Wealth Check: 'I need to stop living for today'

Each week we give 'IoS' readers a financial makeover

After buying her first property as she turned 30, Jenny Letts now wants to bed down her finances and start saving for milestones long into the future.

The problem

After buying her first property as she turned 30, Jenny Letts now wants to bed down her finances and start saving for milestones long into the future.

Jenny bought a two-bedroom flat in Walsall, Birmingham, a year ago and has an £85,000, fixed-rate, repayment mortgage with Abbey. This currently costs her £425 a month.

"The property has gone up in value and is now worth £120,000," she says. "I'm glad to have got my first foot on the housing ladder but I want to start thinking about the future and am looking towards buying my next property with my boyfriend in a year or so."

When they do buy, she plans to rent out the home where she lives now for income.

Jenny usually spends all her wages each month but has some savings - £4,000 in an online Egg account and £200 in an individual savings account (ISA) with Intelligent Finance.

"I only recently started paying into the ISA and want to try to build it up," she says. "I'd also like to get more into investing next year; I'm keen to make my money work harder for me."

Jenny's other priority is to increase her pension contributions. "I've been paying into a Prudential company pension for around four years," she says. "But I only pay in £50 a month and I want to step this up."

She has neither life insurance nor income protection.

Although debts no longer cast a shadow, as she paid off her student loans last year, Jenny carries an Egg credit card.

"I try not to rely on this, and aim to pay it off in full each month," she says. "I want to get away from buying things I want immediately - such as clothes and make-up - and start thinking further afield."

The patient: Jenny Letts, 30, from Walsall

Job: senior account manager for a public relations company.

Income: between £24,000 and £30,000.

Savings: £4,000 in an online bank savings account and £200 in a mini cash ISA.

Investments: none.

Goal: to step up her saving and investing and secure her financial future.

The cure: Get more from your savings

Jenny needs a strict monthly budget to decide how much she can afford to spend each month. "She must be disciplined about her saving," says Patrick Connolly of independent financial adviser (IFA) John Scott and Partners.

Savings and debts

Jenny is in a sound financial position with no outstanding debt, says Darius McDermott of IFA Chelsea Financial Services. "It is great to see her take a long-term view - and investing in a cash ISA is a good start."

But he urges her to transfer her mini cash ISA savings from Intelligent Finance to a provider offering a higher rate, such as the 5.35 per cent on Abbey's postal ISA.

Mr Connolly says that while the Egg account pays a competitive 5.5 per cent rate of interest, Jenny will have to pay 20 per cent tax on these savings. "A better option would be to use her mini cash ISA allowance in the next tax year."


Jenny should ensure she has adequate and easily accessible cash savings for any short-term needs, before considering investing in shares or other assets, warns Mr Connolly.

However, if she can afford to put money by for the longer term now, she has to decide how much risk she's prepared to take.

Mr McDermott recommends that as a first-time investor, Jenny should avoid buying shares directly. "She would be better off investing in a stocks-and-shares ISA with a long-term view," he says.

"Investing in an ISA via a fund supermarket is often cheaper and allows you to put money into a greater spread of funds - spreading your exposure to risk."

By investing on a monthly basis, she can also reduce the risk of buying into the market just as it is about to fall.

Mr McDermott's fund recommendations include Framlington Equity Income, Invesco Perpetual High Income and Rathbone Income.


Nick Lincoln, from IFA Wilson Dean Financial Services, says Jenny should check whether her Abbey deal is competitive or whether she would be better off remortgaging. "Since her existing loan is only a year old, she needs to beware of redemption penalties if she wants to move to a cheaper deal or buy with her boyfriend."

The good news, says Mr Connolly, is that both Jenny and her boyfriend are likely to have made a profit on their properties by the time they come to buy together.


Jenny may only pay £50 a month but she has made a good start on her pension, according to Mr McDermott, since Prudential offers a decent range of funds.

Mr Lincoln says Jenny should be looking to raise her contribution to at least 10 per cent of her salary - and see if her firm will match that. "This is subject to affordability but she is currently only paying 2 to 3 per cent - and this won't deliver a sensible income in retirement."


Jenny has more pressing priorities at present, but Mr Connolly advises her to find out if her employer offers any form of income protection.

If you would like a financial makeover, write to Sam Dunn at The Independent on Sunday, Independent House, 191 Marsh Wall, London E14 9RS, or email s.dunn@independent.co.uk

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
Arts and Entertainment
Lena Dunham
booksLena Dunham's memoirs - written at the age of 28 - are honest to the point of making you squirm
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvDownton Abbey review: It's six months since we last caught up with the Crawley clan
Frank Lampard and his non-celebration
premier leagueManchester City vs Chelsea match report from the Etihad Stadium
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
Greg Dyke insists he will not resign as Football Association chairman after receiving a watch worth more than £16,000 but has called for an end to the culture of gifts being given to football officials
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
premier league
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave crime series
Mario Balotelli celebrates his first Liverpool goal
premier leagueLiverpool striker expressed his opinion about the 5-3 thriller with Leicester - then this happened
Britain's shadow chancellor Ed Balls (L) challenges reporter Rob Merrick for the ball during the Labour Party versus the media soccer match,
peopleReporter left bleeding after tackle from shadow Chancellor in annual political football match
Arts and Entertainment
Female fans want more explicit male sex in Game of Thrones, George R R Martin says
tvSpoiler warning: Star of George RR Martin's hit series says viewers have 'not seen the last' of him/her
Plenty to ponder: Amir Khan has had repeated problems with US immigration because of his Muslim faith and now American television may shun him
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Senior BA - Motor and Home Insurance

    £400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

    Market Risk & Control Manager

    Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

    SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

    £320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

    Head of Audit

    To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

    Day In a Page

    A roller-coaster tale from the 'voice of a generation'

    Not That Kind of Girl:

    A roller-coaster tale from 'voice of a generation' Lena Dunham
    London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

    London is not bedlam or a cradle of vice

    In fact it, as much as anywhere, deserves independence
    Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

    Vivienne Westwood 'didn’t want' relationship with McLaren

    Designer 'felt pressured' into going out with Sex Pistols manager
    Jourdan Dunn: Model mother

    Model mother

    Jordan Dunn became one of the best-paid models in the world
    Apple still coolest brand – despite U2 PR disaster

    Apple still the coolest brand

    Despite PR disaster of free U2 album
    Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

    Despite the result, this is the end of the status quo

    Boyd Tonkin on the fall-out from the Scottish referendum
    Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

    Manolo Blahnik: Flats, Englishness, and Mary Beard

    The shoe designer who has been dubbed 'the patron saint of the stiletto'
    The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

    Scrambled eggs and LSD

    Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
    'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

    'Normcore': Blending in is the new standing out

    Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
    Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

    New leading ladies of dance fight back

    How female vocalists are now writing their own hits
    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments