Where to put my money now that £ is tanking?

funkey_monkey

Hi,

I've got the following and am wondering what I shoudl do with it as interest rates are falling through the floor:

Sainsburys: £30k
Northern Bank: £30k
NS&I ISA: £30k
NS&I Index linked Cert: £15k

What should I do with this money to avoid losses due to the pound tanking? Most of this cash is an inheritance I got to purchase a property and I really want to keep it safe.
I had a scare with Icesave and I don't want to go through something similar again. Any advice would be greatfully appreciated.

Many thanks.

gozomark

what money have you lost "due to the pound tanking" ? Are you planning on buying a property in the UK ?

funkey_monkey

I am planning on purchasing a property in the near future. By losses I should have probably re-worded to state that my return on capital has been eroded massively.

Plus with IR so low and inflation running high that is in effect loss.

gozomark

general price inflation will be negative over the next 12 months..... property inflation will be massively negative, so you are not losing out :-)

dunstonh

By losses I should have probably re-worded to state that my return on capital has been eroded massively.

In what way?

Do you have exposure to overseas assets or liabilities? Do you live overseas?

gozomark

its says "return on capital" not "capital" has been eroded, which is true, given lower interest rates

dunstonh

You are correct, I misread it. However, the real rate of return hasnt changed much at all.

amv0

gozomark wrote: »

general price inflation will be negative over the next 12 months..... property inflation will be massively negative, so you are not losing out :-)

So we're not losing out. Leaving property inflation aside, can we have some everyday-life practical examples of how the negative general price inflation, as forecasted, will affect people? Will the actual money coming out of our wallets for the same things be less?

Will my Council Tax bill reduce?
Will my electricity, water, telephone and internet bills reduce?
Food, groceries, home essentials? About half of my supermarket bill items are imported. How will the weakening of the pound affect that?
Cheaper train or bus tickets?
Children upbringing costs? Insurance premiums? The TV Licence?

I hope I'm proven wrong but the most probable answer is a big fat NOPE.
(Well, electricity has a chance; that is when the companies decide that a 70% reduction of the price of oil should maybe, sometime find it's way to the consumer).

If negative general price inflation is a phrase that's supposed to ease my mind for my tanking savings income, it isn't.
This negative price inflation seems to exist only in government's finance books.

gozomark

main reasons for inflation going (marginally) negative

VAT reduction will reduce overall prices by 0.5-1%
utilities and petrol
food
general squeeze on profit margins

there has been a massive decline in commodity prices, including food, since the Summer, not just in oil
http://www.bloomberg.com/markets/commodities/cfutures.html
the chart is in $, so less of a decline in £ terms, but in $, commodity prices have halved in the last 6 months

Happychappy

amv0 wrote: »

So we're not losing out. Leaving property inflation aside, can we have some everyday-life practical examples of how the negative general price inflation, as forecasted, will affect people? Will the actual money coming out of our wallets for the same things be less?

Will my Council Tax bill reduce?
Will my electricity, water, telephone and internet bills reduce?
Food, groceries, home essentials? About half of my supermarket bill items are imported. How will the weakening of the pound affect that?
Cheaper train or bus tickets?
Children upbringing costs? Insurance premiums? The TV Licence?

I hope I'm proven wrong but the most probable answer is a big fat NOPE.
(Well, electricity has a chance; that is when the companies decide that a 70% reduction of the price of oil should maybe, sometime find it's way to the consumer).

If negative general price inflation is a phrase that's supposed to ease my mind for my tanking savings income, it isn't.
This negative price inflation seems to exist only in government's finance books.

Amv

I bet your really glad you came on this forum to ask for simple advice and received nothing back :rolleyes: a simple question asking how to try and gain the maximum income from interest on your investments.

I also have quite a number of fixed rate bonds set up early to middle 2008 for 12month and 24 months at interest rates of 7.00% to 7.20% with ICICI, First Save, Close Bros, AA, West Brom, Nottingham BS etc etc, the interest this year will be just over £20k, when these mature.

The interest the following year if I reinvested in fixed rate bonds would be only around 30% ? or so. There is no other investment I would feel comfortable with other than this type. So if you do find the holy grail of investment ? let me know

gozomark

Happychappy wrote: »

Amv

I bet your really glad you came on this forum to ask for simple advice and received nothing back :rolleyes: a simple question asking how to try and gain the maximum income from interest on your investments.

I also have quite a number of fixed rate bonds set up early to middle 2008 for 12month and 24 months at interest rates of 7.00% to 7.20% with ICICI, First Save, Close Bros, AA, West Brom, Nottingham BS etc etc, the interest this year will be just over £20k, when these mature.

The interest the following year if I reinvested in fixed rate bonds would be only around 30% ? or so. There is no other investment I would feel comfortable with other than this type. So if you do find the holy grail of investment ? let me know

it wasn't clear the OP wanted simple advice..... a heading of "Where to put my money now that £ is tanking? " implied the OP was considering putting his money in another currency, or is looking for some other protection against a weak £, and was possibly looking to buy a property overseas.