Advice from all you experts please!

dad_researcher

Hi,
I have been asked by my Dad, (who has recently sold his house and moved in with my sis) to research the best way to invest an approx. £80,000 that he has. He doesnt mind tying some of it up but wants to keep some with instant access. Someone has advised me the easiest way is to check out all the info on this site. But as a busy working Mum and a total savings novice it all looks a bit daunting to me! Any straightforward advice from you regulars would be much appreciated! :

cheerfulcat

Hi, there,

It would be easier to help if it was clearer what your Dad wants from this money. Does he require an income? Or is he happy just to invest for capital growth? Perhaps a mixture of the two? Does he already have other savings? A pension? ISAs?

More details, please :-)

Cheerfulcat

dad_researcher

Hi Cheerfulcat,

Thanks for replying! I guess he would probably want an income mainly although he will probably not use all of it. He is retired by the way. He doesnt have ISA and I know the first thing to do would be to get one. As he wont need to touch the mony I am assuming one of the notice ones would pay better interest?

This is what I have worked out so far but I am not sure exactly what products to pick.

1. £3,000 in a high interest ISA with another £3,000 to be added in April.

2. £20,00 in an instant access savings account with two drip feed debits paying into the Halifax and Abbey high interest savings account (not sure if it was the Abbey)

3. £5,000 also in an instant access acount for emergencies.

4. The rest in the best paying notice account.

He doesnt want to take any risks whatsoever and is very dubious about using any banks or building societies he hasnt heard of. Any further advice would be very welcome, after sifting through all the, although excellent, info on here my brain hurts!

Rafter

If he wants low risk and wants to keep his tax bill down, and is happy to tie the money up a bit, it is probably worth looking at national savings too.

With savings certificates you can get a reasonable tax free return.

With that much to invest it might also be worth considering premium bonds. Although the return is not guaranteed the capital is safe.

Good luck.

R.

cheerfulcat

Hi,

Well, you seem to have covered the basics yourself :-) ! I can only add that he might also consider a term account or " bond " as the banks like to call it. Top rates are 5.3% ish and he can choose to take the interest as a monthly income or roll it up within the account ( depending on the provider ).

A really good place to look for accounts and cut through some of the confusion is moneysupermarket. The site lets you look for accounts which fit your specific criteria ( branch access, no notice, monthly option etc.) Here's a link to the home page -

http://www.moneysupermarket.com/

And here's one I prepared earlier :-), for term accounts. Bear in mind that some of them pay better interest on larger amounts; I used £30,000 as the amount to be invested to come up with these results.

http://www.moneysupermarket.com/Savings/SavingsResults.asp

If your father is not a taxpayer, and as long as the interest does not take him over the threshold, he can apply to have the interest paid gross.


HTH

Cheerfulcat

cloud_dog

If he wants low risk and wants to keep his tax bill down,  and is happy to tie the money up a bit,  it is probably worth looking at national savings too.

With savings certificates you can get a reasonable tax free return.

R.

There seems to be a bit of mis-conception about Nation Savings products being tax free.

This is not correct.

These savings vehicles pay the interest gross (not the same as 'free'). Normally the interest amount is added to your PAYE income total and you therefore pay tax out of your earnings. Alternatively the IR will catch up with you and get you to complete a SA decalring this untaxed income.

cloud_dog

cheerfulcat

Hi, cloud_dog,

Yes, some products are just paid gross but NS&I Savings Certificates are tax-free; look -

http://www.nsandi.com/products/ilsc/index.jsp?section=overview

Cheerfulcat

cloud_dog

I stand corrected :-[

cloud_dog

Shinds

Wack it all in a High Interest savings account.

This is the easiest and safest way to get a nice return on it and have instant access

U want to look at:

Egg Savings

Bradford & Bingley e-Savings

ING

dad_researcher

Wow! Thanks so much to all of you who bothered to reply to me! Just one thing I want to clear up. As some of you have stated, some interest is paid net after tax has been taken, others are paid before tax. I realise this will all have to be declared for tax purposes, but if you declare a net amount will the IR take the tax again? If so, would if be better to have the interest paid gross then declare it? Sorry to sound so ignorant, its just that I have never had any money to play with (far too fond of shopping I am afraid!)

cheerfulcat

Hi,

If the interest has been paid net of tax and your Dad is a basic rate taxpayer then there is no further tax to pay. You do have to declare it, of course. Make sure that the bank or building society gives him a Section 352 certificate, which is a statement of interest paid and tax deducted, issued at the end of the tax year ( once you have asked for one of these they should issue it every year ).

HTH

Cheerfulcat