need 5% p.a. return for 3 years

luckyme_2

My partner and I are taking a few years out next year and need to fund our travels from our money pot After the sale of our house we shoud have about 240k. 21k will be in cash isa's, as of now we don't have any equity isa's. We wish to remain domiciled in the uk for tax purposes. Our personal tax allowance will be (jointly) about 10k.

I would like to have an income of approx £200 per week which would be enough for our travels (we are veteran backpackers). Where is the best place for the remainder of our cash to get this income.

Thanks for your time,
luckyme:A

ManAtHome

You could stick £40k in an internet saving account (ING, Cahoot etc) to feed your current account for drawing cash. Should cover the 3 years and get 4-5% interest. Rest into a 3 year fixed-term account - this could replenish most of the spends.

Depends on your view of interest rates whether to go for a log-term fix or log in every few months and move cash around (although you'd need to open a few potential accounts before you go).

You may wish to bug extra into your 'spends pot' to top up your ISAs in the next few years - just need to make sure you can top up over the web.

Final tip - be wary when accessing your on-line accounts...

Hope you have a great time (jammy b*****)...

muddyfox470

How about this new Coventry Building Society Account, that has a current account and savings account and pays 5.1% i do believe you can put upto 250k into it.

However you need to pay in £1000 each month.

More info: http://www.coventrybuildingsociety.co.uk/CoventryFirst/home.aspx

However the one thing is that it is very unlikely the rate will stay at 5% for the 3 years you want it.

Cheers

Ian

PS. Enjoy your travelling

PBA

Look for a wealth management service like Abbey's Inscape. They'll look after your money and make sure you get the income you need, but without restricting it to a maximum of 5% growth a year.

cheerfulcat

PBA wrote:

Look for a wealth management service like Abbey's Inscape. They'll look after your money and make sure you get the income you need, but without restricting it to a maximum of 5% growth a year.

No, I'm sorry, this is terrible advice. " Wealth management" services are there solely to make money for the provider.

luckyme, have a look at the best buy tables at moneysupermarket.com. Leeds building society has a three year fixed rate "bond" at 5.05%. I don't think that you should consider anything more complicated than cash deposit accounts while you are travelling.

Enjoy yourselves:beer:

Cheerfulcat

moneysavingobsessive

I agree that cash accounts would be most suitable. However, you could also use some regular savings accounts too, for example the 10% Alliance and Leicester (with their 5% current a/c only) and the 7% Halifax account. This would help you boost your return. If taken as a joint account for example, you would be able to save 500pcm. This is a total of £6k a year, with an effective rate of 7.5% before tax (average of 5% current a/c and 10% regular saver). A useful little boost. TBA, the A&L current a/c only pays 5% up to a certain limit, but there is the added advantage of a 0% overdraft for a year if needed.

luckyme_2

Many thanks for your replies,
We already have A&L internet, 10% saver plus Halifax 7% accounts thanks to m.s.e.. I think a mixture of Leeds and Heritable bank 2,3 & 4 year bonds paying monthy & anually would be my best bet. These woud feed the internet accounts which in turn will feed our nationwide debit card which I've found to be much the best way to get cash overseas.

We may gamble with some equity isa's to help avoid our income going over the personal tax allowance limits though we want try to keep the paperwork to a minimum.

If anyone has any further thoughts on this or can see flaws in my thinking please comment further.

People who wish to use internet banking abroad may find the bottom of this page useful http://adrianwarren.com/faq/ontheroad.shtml
thanks again,
luckyme :A