£30,000 gift- what to do with it?

timehastoldme

Over the last couple of years my husband and I have embraced thrift in a big way, moved to a cheaper part of the country, gotten rid of the car, learned to feed,clothe and entertain ourselves cheaply and cheerfully and started to clear our debts.

We were doing very well - got to a position where my entire salary (£1,400pcm) was going into debt repayment, and then we were gifted a large cheque from family which wiped our debts completely. We were shocked - but pleased, and determined to keep up with our new thrifty ethos and build up savings equivalent to the cheque value for a deposit on our first house a few years down the line and/or fund my husbands PhD which he hopes to start next September. We opened a joint Santander 123 account and started throwing my salary at that.

If the shock of the first cheque was big, the shock of the second was bigger- £30,000 out of the blue last week. It's in the Santander account now and we are trying to figure out what to do.

Neither of us has an ISA because up until the last couple of months, all money went into debt repayment, so we know we both need an ISA (which one?). I've recently switched banks to First Direct, so will set up a regular saver account as well and dd the maximum in from Santander each month.

We've learned to really enjoy our simple thrifty day to day, so don't want to change that. The plan is to still throw my entire salary at savings every month - my hours are dropping a little next year (I'm a part time teacher) but it'll still be a good amount saved.

My husband is hoping to secure a stipend for his PhD, if he does, we'll start to look for a house next year - a little fixer upper which we are hoping with the budget we've set ourselves and our savings ongoing we should have about 1/3 of the value deposit plus some set aside for works.

If he doesn't secure a stipend then the money will be used to pay the rent for the three/four years of the PhD.

So we don't think we can lock it away for a number of years - probably only one. We are happy for it to be out of sight - so that it doesn't distract us from the day-to-day of the next year. We don't want to get to thinking we have money and let the saving slip - pay now play later!

Does anyone have any advice for us please? I have never, ever been in the position to have savings before, and thought the 123 account would do just grand for our modest aspirations, so having savings beyond that has just thrown me completely!
Many thanks.

xylophone

Use the ISA allowance for each of you.

Might the Nationwide Flexdirect for each of you be worth consideration?http://www.nationwide.co.uk/current_account/flexdirect/default.htm

I am assuming that both of you are standard rate tax payers at the moment but will your husband be a taxpayer when he is a student? Might he be eligible for the 10% rate? http://www.hmrc.gov.uk/taxon/worked-examples.htm

You might consider a fixed term bond if you want to keep the money out of reach.
http://www.thisismoney.co.uk/money/saving/article-1583859/Best-savings-rates-General-savings--Internet-branch.html

innovate

You can have more than one Santander 123.
And 3% Lloyds Vantage and BoS Vantage accounts.

Just takes a bit of research on this board to find the details.

Icecold_2

I just filled a Santander 123 with 20k and was told my husband and I can have 2 of them each...not sure we want them at the mo but good to know

atush

How much do you need for a deposti (plus emergency fund) as you already have 30k+?

Does your OH have a pension? I assume you are int he teacher's pension.

Mojisola

timehastoldme wrote: »

My husband is hoping to secure a stipend for his PhD, if he does, we'll start to look for a house next year - a little fixer upper

Don't underestimate the amount of time he will need to spend on his PhD! Trying to do that and major house improvements may be unrealistic.