Head spinning re what to do with £40K

ceejayblue

I recently got my inheritance through - around £70K. I topped up my 2011/12 ING ISA and put £15k into NS&I 5 year bond. Then I've transferred £40K to my Nationwide current account (previously only used as a holiday account) - ready to move to other savings accounts and £10K to my First Direct current account so that I can live on this (I've now retired and only have a very small pension to live on!) for the next few months. I officially retire in 2013 when I get the government pension.

I am thinking of opening a Post Office 3 year bond with £15K and putting another £15K into an ING account that I have. I also have £26500 in an ISA with Nationwide.

I have been looking at recommendations and websites until my head is spinning - must've changed my mind at least 5 times this week as to what to do with the money. I think my main issue is the £10k in my First Direct account and what to do with the other £10k that will be in the Nationwide current account. I need the money to work for me but be easy to get to so would I be better putting the full £20K into the Post Office online savings account which is paying around 3%?

Sorry this is long but as I say my mind has been going in circles over this.

jamesd

Any reason why you're not using investments? Those could produce around £4,000 a year in extra income from £70k if you're able to handle a 10-20% capital value variation. If you want less variation and are willing to reduce the income you just put more in savings accounts.

Ark_Welder

Far better to change your mind BEFORE making an investment than after, so don't try to rush, and try not to be panicked into doing something before you are ready.

I need the money to work for me but be easy to get to

Do you mean access within a short period of time, or do you think you might need to use it soon? Is capital security paramount? Do you want an immediate boost to your income or something that could grow over time? Your situation will change in a few years' time when you start to receive the state pension, so is that something that might influence your immediate requirements?

An investment in equities or bonds is 'easy to get to', but its value may have fallen if you want to use it soon - and always the possibility of being by considerable amount. But if you are thinking about 5+ years then the investment might have grown in value, so if there was a drop in value when you came to cash in then there is the chance that you might not actually lose more than the original amount - but no guarantees.

If you head is still spinning then try leaving it for a week or so before looking at it again. Make a list of what your priorities and requirements are, and that might help to narrow down the number of options that are the right ones for you.

ceejayblue

Thanks for replying. I think you are right, I'll put it all into a normal savings account that I can access easily and make a final decision once I've looked at every alternative.

kidmugsy

I saw today that Ipswich BS is offering a tracker account that looked rather attractive.