Where to move £41K to?

booklover · 29 May 2015 at 12:59PM

Hello

I hope someone can give me a little guidance. I'll try to be brief. I usually take control of our household finances, but due to illness have let this slide.

My husband is taking Voluntary Redundancy, today's his last day and he's received £41k compensation. It's currently sitting in a Halifax Reward account (virtually no interest). That's all so far, he'll be getting a pension of approx 40k, I think soon.

I'm confused as to where to deposit the £41k in the interim, until we decide what to do with it. We want as much interest as possible.

We've already maxed the 2 Santander accounts, so might open a single one. I'll check the best savings accounts again. We are mortgage free thankfully. All advice very much appreciated. appreciated.:A

AlanP_2 · 29 May 2015 at 1:04PM

Interest paying current accounts in the short term whilst you work out where you are and what your longer term plans and income will be once no salary coming in?

macman · 29 May 2015 at 1:11PM

Remember that he'll have to pay income tax on £11K of that £41K-only the first £30K is tax free.

Eco_Miser · 29 May 2015 at 7:55PM

Most of the banks offering 3% or more interest paying current accounts allow a couple to have two sole and one joint account - so £60k in Santander, £15k in Lloyds (4%), £6k in TSB (5%)(or more if you already have the accounts), £7.5k in Nationwide (5%), £12k in Tesco, £30k in BOS (3 sole accounts each)

kidmugsy · 29 May 2015 at 8:18PM

macman wrote: »

Remember that he'll have to pay income tax on £11K of that £41K-only the first £30K is tax free.

A vital point. Your husband should consider bunging approx £11k gross into a personal pension of some sort to avoid Higher Rate income tax. Then he can take the tax-free lump sum whenever he wants, and trickle the rest out as income drawdown taxed at 20% from next tax year onwards.

In fact he'd be wise to work out how much money he's going to have above the Higher rate threshold this tax year, since his April and May pay-packets might also be exposed to Higher Rate tax.

booklover · 11 June 2015 at 3:11PM

Thanks so much everyone. Apologies for delay in replying, but we're trying to adjust to this new point in our lives.

We understand the situation a lot better now. He was taxed at the higher rate, as his last salary was so high. I know he'll have to contact HMRC for a tax rebate.

You've been really helpful, thanks again. We're seeing an IFA next week for additional advice.

Take care.

Where to move £41K to?

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