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  • FIRST POST
    • Goodish33
    • By Goodish33 29th Nov 17, 9:05 PM
    • 6Posts
    • 4Thanks
    Goodish33
    Where to put £100,000?
    • #1
    • 29th Nov 17, 9:05 PM
    Where to put £100,000? 29th Nov 17 at 9:05 PM
    My partner has £100,000 in an HSBC account paying her a derisory 0.05% interest. We only just had our first chat about finances and I was very shocked!! She doesn't really understand banking. She's primarily saving for a house but that won't be for a couple of years at least and may never happen. She's risk averse, so we're not looking at investments, just savings type accounts.

    I'm trying to help her out. I've already told her that we need to split the money so she doesn't have more than £85k in any single institution.

    Given the amount, tax on the interest will become a concern. Should she max out her ISA allowance first? Would she be better getting a life time or help to buy ISA, or just a regular one? Would she end up having to do a tax return?

    I guess then I should just find the best fixed rate and instant access accounts and divide the money between them depending on what makes sense for how quickly she thinks she might need the money. Would it be best only going for a 1 year fix based the chance that base rate will rise?

    I'll also be making sure that she's got the best current account for her with a linked savings paying big interest, even though it will be a small balance.

    Many thanks for any help
Page 1
    • dividendhero
    • By dividendhero 29th Nov 17, 9:26 PM
    • 114 Posts
    • 92 Thanks
    dividendhero
    • #2
    • 29th Nov 17, 9:26 PM
    • #2
    • 29th Nov 17, 9:26 PM
    . She's risk averse, so we're not looking at investments, just savings type accounts.
    Originally posted by Goodish33
    No savings account in the country carries an interest rate that beats inflation, a savings account is therefore guaranteed to lose money in real terms...
    • Goodish33
    • By Goodish33 29th Nov 17, 9:31 PM
    • 6 Posts
    • 4 Thanks
    Goodish33
    • #3
    • 29th Nov 17, 9:31 PM
    • #3
    • 29th Nov 17, 9:31 PM
    That's true about the inflation rate and interest rates. There's a difference between losing 1% from the different between those rates and taking risks that could lose substantially more?

    Is there an alternative?
    • dividendhero
    • By dividendhero 29th Nov 17, 9:33 PM
    • 114 Posts
    • 92 Thanks
    dividendhero
    • #4
    • 29th Nov 17, 9:33 PM
    • #4
    • 29th Nov 17, 9:33 PM

    Is there an alternative?
    Originally posted by Goodish33
    Yes, put say 40% in investments and 60% in savings...
    • bigadaj
    • By bigadaj 29th Nov 17, 9:37 PM
    • 10,804 Posts
    • 7,098 Thanks
    bigadaj
    • #5
    • 29th Nov 17, 9:37 PM
    • #5
    • 29th Nov 17, 9:37 PM
    Best risk free returns are with multiple current accounts and regular savers, some hassle to set up and manage but could probably near match inflation on half the amount.

    Best savings account paying around 1.2-1.3% which is much better than current situation but still losing out to inflation.

    Has she looked at h2b and Lisa, how is her pension provision?
    • Goodish33
    • By Goodish33 29th Nov 17, 9:41 PM
    • 6 Posts
    • 4 Thanks
    Goodish33
    • #6
    • 29th Nov 17, 9:41 PM
    • #6
    • 29th Nov 17, 9:41 PM
    What sort of investments would you look at?
    • Goodish33
    • By Goodish33 29th Nov 17, 9:42 PM
    • 6 Posts
    • 4 Thanks
    Goodish33
    • #7
    • 29th Nov 17, 9:42 PM
    • #7
    • 29th Nov 17, 9:42 PM
    Pension, I've no idea to be honest, I'll find out. I know she pays into an Italian pension (she's Italian), something she has to do apparently.

    I was looking at LISA and H2B. Trying to work out which is best and what the differences are.
    • Mnd
    • By Mnd 29th Nov 17, 10:08 PM
    • 253 Posts
    • 288 Thanks
    Mnd
    • #8
    • 29th Nov 17, 10:08 PM
    • #8
    • 29th Nov 17, 10:08 PM
    If the cash is to be used for a property in the next few years, not a pension as this will be tied up to aged 55 at leasr
    • Audaxer
    • By Audaxer 29th Nov 17, 10:16 PM
    • 628 Posts
    • 277 Thanks
    Audaxer
    • #9
    • 29th Nov 17, 10:16 PM
    • #9
    • 29th Nov 17, 10:16 PM
    What sort of investments would you look at?
    Originally posted by Goodish33
    If she is thinking of putting the money towards a house purchase in the next few years, then investments are too risky and she is better at looking at higher interest current/savings accounts. At present at 0.05% she is earning £50 interest per year, but if she split between a few of the higher interest accounts I think she could get at least 1.5% on the £100,000 which is £1,500 interest per year, so worth doing as soon as possible.
    • Goodish33
    • By Goodish33 29th Nov 17, 10:26 PM
    • 6 Posts
    • 4 Thanks
    Goodish33
    She's not from Britain and she doesn't understand the British banking system. She had never heard of an ISA until I mentioned it today. The reason I need anyone's advice is because £100,000 is an exceptional sum of money and will have different options and considerations to someone who has a few grand.

    Her own decisions so far have led her to keeping the money in an account that is paying her about £50 in interest per year.

    She will be making her own decisions. I'll just be helping her along. Perhaps I shouldn't bother and let her lose out on £1,000+ of interest minimum per year.

    I'll be helping to find the best deals for her but she'll be the one making the decisions of what to do. As I say, she isn't at all financially savvy from a banking system, what type of accounts there are point of view. It's very different in Italy to the UK. She asked me earlier if she would have to pay to close her current account.

    (Text removed by MSE Forum Team)
    Last edited by MSE ForumTeam5; 30-11-2017 at 9:02 AM.
    • Goodish33
    • By Goodish33 29th Nov 17, 10:30 PM
    • 6 Posts
    • 4 Thanks
    Goodish33
    If she is thinking of putting the money towards a house purchase in the next few years, then investments are too risky and she is better at looking at higher interest current/savings accounts. At present at 0.05% she is earning £50 interest per year, but if she split between a few of the higher interest accounts I think she could get at least 1.5% on the £100,000 which is £1,500 interest per year, so worth doing as soon as possible.
    Originally posted by Audaxer
    That's where I was going originally. Possibly with an ISA too. She's looking at buying something probably in two years but then in two years but not fixed on that.
    Last edited by Goodish33; 29-11-2017 at 10:53 PM.
    • firestone
    • By firestone 30th Nov 17, 12:15 AM
    • 31 Posts
    • 7 Thanks
    firestone
    Assume being Italian but with an account already that the following is ok but as mentioned by people in other threads challenger banks such as Atom & Paragon will give you around 1.75% for a year and the like's of Tesco & Ford money are competitive among others.Even Harrods bank offers 1.45% for a year if she wants to impress the folks back home!
    Many current accounts give a good rate on a small sum but also give you access to higher regular saver rates.
    While more risk & not suitable for everyone she could look at maybe 5 to 10% of the pot in what would be called low risk P2P (if there is such a thing) the likes of Ratesetter,Lending Works,Landbay or Octopus choice which can pay 3% - 5%
    • fryedslyce
    • By fryedslyce 30th Nov 17, 12:40 AM
    • 34 Posts
    • 72 Thanks
    fryedslyce
    Personally if you want safety of capital and a reasonable return I'd go for BLME's Sharia compliant account that gives 2% profit on a 1 year fix
    https://www.blme.com/products-and-services/savings/premier-deposit-account/

    Yes, it's not guaranteed, but they haven't ever failed to pay the predicted profit rate.
    • kidmugsy
    • By kidmugsy 30th Nov 17, 2:15 AM
    • 9,893 Posts
    • 6,670 Thanks
    kidmugsy
    Bung £50k into Premium Bonds and spread as much of the rest as poss among high interest current accounts and regular savers. A LISA would be good too.
    Free the dunston one next time too.
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