance (varies a lot but say £400pa)
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Aug 14, 2019 10:58
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There may also be management fees and ground rent, depending on the property. These can be anywhere from a few pounds a month to thousands a year. For my flat in a converted house we pay £110 a month
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Aug 14, 2019 12:14
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Thank you all, this is extremely helpful!Slash posted:- Estate Management Fee (possibly) £10 Do I understand correctly that this isn't something you pay on a house, but more on an apartment in a managed block, or a private estate? Slash posted:Also you may have to pay stamp duty when purchasing the house, this is a tax based on the value of the house you are buying and can be a significant expense when moving. I was looking into this, and I think I qualify as a first time buyer (I've only ever rented until now). If the cost of the property is < 300kGBP this means the stamp duty is waived, right? Shut up Meg posted:You'll pay the solicitor to handle the house purchase and they'll have a UK bank account to hold your money for the sale. You'll need to sort out your US funds there, then do a simple SWIFT transfer to the solicitor's account. That's very easy. This is where it gets tricky. The pension funds are held in a vested benefits account, and to access them for purchase of property I need to provide the institution with: – officially authenticated purchase agreement or draft of purchase agreement (not older than 3 months) – confirmation of how funds are to be used from mortgage creditor or notary – consent to the annotation of the selling restriction in the land register The selling restriction appears to be that the vested benefits institution wants to ensure the money from the sale either goes back into a pension or into a new property. If I understand this correctly, I have to find a property I want to buy, agree to buy it, and only then do I have the necessary documentation the vested benefits fund needs to authorise the transfer. I was hoping to avoid renting completely and just move from where I am now to a property I own (with several trips to view properties, arrange a solicitor, etc. Is this laughably naive? I have a little bit of leeway as to when my contract in the UK starts, but it will likely be in Q1 of 2020.
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Aug 14, 2019 12:59
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Shut up Meg posted:insurance (varies a lot but say £400pa) Probably more than that if he has no previous car insurance/driving history in the UK. My wife's been driving for 20 years in America but was treated as a new driver and we paid about £1000 in the first year.
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Aug 14, 2019 13:17
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spincube posted:Any thoughts as to current account offerings?. Nationwide's online-only account will do you 5% interest paid monthly for a year. They used to have a regular saver account at the same rate but they shut it down because it wasn't "used by the target audience". (I.e. it was too competitive and people with big pots were optimising their liquidity with it.)
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Aug 14, 2019 13:19
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feedmegin posted:Probably more than that if he has no previous car insurance/driving history in the UK. My wife's been driving for 20 years in America but was treated as a new driver and we paid about £1000 in the first year. Thanks both- I actually don't own a car or plan to drive if I don't have to. It's still useful to know what this might cost though since that may change.
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Aug 14, 2019 13:42
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StarkingBarfish posted:Do I understand correctly that this isn't something you pay on a house, but more on an apartment in a managed block, or a private estate? A flat (leasehold) will have a small ground rent and a service charge (variable, but will be stated on the listing. Assume £1k pa as a rough ballpark Note that there were some scummy developers (is there any other type?) who sold houses with a leasehold, but that's not common: https://www.theguardian.com/money/2017/jul/25/leasehold-houses-and-the-ground-rent-scandal-all-you-need-to-know Oh, make sure you know the length of the leasehold if you go that way - you want to avoid places with <80 years on it. StarkingBarfish posted:Thank you all, this is extremely helpful! https://www.gov.uk/stamp-duty-land-tax/residential-property-rates StarkingBarfish posted:If I understand this correctly, I have to find a property I want to buy, agree to buy it, and only then do I have the necessary documentation the vested benefits fund needs to authorise the transfer. I was hoping to avoid renting completely and just move from where I am now to a property I own (with several trips to view properties, arrange a solicitor, etc. Is this laughably naive? I have a little bit of leeway as to when my contract in the UK starts, but it will likely be in Q1 of 2020. Honestly, I think that is optimistic. If all went perfectly, you're looking at a month to find the right place and two more to complete the sale. I'd get rent first as it takes the pressure off. Plus, if you don't know the area, it gives you time to decide if you are looking in the right place. Plus, brexit happens soon and that might tank the property prices. It could be good to wait until they bottom out and then buy. That might not happen, but I bet they don't increase from today's prices. feedmegin posted:Probably more than that if he has no previous car insurance/driving history in the UK. My wife's been driving for 20 years in America but was treated as a new driver and we paid about £1000 in the first year.
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Aug 14, 2019 13:44
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Shut up Meg posted:Honestly, I think that is optimistic. Thanks. I can certainly rent for a bit, I'm just tired of moving and wanted to avoid it if I could. If it's unrealistic not to it's not a big deal.
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Aug 14, 2019 14:08
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spincube posted:Any thoughts as to current account offerings? Echoing the Nationwide 5% one. If you’ve got a previous current account and a referral code from a buddy you even get slipped a sweet 100 on top of that. Note that the 5% is only on balances up to 2500 Otherwise you can go on which/mse and they’ve got a current accounts list going with the highest interest rates. I’ve got a couple of the ones in the which selection
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Aug 14, 2019 21:36
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The fact that leaseholds exist is a whole big tin of  , I would advise either buying a freehold house or try to get a share of freehold at least if it's an apartment or such.There are all kinds of horror stories around about leasehold apartments, you can find more info online (I'm too lazy to dig it out right now)
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Aug 14, 2019 23:37
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Shut up Meg posted:Correct. A house (freehold) will not have any service charge/ground rent. I live on a new build estate, we own freehold and we have to pay an estate management fee. This covers the maintenance of the communal areas of the estate as it is "un-adopted", which means the council aren't responsible for doing it. Our previous house was also on a new-build estate and we had the same. Old estate was ~£250pa, new one is ~£150pa. quote:I was looking into this, and I think I qualify as a first time buyer (I've only ever rented until now). If the cost of the property is < 300kGBP this means the stamp duty is waived, right?
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Aug 15, 2019 09:29
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jaete posted:The fact that leaseholds exist is a whole big tin of Wait until you hear about rentcharges!
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Aug 15, 2019 11:59
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Anyone P2P lending? I use Funding Circle to invest a little. Last year, I did a test sell and sold off all my loan parts in about a day. Right now, the selling time is estimated at 92 days and growing! Not much use being happy about earning 8% interest if it's harder to get your money out than bitcoins.
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Aug 27, 2019 14:49
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Can you do P2P lending in an ISA wrapper? If not then I'd very much fill up the £20k first before attempting Capital Gains Tax liable investments. 8% isn't all that much anyway when you consider the last couple of years in an index tracker (though past performance is of course no guage for future returns)
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Aug 27, 2019 18:40
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Doccykins posted:Can you do P2P lending in an ISA wrapper? If not then I'd very much fill up the £20k first before attempting Capital Gains Tax liable investments. 8% isn't all that much anyway when you consider the last couple of years in an index tracker (though past performance is of course no guage for future returns) Yes, FC introduced an ISA option earlier this year. To be honest, I have fallen out of love with FC now. At first it was good because it was almost instant access and you could choose who you were lending to, so as well as managing your risk a bit more closely, there was a game aspect to it that was kind of fun. Now it's a big pot of borrowers that you have little control over and they seem to happily lend cash to people I wouldn't lend a bus fare to, especially given upcoming events.
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Aug 27, 2019 21:06
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Funding Circle is a pretty interesting idea, but it will be even more interesting to see what happens with it once the next recession arrives
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Aug 27, 2019 21:09
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Great OP. If you are travelling to abroad then consider (depending on country) either getting a transferwise borderless or halifax clarity card. Both offer no or very low fees and very good exchange rates on foreign purchases and were easily the best options last time I looked. The halifax clarity in particular is essentially free as long as you aren't withdrawing cash and are paying off by direct debit every month.
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Aug 28, 2019 13:59
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jaete posted:Funding Circle is a pretty interesting idea, but it will be even more interesting to see what happens with it once the next recession arrives If belts get tightened, I can see them giving loans to people who are worse risks (after all, it's not FC's money that gets lost if they default) This lowers the returns and makes it a less tempting investment, so ever fewer people put money. More loans, fewer investors makes the secondary market shrink, so investors can never liquidate early and have to wait until the loan is paid off Which, because of the second point, will be longer term loans and your money is stuck there for he full 60months In conclusion: gently caress. pointsofdata posted:If you are travelling to abroad then consider (depending on country) either getting a transferwise borderless or halifax clarity card. Both offer no or very low fees and very good exchange rates on foreign purchases and were easily the best options last time I looked. The halifax clarity in particular is essentially free as long as you aren't withdrawing cash and are paying off by direct debit every month. Protip: if you prepay your Clarity card so that you are in credit, you can make a cash withdrawal at an ATM and not pay any cash advance fee. You're withdrawing cash at the interbank rate (Their helpline will only admit this really reluctantly)
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Aug 28, 2019 15:47
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