What to do with 40k in the short term

stevoh

Hi All,

I've saved hard recently and now have £40k in savings, but no other assets (except £42k in a SIP pension scheme).

The reason I've been saving so hard is to buy a flat, however in the part of London I'm keen to buy in that would only constitute a 10% deposit on a 2 bed place, so I'm mulling over hanging fire until I can save up another £40k to get a much lower interest rate with a 20% deposit. To be honest, I'm also a little nervous about the future of the economy and house prices too. I think its safe to say I'm not going to be buying anywhere for at least 6 mths and possibily longer.

I have 10k sat in a cash ISA and 30k in a Santander easy access account, earning approx 3% pre tax.

I'm getting itchy feet and want to start doing something more creative with my cash, but also want to diversify a little. I've been reading alot of horror stories around the financial system and how cash could be rapidly devalued if things go terribly wrong.

I'm considering investing a chunk in Gold and/or Silver (5-10k) incase things really do go wrong, and whacking 10k in to a stock and shares ISA but finding a really defensive fund to invest in (one of the Hargreaves Landsdown Wealth 150)

I'm new to investing, (infact I'm new to not being in the red), and I know that they say you should only invest money you don't need for at least 5 years, however with interest rates being so low, it seems a waste for the cash to be sat there doing nothing. Since I'm only earning 3% interest, surely a really defensive fund, coupled with it being in a tax free ISA fund, would be a better bet even in the short term?

Any tips would be much appreciated.

Steve

Thrugelmir

stevoh wrote: »

Since I'm only earning 3% interest, surely a really defensive fund, coupled with it being in a tax free ISA fund, would be a better bet even in the short term?

Would you be prepared to risk a 10% capital loss on your investment?

If buying a home is your objective. Then personally I would remain invested in cash.

innovate

Well done, Steve, for being out of the red - - make every effort to
stay there!

Yes, you can 't get much more than 3% (if you are very lucky) interest for cash right now, but this does by no means invalidate that you should NOT put your money in investments unless you have a 5+ years (ideally 10+ years) horizon.

Don't get sucked into the gold/silver promise - - it's mainly touted by gold/silver owners who desperately need to up the price. Look at which financial institution and/or which government invests in gold/silver, then look again.

stevoh

Thankyou both. Have a great Christmas!