What should we do with the released equity?

ja5599

Hello,
Selling our house and moving in to rented (out of area, so playing it safe).

Not sure what we should do with the cash we release from the sale. Obviously, wnat it safe, semi-accessible, and don't want to pay any tax if at all possible...

Has anyone been through this and got any free advice for us? We would be very grateful

Thanks all

J

xrjtg

There's no tax to pay on the money from the house sale if you were living in it as your main residence. There will be tax to pay on any interest earned from putting it in a savings account unless you aren't using your personal allowance, or the money is in an ISA.

If you need it accessible for a possible house purchase, start with the normal and ISA savings accounts articles on the main site.

Cautious_Investor_3

How long are you prepared to lock it away for?

How do you define semi accessible?

ja5599

Thanks for the responses.

We want to buy again, but nothing suitable on the market at the minute. This may change any time, but not likely pre-Christmas perhaps.

3-6 months would be the lock in I would be happy with.

THanks
J

Loughton_Monkey

Sadly, notice accounts are pretty much no better than instant access these days. You can get 2.8% with AA (no notice required). Stroud & Swindon will pay 2.9% on 90 day notice, but that's probably not worth all the hassle (not available online).

Yes, if you are definitely not going to put in any more money into Cash ISA's this year, then you might as well 'max them out' to get at least up to £10,200 tax free between you.

But I always consider using a cash ISA in this way a little bit marginal. If you put £5,100 into a cash ISA, the interest in a whole year is £142.80 best. This is £28.56 better than ordinary savings, but for 3 months, we are talking about £7! Big deal! On the other hand, each £5,100 left in for 10 years, produces an extra £357 compared to non-ISA (assuming current interest rates and 20% tax).