£50k in savings, what to do

I<3Moneysaving
I<3Moneysaving Posts: 55 Forumite
in Savings & investments
Hello,

I have £50k in savings and I want to do something with it. Currently it just sits in a 2.8% internet savings account.

Does anyone have any decent suggestions for it? I do not need access to it currently, it is my savings from a few years working and I have no debts currently.
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Comments

  • xylophone
    xylophone Posts: 44,348 Forumite
    Name Dropper First Anniversary First Post
    Do you have an emergency fund?
    Do you have debts on which you pay more in interest than you can earn?
    Do you use your ISA allowance?
    Do you need capital security?
    Do you have a mortgage?
    Do you have a pension?
    And so on.

    You can save or invest or save and invest - what you choose to do depends on your circumstances and your attitude to risk.
  • I<3Moneysaving
    I<3Moneysaving Posts: 55 Forumite
    Do you have an emergency fund? Yes about three years salary above this 50k
    Do you have debts on which you pay more in interest than you can earn? No debts apart from student loan
    Do you use your ISA allowance? No, not sure what the big deal in £5k at 3% is.
    Do you need capital security? No
    Do you have a mortgage? No
    Do you have a pension? No am 24


    I do not mind risk, but obviously would not like to lose significant amounts. I know nothing about investing but would love to broaden my horizons
  • Lokolo_2
    Lokolo_2 Posts: 1,005 Forumite
    First Anniversary First Post Name Dropper
    OP you say what is the big deal with a 3% ISA, well it does work out quite a big deal as it is tax free interest, so compared to your 2.8% account which is taxable interest it makes quite a difference to use an ISA!

    Also you answered that you are 24 with regards to a Pension, does this mean you think you only need to start saving a pension when you are older? If you think that you must be naieve! I am 22 and have been saving into a pension since last year, I think the sooner you start the better, otherwise you'll regret the low payout when you retire!

    If you want to learn more about investments, then it may be wise to do your own research into them, nobody on here can spoonfeed you with the "right" option as it is a personal choice!
  • innovate
    innovate Posts: 16,217 Forumite
    Combo Breaker First Post
    I<3Moneysaving wrote: »
    Do you have a pension? No am 24

    24 is pretty late to start on a pension - - but better now than later/never

    http://www.adviceguide.org.uk/england/debt_e/debt_pensions_e/debt_starting_a_pension_e/why_have_a_pension.htm
  • xylophone
    xylophone Posts: 44,348 Forumite
    Name Dropper First Anniversary First Post
    You could use a stocks and shares ISA.
    You could start a pension.
    Both the above can have tax advantages, even more so if you are a higher rate taxpayer.

    Get reading!
    http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnSavingsAndInvestments/index.htm
    http://www.hmrc.gov.uk/incometax/relief-pension.htm
    http://www.hl.co.uk/investment-services/isa/why-invest-in-a-stocks-and-shares-isa
  • MoneySaverLog
    MoneySaverLog Posts: 3,232 Forumite
    Get the ISA and pension (ideally Defined Benefit if you can get it) sorted as a priority. ISA rates may not be great right now but it is tax free and builds up the amount you have over time.
  • Colin297
    Colin297 Posts: 111 Forumite
    Wow, that's impressive savings for your age. What do you do / earn?

    As for ISA's, you should realise that you can add to them every year. So if you had one for 10 years that would be about 60k 3% tax free interest each year. You'd be shocked at the saving you make, especially when the interest rates go up again.

    Obviously a few % on 5k isn't much for one year. But what about 10 years cumulatively? That and the fact your balance would be far higher than 5k after each year. That's the beauty of ISA.
  • I<3Moneysaving
    I<3Moneysaving Posts: 55 Forumite
    I never realised you could add to your ISA every year.I thought they expired at the end of the tax year. I have done some reading into ISAs and they do not make this very clear.

    I earned the money playing poker online, played a lot through uni and it was good to me.

    I did not mean to be negative towards pensions, I would like to start one once my company starts to at least match my contributions.

    Thanks for the replies guys, interested to know more about investing but it just seems like a minefield. Anymore input is very welcome.
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
    First Anniversary First Post Combo Breaker
    I<3Moneysaving wrote: »
    interested to know more about investing but it just seems like a minefield.

    You indulge in online gambling but regard investing as risky? :eek:

    The tricks with investing are to start early, take it seriously (put in decent amounts), contribute regularly (don't try and time it), make sure your investments are diversified around the world and across asset classes, and to keep fees low.

    You're right regards pension as here you benefit far more if you're paying tax at > basic rate and/or your employer will also contribute.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • innovate
    innovate Posts: 16,217 Forumite
    Combo Breaker First Post
    I<3Moneysaving wrote: »
    I have done some reading into ISAs and they do not make this very clear.

    Did you read through this? http://www.moneysavingexpert.com/savings/best-cash-isa
    I<3Moneysaving wrote: »
    interested to know more about investing but it just seems like a minefield

    Easily done - - just read some books (e.g. Smarter Investing by Tim Hales) and some reputable websites such as monevator.com
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