What to do with £200k?

silver_inca

Hi All, i have £200k in a Santander eSaver Issue 4 returning 3% AER, i am low rate tax payer and the eSaver is coming to an end at the end of this month.

I have an S&S ISA which i max out every year with a mixture of funds which i am happy with. My mortgage, which is low - is covered by other investments - so i don't need to worry about it. I have a simple lifestyle and apart from the mortgage - no debts.

As the savings rates are crap now, I don't want to earn a paltry 2% - but it looks like the way it's going to be for a while. Any advice what to do next? Any advice would be greatly appreciated.

Thanks.

innovate

silver_inca wrote: »

Hi All, i have £200k in a Santander eSaver Issue 4 returning 3% AER, i am low rate tax payer and the eSaver is coming to an end at the end of this month.

I have an S&S ISA which i max out every year with a mixture of funds which i am happy with. My mortgage, which is low - is covered by other investments - so i don't need to worry about it. I have a simple lifestyle and apart from the mortgage - no debts.

As the savings rates are crap now, I don't want to earn a paltry 2% - but it looks like the way it's going to be for a while. Any advice what to do next? Any advice would be greatly appreciated.

Thanks.

You are taking a huge risk by having £200K in a single financial institution. http://www.moneysavingexpert.com/savings/safe-savings.

Other than that, it is impossible to say what you should perhaps do with your money because you haven't said how old you are, whether you need the money anytime soon, whether you have a pension, what your risk profile is etc. Even then, you would most likely be better advised to consult an IFA rather than an Internet forum.

Glen_Clark

I cannot imagine the British Government allowing a FSA regulated bank to leave retail account holders out of pocket, I believe they would just print more money to bail them out, as they did with Icesave.
Nevertheless, I usually keep below £85k in there just for peace of mind.

innovate

I can believe it - and I hope they would. However, I also hope we will never have to find out.

gadgetmind

It really does depend on -
1) What this cash is intended for. If it might be needed for a house purchase, then it needs to be kept as cash. If it's a rainy day fund, then you can layer it into instant access, one year and two year accounts. More than 2-3 years of essentials as cash seems excessive to me if you have other assets.
2) Your tax situation. As you're a basic rate tax payer, then investing in dividend producing assets (individual equities, Investment Trusts or income funds*) is very tax efficient. Interest producing assets (bonds, property, gilts) are less efficient unless you don't pay any tax and these are candidates for ISAs.
3) Your pension situation.

Of course, this might already describe your "other investments" in which case option (1) is the most relevant.

* - These don't need to have "income" in the name, but should pay out as dividends and don't go for "accumulation" versions as this adds paperwork complexity.

zaksmum

If the account is a joint one you can have up to 170K in one bank and be fully protected

Glen_Clark

gadgetmind wrote: »

As you're a basic rate tax payer, then investing in dividend producing assets (individual equities......

Which would you suggest?

BLB53

As the savings rates are crap now, I don't want to earn a paltry 2% - but it looks like the way it's going to be for a while. Any advice what to do next? Any advice would be greatly appreciated.

Have you considered shares? There are some decent yields still around eg Sainsbury 5%, Vodafone 6%.

Here's a link to a good article I saw yesterday on RIT

http://www.retirementinvestingtoday.com/2013/01/investing-for-income-via-higher.html

atush

What is your pension situation? What % tax do you pay? What is your current pension pot(s) worth (or how many years of FS)?

I would say to keep some in cash, some in equities and some into Pension but what amts may be affected by your answers.

srcandas

Maybe there should be a standard template on the forum for people to complete. Save all the repetition of the same initial questions.

And then some standard answers.

And then standard follow up.

Or would that be deemed "treading on IFAs feet"?

atush

What a thought :beer: