Monthly Income

stechr

I am looking for pointers as to how best to make my cash work with a view to semi-retirement so looking for monthly income.
I have £125k mortgage which is on lifetime tracker @ base+0.49%
Various ISA’s which I assume would be best left alone.
I have 2 x Investec High 5 accts in mine and my wife’s name with £40k in each and a further £250k in various saving accounts (in my wife’s name as I am high rate tax payer).
I am overpaying my mortgage each month which is reducing the balance by about £600 per month but assume as I have such a good rate it may not be worth using any savings cash to reduce it further?
I have been thinking about moving some of the £250 savings into NS&I but not sure which would be best.
Any help would be appreciated.

Lokolo_2

stechr wrote: »

Various ISA’s which I assume would be best left alone.[/SIZE]

This is not true, you must always check the rates you are earning on your ISA's, otherwise it is possible that the bonus period has ended and you could be earning a measely 0.1% rate for example. If that is the case, then you can easily transfer your existing ISA's to another provider that offers a better rate.

As for the NS&I, I wouldn't recommend it as many people have mentioned it only pays the difference in RPI+1% so the income isnt very stable.

If you are comfortable with it, put the spare money into a fixed term bond to get the best rate, as at the moment it looks unlikely that rates will rise, although nobody knows.

You could also consider a regular savings account if you don't have much spare to save, most of them pay interest monthly and rates aren't too bad e.g. Barclays 3.25% AER.

dunstonh

How long are you for the income to be provided?

stechr

I have already moved older ISA's to higher paying ones and review each year.
I currently have £2k surplus each month after I have paid the max £250 into regular savings account.(sorry forgot to mention that)
If I worked less (I am self-employed) I would of course not have so much surplus each month but at present my savings are increasing by approx £2k per month and mortgage owing reducing by approx £600 per month
Thanks

stechr

dunston, I am nearly 50 and just wanting to work less hours and use savings and investments to provide a top up to my income.
Is this what you mean?
Thanks

Lokolo_2

From what you have said, if you really need the monthly income to topup your income, then you may need to open several regular saver accounts, as it is difficult to find instant access accounts let alone fixed rate bonds that pay monthly.

Well done though it sounds like you have covered most of the bases already :j:T

Andystriker

aaronmanz wrote: »

as it is difficult to find instant access accounts let alone fixed rate bonds that pay monthly.

Nearly all fixed rate bonds pay income monthly. To get decent rates though you need to tie up your money with them for 3 or more years.

dunstonh

stechr wrote: »

dunston, I am nearly 50 and just wanting to work less hours and use savings and investments to provide a top up to my income.
Is this what you mean?
Thanks

The issue is really to see how long you are going to have to rely on the capital to provide your income. i.e. is it just for x number of years or rest of live potentially.

You mention you are self employed. So, that means you will get less state pension than an employed person when that kicks in at age 66. Do you have other pension provision to boost that?

If you are looking at long term income provision then you really need to consider investments and not just deposits. With income there is no risk free option. Cash doesnt have investment risk but it will suffer inflation and shortfall risk. Effectively, with cash you are guaranteeing real terms loss of value.

stechr

Any pointers on Fixed Rate Bonds? Sorry not very experienced on these.
I have private pension with I guess about £100k in it.
I am still intending to be earning but feel that the cash I have at present isn't working hard enough.
What is the views on the investec High5 as I know it is now closed but still running for existing clients. Am I right in thinking it is a pretty good option for now and into the forseeable future?
thanks again for all your assistance
Thanks

Lokolo_2

stechr wrote: »

Any pointers on Fixed Rate Bonds? Sorry not very experienced on these.
I have private pension with I guess about £100k in it.
I am still intending to be earning but feel that the cash I have at present isn't working hard enough.
What is the views on the investec High5 as I know it is now closed but still running for existing clients. Am I right in thinking it is a pretty good option for now and into the forseeable future?
thanks again for all your assistance
Thanks

Yes the High5 is a good account if you don't want the hassle of having to keep moving your money around, as it takes an average of the top 5 paying saving accounts and pays you that average % as interest rate.

Disadvantages are that theres a minimum deposit and also you need to give 3 months notice to withdraw.

As for fixed rate bonds, have a look on Moneysupermarket or any other comparisson site and you can find the top deals, some will pay over 4% for 3 years+ so it depends what you prefer :j

dunstonh

Any pointers on Fixed Rate Bonds? Sorry not very experienced on these.

Fine to give you a guaranteed return but your capital is obviously going to go down in value in real terms, as will the income they pay.

You seem to be focusing only on cash deposits. Is that because you dont mind the loss in real terms (i.e. £250k will have the spending power of around £162k in 10 years time) or have you not yet factored in that risk?