Wealth Check: 'My family has expanded greatly and money is tight'

Nick Brown recently remarried, and the couple have seven children between them, aged eight to 17. Since the wedding money has been tight, however, not least because they have extended their house to fit everyone.

Nick Brown recently remarried, and the couple have seven children between them, aged eight to 17. Since the wedding money has been tight, however, not least because they have extended their house to fit everyone.

Also, Mr Brown's job was outsourced, and he faced moving north or accepting a job with lower status. Relocation was not an option, so Mr Brown is due to start a new job soon, which will bring a significant increase in his current salary.

Mr Brown wants to know how he can save. Currently his outgoings exceed his income, and his wife is looking to take on another job. This is a burden the couple could do without, however, as Mr Brown concedes that already "running such a big household is a nightmare".

He would like to know how to boost his savings, especially in case of emergencies, and if his financial position in in good shape for the future.

NICK BROWN, 45, PROGRAMME MANAGER

Salary: Combined £44,600.

Debt: £15,000 NatWest loan. Credit cards £5,300.

Property: £97,000 Abbey mortgage, fixed at 7%.

Savings: £2,260 Norwich Union. £2,050 Scottish Friendly; both Isas.

Investments: 145 shares with Grupo Sandander. 2,272 shares with Xansa.

Pension: various; expected to give income of £30,000.

Monthly outgoings: Child support £677. Mortgage £731. Bills £290. Food £650. Loan payments £250. Car insurance £44.

We put his case to Justin Modray at BestInvest, Ben Yearsley at Hargreaves Lansdown and Patrick Connolly at John Scott.

Debt, Mortgage And Spending

Mr Modray doesn't think that Mr Brown is spending money on unnecessary luxuries. Instead, the cost of raising a large family, and Child Support, is the root of his high outgoings.

One option for the family would be to remortgage their home - they have a good amount of equity - and transfer their loan and credit-card debts to the new mortgage. Mortgage interest rates are significantly lower than other loans, and there are plenty of discounted and fixed rate mortgages on offer at five per cent or under.

He should check first for redemption penalties, not just on his existing mortgage but on his personal loan, too. Mr Connolly says that Mr Brown's mortgage deal with Abbey could be bettered. Even paying one per cent less interest will save the family almost £1,000 a year.

As an alternative, Mr Brown could switch to a credit card offering a zero per cent rate, though he should watch for charges after the free period.

Mr Yearsley suggests that Mr Brown should think about selling some or all of his investments and using the money to pay off debt, starting with the credit cards and then the loan, assuming there are no onerous repayment penalties on the latter. Mr Yearsley agrees that there is little scope to cut outgoings, but suggests that the Browns could look to switch gas and electricity suppliers.

Pensions

Mr Brown is far from unusual in having his retirement savings spread across a number of providers and schemes. He is, however, in a relatively good position for retirement. Mr Modray says that Mr Brown should check the terms of his new employer's pension. If it does not match his current scheme he may need to top it up, as his projections for retirement are based on his current pension plan.

Mr Yearsley says that a consolidation exercise might make it easier for Mr Brown to manage his pension planning. He should also check whether his former wife is entitled to any of his pension under their divorce settlement.

Investment And Savings

Investment is not an immediate priority for Mr Brown. Mr Yearsley suggests that Mr Brown's two Isa investments and his shares could be used to repay debt. It would almost halve what he owes, and the interest he is currently paying is very likely to exceed any investment returns.

Mr Connolly agrees that selling the shares and Isas is the best option for Mr Brown. Once he has paid off as much of his debt as is possible, he should then aim to build up cash savings. This will reduce the family's need to borrow to cover any emergencies. A mini-cash Isa offers tax-free savings along with competitive interest rates.

Mr Modray says that Mr Brown should use the proceeds of any cost-saving measures, along with any spare cash he has once he moves jobs, to build up savings. He should look for an Isa that offers instant access to his money.

If Mr Brown does feel he has the scope to invest in the stockmarket, Mr Modray recommends that he reviews the performance of his current funds. If he does not feel that the performance is up to scratch, he could make a switch to a global fund, such as Jupiter's Merlin Growth Isa.

Advisers' views are given for guidance only.

If you would like a free financial check-up, which will appear in the Wealth Check column, write to The Independent, 191 Marsh Wall, London E14 9RS, or e-mail cash@independent.co.uk.

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

News
John Travolta is a qualified airline captain and employed the pilot with his company, Alto
people'That was the lowest I’d ever felt'
Life and Style
healthIt isn’t greasy. It doesn’t smell. And moreover, it costs nothing
News
i100

Other places that have held independence referendums
Sport
Jonas Gutierrez (r) competes with Yaya Toure (l)
football

Newcastle winger Jonas Gutierrez reveals he has testicular cancer - and is losing his trademark long hair as a result

PROMOTED VIDEO
Arts and Entertainment
Blossoming love: Colin Firth as Stanley and Emma Stone as Sophie, in 'Magic in the Moonlight'
film

Actors star in Woody Allen's 'Magic in the Moonlight'

News
peopleThe Times of India said actress should treat it as a 'compliment'
News
news

Watch this commuter wage a one-man war against the Circle Line
News
We are phenomenally good at recognising faces; the study showed that humans have been selected to be unique and easily recognisable
science

Human faces unique 'because we don't recognise each other by smell'

Property
Home body: Badger stays safe indoors
lifeShould we feel guilty about keeping cats inside?
News
A male driver reverses his Vauxhall Astra from a tow truck
news

Man's attempt to avoid being impounded heavily criticised

Arts and Entertainment
US pop diva Jennifer Lopez sang “Happy Birthday” to Gurbanguly Berdimuhamedow, president of Turkmenistan
musicCorporate gigs become key source of musicians' income
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
filmsDaniel Craig believed to be donning skis as 007 for first time
Student
The Guildhall School of Music and Drama is to offer a BA degree in Performance and Creative Enterprise
student

Arts and Entertainment
Pulp-fiction lover: Jarvis Cocker
booksJarvis Cocker on Richard Brautigan
Arts and Entertainment
Robin Thicke and Pharell Williams in the video of the song, which has been accused of justifying rape
music...and he had 'almost no part' in writing it
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Trainee Recruitment Consultant - Birmingham - Real Staffing

    £18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

    Recruitment Consultant - Soho - IT, Pharma, Public Sector

    £20000 - £25000 per annum + OTE £35,000 first year: SThree: The SThree group i...

    Sales Executive

    £20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...

    Payroll & Accounts Assistant

    £20 - 24k + Benefits: Guru Careers: This is a great opportunity for an enthusi...

    Day In a Page

    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
    These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

    Widespread fear of Isis is producing strange bedfellows

    Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
    Topshop goes part Athena poster, part last spring Prada

    Topshop goes part Athena poster, part last spring Prada

    Shoppers don't come to Topshop for the unique
    How to make a Lego masterpiece

    How to make a Lego masterpiece

    Toy breaks out of the nursery and heads for the gallery
    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
    Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

    Ian Paisley’s decision to make peace with his IRA enemies

    His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
    'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

    'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

    Exclusive extract from Janis Winehouse's poignant new memoir
    Is this the role to win Cumberbatch an Oscar?

    Is this the role to win Cumberbatch an Oscar?

    The Imitation Game, film review
    England and Roy Hodgson take a joint step towards redemption in Basel

    England and Hodgson take a joint step towards redemption

    Welbeck double puts England on the road to Euro 2016
    Relatives fight over Vivian Maier’s rare photos

    Relatives fight over Vivian Maier’s rare photos

    Pictures removed from public view as courts decide ownership
    ‘Fashion has to be fun. It’s a big business, not a cure for cancer’

    ‘Fashion has to be fun. It’s a big business, not a cure for cancer’

    Donatella Versace at New York Fashion Week