Already have ISA -so where to save/invest?

angelicmandy

My OH has a lump sum of around 25k/30k which is currently in a normal current account. He is unsure of the best thing to do with it. He already has a cash ISA and has invsested his maximum for this year. We have no mortgage and are both under 40 (just!)

If poss he wouldnt like to tie the money up for too long. I have thought of maybe National Savings certificates- would that be a good option?

Kohoutek

angelicmandy wrote: »

If poss he wouldnt like to tie the money up for too long. I have thought of maybe National Savings certificates- would that be a good option?

None of the tax free certificates (index linked or fixed interest) are currently on sale.

You could start by investing £5,100 of your OH's money into a cash ISA in your name (assuming you haven't subscribed this year).

Loughton_Monkey

First of all you must decide between Savings or Investment. They are two different things, and you are between the devil and the deep blue sea (like all of us).

1. Savings: The underlying cash is totally safe, but currently you will receive interest at a rate lower than inflation. It gradually loses 'real' value.

2. Investments: Underlying cash is not safe, but history shows that over a long period (5 years min, but realistically 10 years) will generally do well and bet inflation.

Both types have tax-free options. Cash ISA for one, and S&S ISA/Pensions for the other.

You can (and maybe should?) go for a mixture. But either way, drip feed it into a tax free environment as limits allow.

Jake'sGran

He can invest another £5k in the stock market but needs to do a bit of research first. I was checking my portfolio today and, at the moment, none of my fund investments have lost money and some have gained 25-50%.

In ordinary savings accounts and some cash ISAs it is possible to get 3% interest. You can have instant access with some and with others the the term is fixed. I have just been looking for ISAs paying the best rates (you can check these in the section at the top of this page marked Banking/Saving) or use a comparison site like Compare the Market.

It is wasteful to have a large sum in a current account when it could be earning interest.

angelicmandy

I do already have an ISA so he would be able to put £5,100 in it after the new tax year starts.

We wouldnt know where to start with the stock market. I know a financial adviser who helped us with our mortgage when we first bought our house. Im not sure whether to use him. I knew him through work so im not sure if we would need to pay him or whether he sorted the mortgage for free as a favour as a work contact. Do IFAs always get paid by the bank/bsoc they put you onto. (Bear with me im not very "up" on these things!:)

King_Weasel

You can get 8% on a First Direct regular saving account, but that would only absorb £3600 each and you would need to open their current a/c (for which you would also get £100, I believe).

And you can get 4% with Lloyds Vantage a/cs - up to £21,000 each. You don't need any other Lloyds a/cs, but there are conditions.

As these aren't ISAs you would only get about 6.4%/3.2% net if you are std rate taxpayers. Worth considering if you are saving not investing.

soulsaver

angelicmandy wrote: »

I do already have an ISA so he would be able to put £5,100 in it after the new tax year starts.

Cash ISA allowance is £5340 in the 'new tax year' 2011/12