Lump sum investment

shoelessjoe

Hi All

I'm moving to a new job in 3 months time and i have a lump sum of £25,000 from my previous employer which i don't really need to dig into at present as i have no debts apart from my mortgage . What should i do? I have approx £85,000 left on my mortgage. Do i pay off a chunk of that or invest? Do i invest in ISA's or high interest savings account or bonds or something else low risk?

Thanking you in advance for any help or advice.

dunstonh

Do i invest in ISA's or high interest savings account or bonds or something else low risk?

Which is best for your objectives?

ses6jwg

What are your long term goals for the money?

I always reccomend utilising any tax free allowances first, so I would contribute £5340 to a cash ISA if you haven't already, I would then consider putting 15k into Index linked savings certs, then keep the remainder in the best paying instant access saver you can find.

If you can overpay on the mortgage, this could also be an option.

shoelessjoe

dunstonh wrote: »

Which is best for your objectives?

I would like my money to 'work for me' in a way were it won't be at risk. I'm a tad wet behind the ears in terms of all this savings and investment as i've never had this amount of money floating in my account. I'm 43 and have no kids or partner at present. Is it worthwhile signing up for a First Direct account and go with the high savings rate they have.

shoelessjoe

ses6jwg wrote: »

What are your long term goals for the money?

I always reccomend utilising any tax free allowances first, so I would contribute £5340 to a cash ISA if you haven't already, I would then consider putting 15k into Index linked savings certs, then keep the remainder in the best paying instant access saver you can find.

If you can overpay on the mortgage, this could also be an option.

I don't really want to gamble with this investment and lose vast sums of money. Inexperienced in this field to be honest.

psychic_teabag

What interest rate are you paying on your mortgage ?

Loughton_Monkey

shoelessjoe wrote: »

I would like my money to 'work for me' in a way were it won't be at risk. I'm a tad wet behind the ears in terms of all this savings and investment as i've never had this amount of money floating in my account. I'm 43 and have no kids or partner at present. Is it worthwhile signing up for a First Direct account and go with the high savings rate they have.

A bit of a contradiction in terms [no risk and 'work' for you].

Best you'll get [probably] is NS&I Inflation Linked bonds which will at least pay a tad more than inflation. If inflation lowers, however, then a more traditional account could become better.

Otherwise, you are going to get a miserable rate of 3% [instant] or a bit more if you fix for a year or two.

First Direct are an excellent bank. But apart from the 8% regular saver [which addresses about 10% of your savings for an average of 6 months] they do not have anything like attractive savings interest rates.

If your mortgage rate is 'high' [say above 4%] then you might start thinking of paying that off, and then re-investing the 'saved' interest in various savings accounts.