£25K to invest for school fees

tidyfinance

tomstickland wrote:

No, take out an ISA straight away at 5%, and then take out another one in April.
Meanwhile open a 10% reg saver and maybe a 7.5% reg saver and move the max money possible into each of these per month.
If you move £250 per month from a 5% paying account into a 10% paying account then the overally effective interest rate on the £3K is around 7.5%. ie: the average of the two rates.

When you say take out another one in April, do you mean open up another ISA in April?
Am I allowed to do this? If I CAN open up another one, then my wife would do the same! This would give us £12K in 2 ISA's come April - wouldn't it?
2 O'clock in the morning talking finance!!I need a coffee. I'll check for replies in the morning.

Thankyou very much.

tomstickland

That's the idea.
I need to read up the ISA details; I've got a mini cash ISA so that I can also open an investment ISA. I don't know what the situation is if you want to put all your ISA allowance into savings.

tidyfinance

Any more news on your reading-up on ISA's Tom?

knuckledragger

tidyfinance,
have a look at moneysupermarket for a good isa comparison tool.
http://www.moneysupermarket.com/isa/IsasResults.asp

tomstickland

tidyfinance wrote:

Any more news on your reading-up on ISA's Tom?

No, I'll go and do some reading now!
Ok, here it is, courtesy of some dodgy site called "moneysavingexpert".

Your annual limit is £7K, up to £3K in cash and up to £4K in investments.
You can have a Maxi Isa or 2 Mini Isas (1 cash, 1 shares).

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1045408312,40680,

What's all this Mini and Maxi stuff?


Unfortunately the ISA rules are unnecessarily complicated and each year anyone opening an ISA must pick whether to go for one of two types of ISA container, either mini or a maxi

To MAXIMISE your share based investments go for a MAXI ISA

A Maxi is a suitcase type container as everything has be bundled together and bought from just one provider. You can have up to £3000 in cash and whatever you don't use up in shares.



So you could have up to the full £7,000 in share type investments. Usually maxi ISAs will therefore be bought from investment companies who pay relatively poor cash returns, so maxi's are best used for share investment.

For the best CASH returns MINIMISE your share based investments with a MINI ISA

If Maxis are suitcases. Minis are more like two handbags. Each can be bought from a different company and must carry something different. The limits here are £3,000 in the cash bag and up to £4,000 in the shares bag.

It's very important to note the rules strictly prevent the opening of a mini and maxi ISA in the same tax year. Do this and you are potentially invalidation any tax gains.



Therefore think before opening any ISA, even if you open a mini-cash ISA with just a pound at the start of the tax year, there's no going back that year, you're on the mini route. And if you later decided you wanted to invest the maximum £7,000 in shares that year, you'd find £4,000 of your shares allocation had gone.

tidyfinance

tomstrickland,
because of my long-winded questioning I have taken the liberty of mailing you personally. Hope you don't mind. Please read, and if you get time reply.
I'd like to get this issue sorted tomorrow (today!) or Wednesday, so need to get my head around it PDQ.
Thanks.

cheggers

tidyfinance wrote:

Hi, I have just remortgaged to raise £25K for my son's school fees.
I now have a cheque waiting to be housed in the best rate account I can find. My criteria obviously has to be that I need to make 3 withdrawals per year (£2345/withdrawal).
Anyone know of the best account in which to house this money that will give me a good rate of return please?

Madness, you should not be re-mortgaging the house to pay for private school fees. You obviously can not afford it. Don't forget its not just the fees you need, you'll need the money for the school trips abroad, you'll need a new Range Rover for the Mrs to keep up with all the other posh folk on the school run.

A re-mortage is for doing a house up or buying a car, not to send the kids to private school.

You could spend £25K on his education and he could still end up with no qualifications, the only winner is your mortgage company.

tidyfinance

I really don't agree.
The house is as big and 'done up' as much as we want. Re-mortgage for a new car!!! my god, who wants to pay for a car over an incredibly long period of time. I bet you'd advocate re-mortgaging for a holiday as well.
As for him leaving school with no qualifications - yeah right. You can't tell me that we don't know how our kids are going to turn out by the time they are 11.
He was really keen to get the best education and smaller class sizes so that he can reach his maximum potential. He is the kind of lad that would have done well where ever he went but private takes him to the next level - I would hope!
Re-mortgaging was the only way we could afford to let him go. We've just altered our lender as well so the increase in mortgage for the addition for fees is damn near outweighed by the savings were making in changing lender to a cheaper, 5 year fixed. It's sorted, and we really won't feel much difference. Hey, it works for us, don't knock it!

cheggers

tidyfinance wrote:

I really don't agree.
The house is as big and 'done up' as much as we want. Re-mortgage for a new car!!! my god, who wants to pay for a car over an incredibly long period of time. I bet you'd advocate re-mortgaging for a holiday as well.
As for him leaving school with no qualifications - yeah right. You can't tell me that we don't know how our kids are going to turn out by the time they are 11.
He was really keen to get the best education and smaller class sizes so that he can reach his maximum potential. He is the kind of lad that would have done well where ever he went but private takes him to the next level - I would hope!
Re-mortgaging was the only way we could afford to let him go. We've just altered our lender as well so the increase in mortgage for the addition for fees is damn near outweighed by the savings were making in changing lender to a cheaper, 5 year fixed. It's sorted, and we really won't feel much difference. Hey, it works for us, don't knock it!

Go for it mate, Your'e going to change your son's personallity sending him to a private school I am sure he'll than you in the end

The class system at Private Schools is on another level, if you can not afford to send your kid without a re-mortgage sounds to me like your living a pipe dream. The other kids and parents will know your not that well off, this will lead to bullying and snide remarks I bet.

tomstickland

That's his choice and this is the investment part of the forum and he's asking for investment advice, not lifestyle advice.

I do wonder whether an offset mortgage would be a more efficient way of doing this though?

BTW I went to a private school, paid for by my not well off parents who scrimped and saved for years to afford it. They don't own a rangerover and noone ever made any snide remarks to me about lack of wealth.