FINANCIALLY FABULOUS

We’re on a mission to empower YOU to take control of your financial future and lead the life you want to – in short, to become Financially Fabulous! Whatever you need to know, from budgeting and saving to mortgages and credit cards, we’ve got it covered.

Q How much money do you really need to invest in A stocks and shares? People often think that you need thousands of pounds to start investing but, actually, you can start from as little as £1 a month or with just a small lump sum of around £100 by putting money into a stocks and shares ISA (the minimum amount that share providers allow you to invest can vary). You can put away as much as £20,000 into an ISA this tax year (which runs from 6 April 2018 to 5 April 2019) and the money you earn is tax-free.

The advantage of a stocks and shares ISA is that the return is potentially higher than you would receive from an ordinary savings account. With a medium-risk investment, you could expect a potential return of 5%; at a higher risk level, you could even achieve a return of 8% or more on your money.

Stock markets can go up as well as down, so there is always a chance that you may not get back what you invest, but remember that investing is for the long term so your money has time to grow. Be prepared to invest for a minimum of five years and, ideally, 10. Q Should I try to overpay my A mortgage? Overpaying your mortgage is a great way to reduce its length, but there are things to consider. If you have other expensive debt, such as loans or credit cards, it’s best to pay these off first.

Most lenders allow you to overpay by around 10% of your mortgage a year, but check if your lender has restrictions or you could incur an early repayment charge (EPC). You’ll find details on your mortgage agreement or you can ask your lender about the EPC. EPCS typically vary between 1% and 5%. Q How much money should I be putting A into a pension? The simple answer? Probably more than you’re putting in at the moment! Most people underestimate how much money it takes to have a comfortable retirement. According to one major UK insurer, those over 50 expect to need around £1,360 a month to live comfortably. This would require a pension pot of £311,000 – yet the average pot is just £71,342.

But don’t panic – you can pump more money into your

pension at any time. If you’re in employment, the good news is that you can also benefit from additional employer contributions, which will match your own contributions up to a certain amount.

As a rule of thumb, take your age, halve it and the resulting figure is the percentage of your income that you need to put away. So, if you start at 20, you’ll need to put 10% into a pension; if you’re starting at 50, it should be 25% of your income. Q Is it worth switching savings accounts to get better deals? A Banks offer a decent rate to lure you into opening a savings account, but this usually only lasts 12 months. So, switch savings accounts after a year (or when a deal ends) to bag a better interest rate. Some current accounts offer higher interest rates than savings accounts. Q How much do I need to save to put my child A through university? The cost of university keeps rising – tuition fees are £9,250 per year. But they aren’t the only cost to consider – living and day-to-day expenses can eat into your bank balance.

If your child is some way off university, open a junior investment ISA (bear in mind that with an investment ISA, you should save money for at least five years). Your son or daughter (and only them) can access the money once they are 18 to hopefully fund their studies!

If your child is going to university in the near future, try a fixed-rate savings account or a junior cash ISA. Shop around for the best interest rates so that you receive the highest return.