Redundancy pay out

viv0147

I have a friend who as just been made redundant and he had a £12,000 payout, and as luck would have it he had a new job straight away. So can anyone please give him advice on where he can invest it, because he doesn't really need to use any of it for the foreseeable future. Thanks

Day_Trader

We don't dole advice on specifics but in general your friend should try and make the most of ISA allowances for the year (£7,200 maxi allowance per year) and then with the rest he could decide to do a variety of things - pension contributions, investing in stocks/shares or holding it as an emergency cash fund.

viv0147

Thank you very much for your advice.

VfM4meplse

Anything left over post ISA should be stored in anonymous envelopes under the mattress. The Ken Dodd apprach to finance may be the answer in these times of instability.

Hungerdunger

One thing Day Trader didn't mention was a fixed-rate savings account (usually called a "Bond" by the banks and Building Societies). He can still get 6% or over if he is able to tie the money up for a year or more, but I suspect these rates will drop gradually over the next few weeks/months so he needs to act quickly.

Also he should bear in mind that at least half of the ISA referred to above has to be invested in stocks and shares - he can only put £3,600 in cash savings, although he could put another £3,600 in on or after 6th April.

opinions4u

If he's prepared to manage his money, he should look at:

1) Cash ISA £3,600 - Halifax Fixed Rate 5.5%.
2) Bank of Scotland IASA Reward £6,400 for the rest fixed at 5.8%. This is an emergency fund that pays a good fixed rate.
3) Put the rest in a 6 month-12 month fixed rate account. Aim for 6%.

I'd guess he needs to move fast to get the fixed rates. Check out alternatives at www.moneysupermarket.com/savings and get a feel for the market.

Fixed rates suggested because the 1.5% BofE rate drop is yet to be reflected by a lot of banks.

At the end of a year, review his position. He may then consider seeing an IFA to look at pension provision, stocks and shares ISA etc, depending on his security of employment.

blackswan2

Can get 6% at Kent Reliance Building Society
http://www.krbs.co.uk/1yearfixedbond.aspx