Best thing to do with redundancy money?

Burlesque_Babe

At the end of May I will get my redundancy money. I want to keep a little back and so will have £15,000 to 'do' something with.

I'm afraid my knowledge of savings/investments is nil and I'd like to throw it open to all you lovely people for some suggestions.

I won't have anything extra to add to it each month.

Help?

rotate

Will you still be an income taxpayer.
If yes then put the maximum in a cash ISA,if no then put as much as you feel you want in a high interest current a/c and make sure you register for interest gross.If you feel that you can afford some risk then put something into stocks and shares.But remember that they can go down as well as up.

Burlesque_Babe

Yes I will still be an income tax payer, although I am doing some self employed work for the forseeable future so will be paying it when the tax bill comes in each year.

What are the ins and outs of cash ISA's? And which ones should I be considering?

Burlesque_Babe

ok, I've done a bit of reading........and as I understand it (but please correct me if/where I go wrong)

The first £3,000 goes into an ISA

The rest should go into a high interest savings account

Then drip feed from the savings account into a regular savings account.

i've had a look around and this is what i've come up with

ISA - NS&I Direct ISA - 6.05% NEW RATE "Rate guarantee? Yes. Guarantees to pay BOE base rate + 0.55% until 5th April 2008. Minimum deposit: £1,000. Minimum further deposit £250 (£100 by standing order).
Operated via: Internet and Telephone."

i've taken that info from the ISA board on MSE

Transfer the rest (£12,000) into a high interest savings account - this one is talked about by Martin

ICICI Bank

"ICICI's HiSAVE* internet account’s rate will increase to 6.05% AER on Friday 18 May (it's currently 5.65% but don’t worry sign up now and your rate will jump up then too). This is a totally clean account with no catches or short-term bonuses"

Then drip feed £500 a month from this into a regular savings account

Yorkshire Building society
"The Yorkshire BS Regular Saver pays a lower 7% AER, but you can squirrel away up to £500 each month. For anyone drip feeding large savings in, this is a huge plus. The monthly deposit can be varied, meaning if you may pay in more than £250/month and don’t want to juggle more than one account, this is worth a look.

Again, you can only miss one monthly payment and make one withdrawal to still get the 7% AER.

Account Term: Unlimited (up to a maximum £20,000 balance)
Rate: 7%
Contributions: £10 - £500/month"

That will mean after 1 year I will have £3000 in an ISA and £6000 in a Regular Savers account with the remaining £6000 in the ICICI account. Then next April, I put £3000 of the remaining money in another ISA, leaving £3,000 in the ICICI account (unless I open a second regular savings account with someone else and drip feed into that also)

This is my very first attempt - ever - at trying to plan how to save some money so please be gentle with your comments!

Burlesque_Babe

Any comments? I really am a novice at this and would appreciate any thoughts .

debbie42

Sounds about right to me. It's similar to my approach, though I've used some "special offer" A&L accounts for good interest rates, not the others you cite

I also have a share portfolio, though that is very much a long term investment, and not without risk.

dancingfairy

Sounds like a good plan to me. The only thing is if you want to put some in a stocks and shares - although they go up and down although historically they generally go up over time but you are talking 5 -10 years. Otherwise your plan sounds great and is what I would do.

P.S I'm not a financial advisor or anything just an average person.

Burlesque_Babe

thankyou!

I would love to put a bit in stocks and shares, maybe £1000 or so, but again it's something I know nothing about, although about 8 years ago I predicted Tesco would be good to buy, just before they seemed to take over the world and about a year ago, when M+S were really in a mess, I said to my OH they would start to get better soon - and they have!!

I just need another brainwave I guess!