30k to invest

LJ1

in the not to distant future i expect to have about 30k to invest.
im a single mum - work part time - have 11 year old daughter.
money situation could be better - but for the time being we manage,
Im not looking at long term investing.
as I have pension in place for when i retire - i will get lump sum and monthly pension - currently around same as my wages.
was lucky enough to have done 20 years full time before i went part time.
In this climate i dare say you wont get much interst on 30k
But any interest i do get will be put towards some of my annual outgoings (even if it paid tv licence) thats one thing less to set aside for during the year.

I was at the bank the other day - and the guy said you need to split this into 3 things, one short term - one medium and one long term....seemed way to confussing for me.

If i was investing 30k today - what sort of advise would you guys as (money saving experts) offer me.

xrjtg

LJ1 wrote: »

Im not looking at long term investing.

This is the key thing, and means that you want to look at savings accounts, not investment products. If you go to a bank advisor they will try and sell you inappropriate investments.

The first place to look for taxpayers is a Cash ISA, which allows interest to be paid to you tax free on deposits of up to £5100 a year. The main site article lists the options. The best widely available instant access account pays 2.8% a year, but if you're prepared to tie £5100 of your money up for one or two years you could get 3% or 3.3% respectively.

After that you're looking for the highest paying savings account you can find. Again there's an article, which will tell you much the same is available as for Cash ISAs, except the fixed-rate deals pay more interest.

If you're happy with the minor complication, there's also an option to open three Lloyds Vantage current accounts, which pay 4% on balances between £5000 and £7000 provided you pay in £1000 a month, but this can be done by transferring money between the accounts.

If you just go for the best-paying instant access accounts then you could earn £700 in interest after tax in the first year.

opinions4u

When you first get the money, stick it in to a decent paying easy access savings account while you think about what to do with it.

www.natwest.com/savings has a 2.89% AER option or www.theaa.com/savings has a 2.8% option. It may be worth opening one of these now with £1 so that you have a home ready that will start giving you an immediate return.

LJ1 wrote: »

Im not looking at long term investing.

Any particular reason why not?

as I have pension in place for when i retire - i will get lump sum and monthly pension - currently around same as my wages. was lucky enough to have done 20 years full time before i went part time.

Are you happy that this will be enough to retire on? How far off retirement are you?

In this climate i dare say you wont get much interst on 30k

Nope, but you may as well get what you can.

But any interest i do get will be put towards some of my annual outgoings (even if it paid tv licence) thats one thing less to set aside for during the year.

While this is an option for you, and it's your call, do you really want your savings to subsidise your day to day spending? Personally I think it's a good idea to avoid this if you can. Because sooner or later the savings will run out (or their buying value will be reduced by inflation).

I was at the bank the other day - and the guy said you need to split this into 3 things, one short term - one medium and one long term....seemed way to confussing for me.

What are your short term needs? What are your needs likely to be in 5 years time? Where will you stand when you retire? It's a good thought process to go through. That said, don't take financial advice from a bank!

If i was investing 30k today - what sort of advise would you guys as (money saving experts) offer me.

Any answers you get will be guides as opposed to advice. We don't really know enough about you.

Although you say you don't want long term investments, I think you could still benefit from seeing an IFA. www.unbiased.co.uk will help you track one down. Holding a reasonable sum of money could impact on your benefits/tax credits position and there may still be gaps in your pension provision to consider. It may be that after an initial chat you walk away, but it may be an enlightening experience.

Here's some thoughts from me:

1. Set up a contingency fund of 3-6 months net income. Stick it in to an easy access account (e.g. those above or the 2.8% cash ISA at www.halifax.co.uk/savings) and forget about it. That's your future cushion for the unkind things that life does to you (e.g. job loss, illness etc).

2. Repay any high rate debts that you have. Consider reducing your mortgage debt. This will increase your disposable income.

3. Spend some. What's wearing out in the home? Is the 7 year old washing machine sounding more like a F1 car on the starting grid and racking up the water bill? Could a new car actually save you money on fuel consumption and servicing costs? Are you long overdue a nice holiday? I'm not advocating spending for the sake of it. But there may be a case for investing in some quality time with your daughter (she'll be a teen soon, so enjoy what you have now ) and investing in one or two outstanding major purchases. How about gifting a small amount to your daughter?

3. Consider the medium term. What bills are inevitable over the next 5 years or so? If you don't replace a car now, when will it be replaced and how will you pay for it? As kids get older their needs change and their schools offer more expensive holidays! While you may not be prepared to spend on every letter that comes home, once or twice over 5 years of secondary education may go down well! Do you want to travel? A cruise? If not now, set the money aside for later. Perhaps opening a separate account for this type of spending alongside your contingency fund would be a good idea.

4. Just because you have a promising looking pension fund, it doesn't mean it's guaranteed. There may be sense in topping things up. There may not be. But don't completely rule this out. A few thousand added now may allow you ti retire a little sooner.

My suggestions are fairly generic, I don't know you well enough for them to be specific. But do try to think short, medium and long term about this money. You'll appreciate it more if you do.

One final point. Review your savings accounts every 6-12 months. Providers will lure you in with decent rates and then reduce them. All the accounts I've provided links to diminish in value after a year!

D1zzy

If you do not want to tie up your money, you could open 3x LTSB Vantage accounts with 7K in each (there are lots of threads on here about it) - these are curent accounts with instant access paying 4%. If you haven't used your ISA allowance £5100 (and are a tax payer) you should find the best rate you can (better rates if you can tie up for a time) - interest on these is Tax free. Any left over at the mo I would put in Natwests new Esavings account AER 2.89%. Also instant access and you can also transfer the interest earned on your Vantage accounts here.
You can get better rates if you are prepared to tie some of it up for a period, but you do risk rates going up in the meantime.

- Edit 3 answers in the same time frame -at least we are all on the same hymn sheet

getzegold

if you hold cash in any bank account with a paltry 2 or 3 % return your savings are going to get destroyed through inflation. you need a minimum 4.75% just to retain the purchasing power of your cash and your not getting that anywhere. me I'd say if you want to invest that money and not just watch it get destroyed through inflation then consider at least putting some into oil company or commodity company shares or precious metals; gold or silver., natural gas or energy producers; Things that people need and will increase in value as population increases, as the east becomes wealthier and can compete for the resources we all use. Thats real investing, anyone can put a few quid in a bank account but dont ever think thats investing as its not. its merely a place to store ever depreciating currency.