What to do with £20,000 savings per year?

Desert78

Hi everyone,

It's my first post as I have never had any money of my own before (I was always paying it back!)

I have paid off all of my debts, I don't own a house or a car and I am easily on target to save £20,000 per year.

I'd really appreciate some advice on how to make this money work for itself - whether that's getting a mortgage on a house somewhere or buying shares or a high-interest account, or something else.

What ideas do you guys have? I'd appreciate anything you have to suggest!

Thanks

curedham

Depends what's your mid-term plan. If you want to start saving for a house deposit then you can't take too much of a risk with your savings.

First I'd out the maximum cash ISA allowance per year, that's just over a quarter if your 20k. Then open a few of those regular saver accounts (HSBC, Barclays), they usually have max 250 - 300 / month. But that's good if your you have monthly income. These regular saver accounts have the highest interest rates right now.

All the savings accounts and fixed term bonds are giving you paltry interest right now but there's not much options out there.

I'd put the bulk of the rest of the cash in the highest interest saving/bond that you can find (with the acceptable term for you) and the rest you may want to try peer to peer lending or shares ISA.

GeorgeCarranza

i would rather prefer to invest it in some good policies and mutual funds as they are safe and reliable one to use

atush

Fill your cash isa. You need (as youhave been a debtor in the past) to have an emergency fund of at least 3 months spending.

Then, join your work pension (if there is one, and if there isn't there will be soon). Then use your S&S ISA allowance to invest further- we aren't america so don't know if there is a mutual find equiv, and policies to me mean insurance products which carry high costs.

So i'd choose lifestyling funds like vanguard, or a selection of funds, trackers or investment trusts.

This is unless you are considering buying a home in the near term, in which case you'd probably continue to save mostly in cash. Longer term house purchase can be funded by the S&S Isas and investments outside the ISA.

Desert78

Thank you so much, atush, GeorgeCarranza and curedham for these helpful replies! I will look further into the options you have suggested. Much appreciated!