Wealth Check: 'I've got 18 months to raise £10,000'

Justin Westcott, 27, London

Justin Westcott, 27, lives in a flat in Clapham, south London, that he bought six months ago. Although he earns a decent salary, the £179,500 purchase price left him stretched, and his mortgage is set up on an interest-only basis. That makes the monthly payments more affordable but the capital he owes is not being repaid.

Justin is also concerned because he doesn't have the money to pay a £10,000 service charge due in 18 months for new double-glazing that he was required to install shortly after moving into his new home.

Saving for a pension is Justin's final financial priority - currently he has no retirement savings.

We asked three firms of financial advisers - Chase de Vere, Hargreaves Lansdown, and John Scott & Partners - for their help.

Case notes

Personal: Justin works in public relations and earns between £30,000 and £40,000 a year

Savings: £500 in online account, no investments or pension

Mortgage: £162,000 Northern Rock loan, costing 5.99 per cent a year

Debt: £1,300 on NatWest credit card; £8,000 car loan costing £179 a month


"Getting the mortgage sorted is the top priority," says Hargreaves Lansdown's Ben Yearsley. "His options are to change to a repayment mortgage or to start a savings plan such as an ISA, to cover the mortgage capital when it falls due."

If Justin puts £200 a month into a stocks-and-shares ISA, Yearsley points out, he will still be allowed to open a cash ISA, which could be a good savings vehicle for other needs, such as rainy-day cash and the double glazing bill.

With 23 years to go until the mortgage is due to be repaid, a stock market ISA could be a good bet, Yearsley says. "Equity income funds make a decent start as they tend to invest in UK-based, profitable, dividend-paying companies."

There is, of course, a risk that an ISA might not grow sufficiently to repay the mortgage, though Justin will be able to monitor performance as time goes by. But the total monthly payments using this model will be smaller than if Justin switches to a straightforward repayment mortgage.

Patrick Connolly of John Scott adds: "The initial focus should be to pay off the debt where the highest interest is charged - either the car loan or the credit card." While Justin is understandably worried about the cost of the double glazing, there's no point saving money if he earns a lower rate of interest on the cash than he pays on his debt.

At the very least, Connolly suggests, Justin must consider cheap credit-card deals such as 0 per cent offers and move his NatWest account.


"Raising £10,000 won't be easy, and the only option may be to take out another loan, maybe added to the mortgage as the money was spent on home improvements" says Susan Hannums of Chase de Vere. "Justin should also put as much as he can into a high-paying savings account, such as the Halifax Regular Savings deal that pays 7 per cent for a year."

Juggling these demands won't be easy, Hannums adds, and Justin must start by becoming more organised about his money.

"Budgets are not necessarily just about cutting back or saving money but just monitoring your money is important," says Hannums. "This shouldn't stop him going out or buying clothes, say, but if Justin can put by a set amount each month to spend on these luxuries, he will be much less likely to overspend."


Hannums' colleague Anna Bowes says there are low-cost pensions that could make a good starting point for Justin as he begins thinking about saving for old age.

"A stakeholder pension could be right for Justin, if he chooses one with a good choice of funds, such as Legal & General or Standard Life," she says. These plans will allow Justin to make contributions of as little as £20 a month, though Bowes suggests he tries to save a little more if he can possibly find the money.

Yearsley adds: "As a broad rule of thumb, you should save half your age as a percentage of your salary each year." In other words, he says, Justin should be saving around 13.5 per cent of his salary, which equates, after tax relief, to around £240 a month.

This may not be realistic while Justin is also saving for the cost of the double glazing and thinking about his mortgage, but the early pension money can be saved, the more it will produce in old age.


Yearsley says it is important for Justin not to become over-anxious. "He is in a relatively decent position, with a good salary, not much debt apart from the mortgage and still under the age of 30," he adds.

However, one additional area the financial adviser believes Justin must address is protection. Currently, he has no insurance that would pay out if he was unable to work due to ill-health or an accident.

Wayne’s estate faces a claim for alleged copyright breaches
John Wayne's heirs duke it out with university over use of the late film star's nickname
Arts and Entertainment
Celebrated children’s author Allan Ahlberg, best known for Each Peach Pear Plum
peopleIndian actress known as the 'Grand Old Lady of Bollywood' was 102
Mick Jagger performing at Glastonbury
Germany's Andre Greipel crosses the finish line to win the sixth stage of the Tour de France cycling race over 194 kilometers (120.5 miles) with start in Arras and finish in Reims, France
tour de franceGerman champion achieves sixth Tour stage win in Reims
Life and Style
beautyBelgian fan lands L'Oreal campaign after being spotted at World Cup
Arts and Entertainment
Chocolat author Joanne Harris has spoken about the financial struggles most authors face
Arts and Entertainment
filmSir Ian McKellen will play retired detective in new film
Finacial products from our partners
Property search
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

    Technical Support Analyst (C++, Windows, Linux, Perl, Graduate)

    £30000 per annum: Harrington Starr: A global leader in trading platforms and e...

    Junior IT Consultant (SQL, Java, C++, Oracle, Graduate)

    £28000 per annum: Harrington Starr: A fast growing consultancy to the financia...

    Technical Support Analyst (Windows, Linux, Unix, Graduate)

    £30000 per annum: Harrington Starr: Technical Support Analyst - Liverpool Stre...

    Juniper Network Engineer - CCNP / JNCIP / JNCIS / Juniper

    £65000 per annum: Harrington Starr: One of the world's largest privately owned...

    Day In a Page

    The true Gaza back-story that the Israelis aren’t telling this week

    The true Gaza back-story that the Israelis aren’t telling this week

    A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
    A History of the First World War in 100 Moments: The German people demand an end to the fighting

    A History of the First World War in 100 Moments

    The German people demand an end to the fighting
    New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

    New play reveals what Oscar Wilde said at trials

    For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
    Can scientists save the world's sea life from

    Can scientists save our sea life?

    By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
    Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

    Richard III review

    Martin Freeman’s psychotic monarch is big on mockery but wanting in malice
    Hollywood targets Asian audiences as US films enjoy record-breaking run at Chinese box office

    Hollywood targets Asian audiences

    The world's second biggest movie market is fast becoming the Hollywood studios' most crucial
    Grindr founder Joel Simkhai: 'I've found love on my dating app - and my mum keeps trying to hook me up!'

    Grindr founder Joel Simkhai: 'I've found love on my dating app'

    Five years on from its launch and Grindr is the world's most popular dating app for gay men. Its founder Joel Simkhai answers his critics, describes his isolation as a child
    Autocorrect has its uses but it can go rogue with embarrassing results - so is it time to ditch it?

    Is it time to ditch autocorrect?

    Matthew J X Malady persuaded friends to message manually instead, but failed to factor in fat fingers and drunk texting
    10 best girls' summer dresses

    Frock chick: 10 best girls' summer dresses

    Get them ready for the holidays with these cool and pretty options 
    Westminster’s dark secret: Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together

    Westminster’s dark secret

    Adultery, homosexuality, sadomasochism and abuse of children were all seemingly lumped together
    A History of the First World War in 100 Moments: Dulce et decorum est - a life cut short for a poet whose work achieved immortality

    A History of the First World War in 100 Moments

    Dulce et decorum est: a life cut short for a poet whose work achieved immortality
    Google tells popular music website to censor album cover art in 'sexually explicit content' ban

    Naked censorship?

    The strange case of Google, the music website and the nudity take-down requests
    Howzat! 8 best cricket bats

    Howzat! 8 best cricket bats

    As England take on India at Trent Bridge, here is our pick of the high-performing bats to help you up your run-count this summer 
    Brazil vs Germany World Cup 2014 comment: David Luiz falls from leader figure to symbol of national humiliation

    David Luiz falls from leader figure to symbol of national humiliation

    Captain appears to give up as shocking 7-1 World Cup semi-final defeat threatens ramifications in Brazil