What to do with £600,000 for a year

chilos

Looking to sell our London house, but not buy for another year. It's been let out for the past seven years and we've needed the rental income to pay rent on the place in Edinburgh where we currently live, to which we are committed for another year. The long and short of it is that we will probably have £600,000 after paying off the mortgage, so what's best to do with the money over such a short time, bearing in mind we'll probably need the interest paid monthly so we can continue to pay our rent?

greektony

put it on black

ctdctd

£5340 in an ISA, £15000 in NS&I index linked, the rest on Red

HTH

wriggly

A first cut at what I would do if this happened to my partner and me:
1. [60k] Each of us put £15,000 in NS&I indexed bonds and £15,000 in NS&I fixed bonds. No monthly interest, but tax-free and safe.
2. [10k] Each of us put £5,340 in a high-paying cash ISA. No monthly interest, but tax-free - http://www.moneysavingexpert.com/savings/best-cash-isa
3. [530k] Spread the remaining £530k between 4 high-monthly-interest joint savings accounts with no more than £170k under any one banking group - http://www.moneysavingexpert.com/savings/savings-accounts-best-interest (note especially the section Spreading cash for safety)

Number 3 should give you approximately £1000 per month (if you're basic rate taxpayers). If this covers your rent and any other expenses, you could consider locking some of the cash up in a 1-year fixed bond at a higher rate.

ed123_2

...to get the £85k compensation protection you would have to split into 7 accounts(for an individuel joint account £170k), unless you put it into ns&i which is 100% protected....I would look at one year fixed accounts which are shown on the comparison tables on this site.......ed

Dave101t

a millionaire on a MSE website, asking us for financial advise?

chilos

Semi-millionaire, perhaps, for a short time - though with three teenage kids, including one at university and another starting next year, and with £1600 outgoing rent to find each month, it doesn't much feel like it. Thanks for the advice, all. Already ISA'd up to the max, but the NS&I accounts are good idea, and £1,000 income a month would just about allow us to pay the bills.

Ark_Welder

If the house has been let out, i.e. it has not been your main residence, then CGT may be due on any gain

dave82_2

greektony wrote: »

put it on black

No no no red

Sceptic001

dave82 wrote: »

No no no red

The secret of good investing is diversification. So half on red, half on black. Gottit? :rotfl:

Seriously though, I agree with wriggly except I would give NS&I fixed rate certificates (2.25% AER) a miss.

chilos

Yes CGT is an issue, which is why we are selling now rather than keep it on another year.