advice on 170k saving

supersparky

Hi there we are a married couple in our late twenties and about to have our firstchild .we own our house and have no debt we have just sold our old house and got 170k to save .my wife has now left her job so we wanted the intrest on the money to pay her some sort of salary yearly /monthly.Ive heard about only having 50k in each account but hat would the best way to make the most of our money risk free . advice gratefully recieved

opinions4u

Okay, if you're not planning on buying a new house with your £170k at some stage in the next couple of years, I would certainly suggest seeing an IFA with that amount.

There are a number of tax effective ways they could maximise your money and a number of low risk options with which to do this.

If you simpy want the nearest you can get to no risk at all you are limiting yourself to a poor range of products from National Savings.

If you don't wish to pursue these options, you could spread the money around 4 accounts with different providers to ensure the best protection under the Financial Services Compensation Scheme. Assuming you get around 4% gross this should generate an income for your wife of around £6,800 ... she would have a small tax liability on this. If the money is in joint names and you're a taxpayer the tax liability will be higher.

Take a look at www.unbiased.co.uk and www.moneyfacts.co.uk.

what would the best way to make the most of our money risk free

Quantifying risk is a toughie.

National Savings - the nation could go bust and you lose
Bank - the bank could go bust and the FSCS could fail to pay out
Equities - they could fall in value

To generate an income many would suggest investing such an amount in blue chip utility companies. The underlying value of the holdings could fall or rise, but the dividends generated tend to be steady and in some cases higher than the returns on bank accounts.

For me, seeing an IFA who can properly assess your circumstances and aspirations and fully understand what needs you have short, medium and long term would be the best investment of your time and money. Exploiting a range of tax breaks that go well beyond the scope of a cash ISA!

supersparky

thanks for sparing your time some great ideas