Short answer: almost every "should I invest / overpay / save?" question has the same answer: it depends where you are in an order that UK advisers and the UKPersonalFinance community flowchart agree on almost exactly. Cushion first, expensive debt second, free employer money third, then the pension-vs-ISA choice, then this year's allowances — and only then the refinements. Money Horizon computes which step you are on from your own figures — the flowchart with your numbers on it.
The order, and why it is the order
1. A cushion you can reach. Three to six months of living costs in easy-access savings, before anything is invested. Not because cash earns well — because the cushion is what stops a broken boiler or a gap between jobs turning into credit-card debt at 25% or a forced sale of investments in a bad market. Every later step assumes this one exists.
2. Expensive debt. Paying off a debt charging 20% is a guaranteed, tax-free 20% return; no investment can promise that. The rule of thumb: clear anything charging more than you expect investments to earn (call it 5–7% before inflation). Mortgages usually sit below that line, which is why they are a genuine choice rather than a rule — the overpay the mortgage or invest calculator does that arithmetic for your rate.
3. The full employer match. If your employer adds £1 to your pension when you do, that is a 100% return before any tax relief or growth — the single best deal in UK personal finance, and the step most often left on the table. Check your scheme's ceiling; contribute at least to it.
4. Pension, LISA or ISA for the next £1,000.
- A pension gives tax relief at your marginal rate: £1,000 in costs a basic-rate taxpayer £800, a higher-rate taxpayer £600 — and someone in the 60% zone (£100,000–£125,140) just £400. The price: locked until 55 (57 from April 2028), and taxed on the way out beyond the tax-free quarter.
- A Lifetime ISA (under 40 to open): a 25% government bonus on up to £4,000 a year, for a first home or from age 60 — with a 25% penalty for touching it otherwise.
- An ISA: no relief, no bonus — and no lock and no tax, ever. Flexibility is what you are buying.
The usual pattern: pension to the match and for higher-rate money, ISA for money you might need before 57, LISA for a first home. The cost of £1 into a pension calculator shows your own relief rate, including national insurance if your employer offers salary sacrifice.
5. This year's allowances. ISA allowance (£20,000), pension annual allowance and up to three years' carry-forward, the marriage allowance, dividend and savings allowances — some vanish every 5 April. The planner's tax check lists what you are using, what you are not, and what each unused one is worth at your figures.
6. Beyond that: the estate. Once the steps above are covered, the money questions change shape: gifts and their seven-year clocks, the order to draw pensions and ISAs, charity, cover in trust — the levers that decide what your family receives. This is the territory the rest of Money Horizon maps.
The flowchart with your numbers on it
A static flowchart tells everyone the same thing. Money Horizon computes the steps against your actual figures: your cash against your monthly costs, your contributions, your marginal relief rate, the allowances the tax check finds unused, and the inheritance tax your plan faces — and names the first step that is not clearly covered. Where it deliberately has no data (your debts' interest rates, your scheme's match ceiling — nothing you type leaves your browser), it says "can't see" and tells you where to look.
See which step you are on — open the planner
Questions people ask
Should I invest or pay off debt first? Compare the debt's interest rate with what investing is likely to earn — about 5–7% a year before inflation for a balanced mix, not guaranteed. A 20% credit card loses that race every time; a 1.5% fixed mortgage almost never. In between, paying debt is the certain option.
Should I overpay my mortgage or invest? At today's mortgage rates it is genuinely close, and it depends on your rate, your tax band and your nerve. The planner's calculator runs both paths side by side with your figures.
Pension or ISA — which is better? For the same £1,000 of gross pay, a pension nearly always delivers more in retirement (relief in at your marginal rate, a quarter out tax-free, often a lower rate in retirement). The ISA wins on everything except the arithmetic: access, simplicity, and no future rule changes on the way out. Most people rightly hold both.
Is the emergency fund really three to six months? It is a range, not a law: steady secure income and two earners point to the lower end, variable income or one earner to the higher. What matters is that it exists and is instant-access.
Where does the order come from? It is the near-universal consensus of UK money guidance — the UKPersonalFinance community flowchart is the best-known statement of it. Money Horizon's contribution is computing where you are on it, not inventing the order.