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Thread: Being thrifty

  1. #1
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    Being thrifty

    I doubt this really has a place here, but just want to tell someone!
    40 years ago today, I started a life insurance with an attached savings plan, only a modest amount, £5 a month, and then government tax relief, which meant I only paid £4.25, the tax relief went on for 30 years, then I had to pay the full £5 a month. The total paid is £2,130.00. Even when things were at their tightest it got paid. Some times savings are the first thing to go,, sometimes no choice, but it always got paid, and the payout today is £9730.00.
    Later that same year my new wife and I took out a joint one of the same plan, this time for £10 a month. This matures in September this year........Nice bit of security as you get older, for not too much of a struggle to pay.
    Oh, and on contribution based support group so no backlash in the form of reduced benefits..

  2. #2
    Senior Member Lighttouch's Avatar
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    Good for you Stree. With today's low interest rates it does seem pointless saving. However, if you take the view of a longer term investment plan over at lrast ten years you're monthly deposit will grow due to 'compound interest'. That means your original investment and interest gained is reinvested.

    I also dabble on the Stock Market via an ISA. I've had some really good investments that have outperformed everything since the referendum to come out of the EU e.g. the Games Workshop and one that didn't do so well e.g. iGas.

    We live in a consumer's society where everyone wants something now and will use credit cards to buy stuff now. As peoples debt grows they max out several plastic cards and just pay off the interest not the debt. It's a shame schools don't teach young people how to budget so they don't spend more than they earn.

    In the Far East people have a different mentality. They only spend what they can afford and save more. In places like China there is no back up like our Welfare System. If you fall on hard times you're on your own. Maybe that's why 'saving for a rainy day' is important to them.

  3. #3
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    Thanks for reply Lighttouch,
    I knew you would appreciate the post! Just so pleased to have hung on for the full 40 years, and its stablemate due in September too.
    Will be nearly 30 thousand to put to work..........Thinking about spreading it over some high interest ( well 2.66%) fixed accounts........good old compound interest put to work again. 5 year fixes probably.
    Bit long in the tooth to begin another stock n shares ISA, cash ISAs are paying less than current accounts..........and even annuities are still poor. I managed to buy my own annuity about 5 years ago, got what works out to be 5% rate on a joint life! Never get that now.....( I had X amount of money, small pot, and rang round annuity houses asking what they could do...........when I got best out of 5, I rang the other four and told them what they had to beat, then repeated exercise, eventually whittling down to 3, then two, then a too good to refuse final offer.( I found out that agents can pitch in with some of their commission to sweeten a deal)
    Thing is, I have never made a lot of money, but tried to make as much of the money I have had as I could.
    And of course what you say about instant gratification in society is right, and it is by no means limited to the younger generations sadly.

  4. #4
    Senior Member Lighttouch's Avatar
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    If you use a Smartphone you could use one of the new banks that don't have a physical presence so can afford to pay higher rates of interest.

    Atom Bank - https://www.atombank.co.uk

  5. #5
    The stocks and shares ISA have mixed feelings about but on balance would recommend, with the Internet trading making it more accessible you don’t need to be a millionaire as many people think, can invest £10 if you want.

    Several years ago I became desperate and wanted to pay for my treatment privately as the govt wouldn’t help me and I ended up investing all my savings (about £5000, needed about 10 x that for treatment) in some volatile companies (ie go up and down very quickly) and losing all my money. And didn’t get the treatment obviously.

    After that I began again investing any spare money (£50-100 monthly) into sensible investments. Did this for about 2 years then passed my driving test and it provided me with a way to leave the house, however due to car costs sadly my outgoings started exceeding my income, wasn’t going to lose this freedom though and started having to sell everything off. However the markets were generally up this whole time and the shares were worth a good few hundred more than I’d paid in over the 2 years. At least it gave me a few months more of being above zero!

    A better idea if you are under retirement age, I think if I was in a position with spare money in future I would invest it in a SIPP. That way you can’t be tempted to take it out plus as it is a pension it would not count towards your income/assets until you reach retirement age and start drawing on it.

    Edit to add — Also there are more benefits of the SIPP, govt will add a % equal to what (if any) income tax bracket you are in (effectively giving back the tax). If you are not paying income tax they add 20% so basically extra money. Just remember can’t access until retirement age unless become terminally ill.
    Last edited by Slowdriver; 09-01-2018 at 11:34 PM.

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