25,000 to invest ????

ipri

I will get 25k next month from 12 yr policy....I also have £150 per month to use now the policy is finished....dont want to go into stock market and can leave to grow ....any ideas?? Thanks Ian

deemy2004

Use up your cash isa allowances this and next tax year so £6k

Feed monthies i.e. abbey and halifax @ rate of £750 per month, i.e. use an savings account such as halifax websaver as a feeder via the current account.

Pop a couple of K into premium bonds.

The rest into a fixed bond say nottignham 2 year fix 5.5%

dunstonh

also include unit trusts, OEICS, ISA, Stakeholder pension, bonds as options to consider.

Walletwatch

Feed monthies i.e. abbey and halifax @ rate of £750 per month, i.e. use an savings account such as halifax websaver as a feeder via the current account.

If you're married, you can open one each for you and your partner - a Regular saver at Halifax and Abbey @750*2 = 1500 per month.

deemy2004

If your partners not working then also look at the derbyshire 5.85% monthly at £1k per month.

ipri

Thanks to all......I dont understand the "Drip feed" Idea of saving?? Ian

Walletwatch

As your regular savings accounts have a limit on the amount you can put in monthly, you cannot earn the high interest rate of 7% gross that they offer right from Day1. So the idea is to park the money in a high interest paying Savings account like egg, cahoot, etc - which pay around 5% interest and channelise money from here into these Regular savings accounts on a monthly basis. This ensures that you get maximum mileage for your money - by 'drip-feed'ing from the Savings accounts into the Regular Savings accounts

siamese1

Apart from the suggestions already made, another thing you could do - depending on your age - is to take out a 25k M.I.P ( endowment) as long as it is for 5 yrs or more , its tax free- you could then use that money from that as your tax free lump sum ( pension) - instead of taking lump sum from your actual pension- this would then give you a better monthly pension on retirement - if you are some years away from retiring - you could re-invest the lump sum from the first M.I.P to take out a second that would coincide with your retirement. The way pensions have gone recently the more you can do to increase your monthly pension the better - Good luck

dunstonh

To clarify siamese1's post.

It needs to be 7.5 years to be tax free but if you don't go the 10 year distance, the penalties may wipe out any benefit. Main point of interest with these plans are higher rate taxpayers.

Personally, I would want to do some calculations to see what you are suggesting stacks up as of the top of my head, I dont think it would.

A higher rate tax payer would achieve 40% tax relief on pension contributions (possibly attract more via tax credits if in receipt of those too). Therefore contributing into pension funds which are more tax efficient than life funds and usually lower in charges plus gaining tax relief on the contributions would increase the overall fund value and make the 25% tax free lump sum worth taking instead of using a MIP.

A basic rate tax payer would have better alternatives than a MIP so that isnt worth calculating.

To clarify an earlier point as some-one did PM me to disagree about my mention of Unit Trusts/OEICS and pensions as an option. You can invest in ISAs, Unit trusts, OEICS and pensions without having any stockmarket link at all. Commercial property, corporate bonds, fixed interest, gilts are all available within those products.