Where to put my money now that £ is tanking?

tradetime

gozomark wrote: »

well you say you want to keep it safe - in that case you shouldn't be considering foreign currency, precious metals or corporate bonds, as all of these mean moving into riskier assets than £ bank deposits, especially as you are "planning on purchasing a property in the near future"

I'd have to agree with this, all of these options represent significant risk, if you take the two most obvious currencies the USD, has moved a long way against the £. Ben Bernanke (Fed Reserve bank chairman) is widely quoted as being supportive of a weak dollar in the current environment, and the dollar's rally is widely believed to have been a temporary phenomenon produced by the widespread deleveraging, a view I agree with. As such the risk is for dollar weakness imho.
The Euro likewise has moved a long way against the pound, and whilst the ECB is much more likely to be supportive of their currency by way of less aggressive interest rate cuts, I believe their stance could lead to a much more prolonged and deeper recession, if that turns out to be the case then the Euro risk would be to the downside a few months ahead, but that's just my view.
Gold has been strong recently, and to be honest caught me out, so I missed that boat too. I expected gold weakness on central bank selling to raise money for bailouts etc. I still think this is likely, which makes gold for me even more of a risk going forwards

If as you say you are saving for a house in the "near future" then my advice, if you can be sure you will not need this money for anything else, and you can put a rough idea of time on your house purchase would be to tie in the best fixed rate account deal you can find. Inflation is currently falling, as are house prices, so relative to the very thing you want to buy your cash is appreciating. This way you have no risk and your cash is available more or less when you need it. Just don't exceed the FSCS level of £50k, although they have honored amounts above that so far I would not take the chance on it continuing.

gozomark

I agree with tradetime's views on the asset classes, but even if I didn't, I would still suggest you stay with £ bank accounts - do you really want to put your house purchase at risk by making an investment that loses you money ?

funkey_monkey

No I have no intention of risking the cash. However, everyone seems to be an expert on investments now and there does seem to be lots of conflicting advice out there - it's tough to wade through it.
If I thought there was something better than Sterling bank accounts then I would consider them but as has been stated the boat has sailed on PM & FC there is little else to consider. It's just a matter of which bank to consider.

Out of interest what do you guys consider of the AIB? They have got a good 1yr bond @ 5%: http://www.angloirishbank.co.uk/Personal_Savings/Fixed_Rate_Bond/
but I am concerned about their stability as they are not covered by FSCS but instead by the Irish Gov. Can they be relied upon and indeed at they able to fund a bailout of this bank?
Also, the Irish Gov pledge expires in 09/2010 so if I open a 1 yr fixed bond now and the bank gets into difficulties late next year the I could be in trouble.

An alternative could be http://www.investechigh5.co.uk/ but I've never heard of this bank. Has anyone on here heard of them?

gozomark

I have no intention of risking the cash
but
If I thought there was something better than Sterling bank accounts then I would consider them
do you want to risk your cash or not ?

I'm sorry to keep going on, but unless we know what you want, its difficult to advise you

funkey_monkey

Err... AIB shares have plummeted recently and Investec doesn't have great ratings: http://www.investec.com/GroupLinks/InvestorRelations/CreditRatings

Is there anywhere out there thats safe?

funkey_monkey

gozomark wrote: »

I have no intention of risking the cash
but
If I thought there was something better than Sterling bank accounts then I would consider them
do you want to risk your cash or not ?

I'm sorry to keep going on, but unless we know what you want, its difficult to advise you

I would have thought that someone who seems as smart as yourself would realise that I am talking about an alternative to £ bank accounts with lower or similar level of risk.

gozomark

nothing is 100% safe but Northern Rock and National Savings are as safe as you will get in £, as both backed by UK Govt

gozomark

funkey_monkey wrote: »

I would have thought that someone who seems as smart as yourself would realise that I am talking about an alternative to £ bank accounts with lower or similar level of risk.

no, someone who seems as smart as me asks questions to find out what is wanted, rather than assume - better doesn't have to mean safer, it could mean riskier, but a level of risk that is more than compensated for the higher return

dunstonh

I dont actually know what you want funkey monkey. It isnt clear from your posts if you want currency risk or not or want to use deposits in other currencies or not.

tradetime

Ok, from the way you are speaking you want safe, you like the idea of making more returns from say currency, or gold, but you realize that attaches significant risk, and the bottom line I feel is you really want safety. So as suggested I would go for fixed rate deposit, understand that any bank in any country could fail, a bank is only solvent as long as confidence does not desert it, so given that, all you really need to worry about, is it fully covered by FSCS? I got caught in the Icesave debacle, and feel I was lucky how it turned out, and have to acknowledge the government on that one, the passport scheme was quite clear. So I would avoid any bank that is not fully FSCS covered other than that trying to work out who may get in trouble or not is purely guesswork.
So there is ICICI http://forums.moneysavingexpert.com/showthread.html?t=1368049
There have been questions about its stability, but it is fully FSCS covered, just stay under the £50k, allow for a bit of interest and you're good.