How to invest £26K

tiredredhead

My husband has been made redundant payout was £26,600. Obviously until he gets another job we will need this to live off and pay mortgage etc. My wages will cover the mortgage and a few bills but not all.

It is sat in our current account at the moment, I need to move it to a better account but am unsure what to do.

No debts
Large mortgage 219K ish on 2.85% don't want to overpay at the moment in case we need the money to live (if no new job).

So was thinking
1. ISA each
2. £5k in premium bonds
3. the rest in savings account could set up some bonus saver accounts moving money around monthly etc.

Any advice would be greatly appreciated.

Thanks

kidmugsy

Somebody will be along in a moment to disparage the idea of premium bonds. Otherwise I must say that your scheme looks entirely rational to me. Perhaps worth considering making a little by moving a current account e.g.
https://forums.moneysavingexpert.com/discussion/4577591

innovate

I would look at saving up for the ISA deposits in current accounts that pay 3% - 5%, and regular savers that pay 4% or 6%.

And no, I wouldn't put any money into Premium Bonds if I had that little money overall. OK, may be £100 or so, but not some 20% of my cash.

xylophone

A cash ISA for each of you seems a sensible idea. The Cheshire?http://www.moneysavingexpert.com/savings/best-cash-isa

http://www.thisismoney.co.uk/money/saving/article-1583859/Best-savings-rates-General-savings--Internet-branch.html
https://www.google.co.uk/compare/currentaccount/as?gclid=COCd4Krb9LYCFYjLtAodJ2AAYw#!accountType=&typicalMonthlyDeposit=&overdraftLevel=

Presumably your husband is entitled to contributory JSA for six months.

tiredredhead

Ok great thanks.
I was just checking I hadn't missed something obvious.

I did see the Santander current account with a good rate. I was with them before and they were literally the worst institution I have ever had to deal with. Even if it saves me money I just cant bring myself to go there again. I have 3 current accounts and 3 savings account where I keep tight controls over all financial aspects so it would be a nightmare to move.

My uncle seems to do very well out of premium bonds he has a prize most months. (Holding Max allowed) Is it thought to be a poor return even with such low interest rates for savers?

Will definitely open ISA's ASAP.

helptoyou

tiredredhead wrote: »

Ok great thanks.
I was just checking I hadn't missed something obvious.

I did see the Santander current account with a good rate. I was with them before and they were literally the worst institution I have ever had to deal with. Even if it saves me money I just cant bring myself to go there again. I have 3 current accounts and 3 savings account where I keep tight controls over all financial aspects so it would be a nightmare to move.

My uncle seems to do very well out of premium bonds he has a prize most months. (Holding Max allowed) Is it thought to be a poor return even with such low interest rates for savers?

Will definitely open ISA's ASAP.

http://www.moneysavingexpert.com/savings/premium-bonds

See Link above re premium bonds, the only thing I might look at is how much paying 5k of your mortgage might save you on a monthly basis as opposed to putting 5k in premium bonds.

maryleerk06

Looks pretty good to me, as long as you have easy access to everything should you need the money quick I don't see the problem.

Only thing nagging me slightly is your cash ISA allowance - should you need to take the funds out you wont be able to put that money back in if you have used the full allowance. Might be worth stashing some in an e-saver as well just in case.

gadgetmind

Do you have any insurance in place to cover mortgage (or part thereof) given redundancy? I only ask because many people seem to have taken out PPI without realising they had done so.

Premium Bonds aren't now as bad as they were but only because ordinary savings accounts have sunk down to their grim level!

General advice: save at the best interest rate you can, spend as little money as possible until new work is found (cut everything that's not essential, big time!), and decide what percentage of the £26k to spend before downsizing to hopefully reach a sustainable spending level.

I commiserate with your position, and you come across as sensible enough to get through this, but there may well be difficult decisions to make that will be best made sooner rather than later.