best thing to do with....

mrgoodcat

Hi,

i currently have 25k saved up and was clueless about what the best thing to do with it is. ive looked at banks isa's interests rate which are slightly confusing and concluded i would get between 3-4% interest which isnt a great deal.. any suggestions?? maybe an investment?

And second question is a family member received a large amount of compensation around 180k and the same question again regarding suggestions of what to do?

Thanks

Eco_Miser

What do you want to do with it? Buy a house in a few years time? Supplement your pension in forty years time? If the first you are stuck with savings accounts, if the latter, you should be looking at long term investments, possibly including an actual pension.

mrgoodcat

well the family member is 50ish and retired so that will be to live off so im presuming something short term maybe?

my self im not so sure im not too fond of being a home owner or a pension at the moment but i really have no use for it right now i was just saving for the sake of it and feel i maybe not be making the best of it while i dont need it.

sorry to be so vague and indecisive.

R_P_W

So, you dont seem to want to save it, you dont want to be a home owner and you dont think you need a pension.

Either spend it then or donate it to charity?!

Aegis

mrgoodcat wrote: »

well the family member is 50ish and retired so that will be to live off so im presuming something short term maybe?

50 and retired could mean living for another 40 years or more. That age doesn't necessarily mean that the solution should be short term.

droopsnoot

R_P_W wrote: »

So, you dont seem to want to save it, you dont want to be a home owner and you dont think you need a pension.

Either spend it then or donate it to charity?!

To be fair, that's not what the OP said, just that they don't have a specific plan for it at the moment. That's not a reason to waste it.

OP, you have to decide how quickly you might need access to the funds. If it won't be for a number of years, a lot of people will recommend various kinds of shares-based investments but only as a long-term plan, say ten years or more. If you need access to it more quickly than that, you're pretty much stuck with savings accounts and whatever you can gain by playing the regular savings accounts.

If you're not using your ISA allowance it would be worthwhile doing that too, just to minimise the tax you pay on any interest now or in the future. Plenty of articles on here and in the ISA sub-forum covering these topics.

atush

First of all, for both of you pay off debt. Then, look emergency cash savings of 3-6 months spending (using Cash isas if you pay tax).

Then both of you look at pensions. you need one, even now, even if you dont realize it. The early days on contributing when you have 40 years to go until retirement are the best ones as the money has longer to grow. And every 80 you put into savings could be 100 in a pension with tax relief (or more if you are a higher rate taxpayer). Plus the 50 yr old probably has a least a decade to go so plenty of time to add to a pension.

Then look at investments other than cash for both of you, as you aren't planning on buying a home you can invest the money as this will give you more chance of meeting and beating inflation than thru cash savings at the current rates. Again use your ISA allowances for this.

ed123_2

.....I would look at frozen orange juice and pork bellies....

mrgoodcat

thanks everyone so much for all the useful information. A quick question to atush, would the emergency cash be necessary? could i not take what i need out of the investment you suggested? or is it a case of once its in, its in until the length of the investment.. I'm sure with 5 year bonds for example you can take some money out early so not sure if it applies to both..