£74000 savings

marginalone

Hello,

We have £74k in savings across various standard bank accounts. However the interest rates are pretty poor.

I recently lost my job and although the wife works we are looking at ways to make this money work for us. It was meant to be a deposit for a new house but due to the current job situation we are going to stay put for a while longer..

But where to start? - so I ask my learned forum members what should we do with this cash?

Thanks!

xylophone

If you are going to need the money for a house deposit within a year or two, then investment of the cash is high risk.

You need to look for the best interest rate you can get on the cash?
http://www.thisismoney.co.uk/money/saving/article-1583864/Best-savings-rates-Isas-Cash-Isa-accounts-fixed-rate-Isas.html

innovate

ISAs aren't the only game in town, particularly for somebody who isn't paying any tax right now because they aren't working, and therefore can get gross interest. Plus, of course, you can only put a fraction of the £74K into an ISA.

The answers to the best paying accounts are all on this board. Seems good use of all the spare time you have now to roam through the various posts to come up with a plan.

bigfreddiel

[QUOTE=innovate;61595689 you can only put a fraction of the £74K into an ISA.
[/QUOTE]

well 32% of your £74k could be put into an isa wrapper - i wouldn't call a third a fraction - and i'm guessing you're implying its too small to bother - well i don't think so

and even if you're not a tax payer now you may/will be one day.

cheers

fj

MoneySaverLog

bigfreddiel wrote: »

well 32% of your £74k could be put into an isa wrapper - i wouldn't call a third a fraction - and i'm guessing you're implying its too small to bother - well i don't think so

and even if you're not a tax payer now you may/will be one day.

cheers

fj

It's only a third if they both use their s&s isa allowance which given they may want the cash in a couple of years for a house deposit does not seem sensible.

marginalone

Hi,

Due to my lack of work at the moment we have decided to put the moving house plans on ice.

So, revisiting this thread, we still have £70k - outgoings are eating into the savings at £500- £550 per month. Are ISAs the best way forward to get some sort of return?

We are not sure about investing due to the risk involved.

Thanks for any replies!

xylophone

If you are unable /unwilling to invest you are stuck with very poor interest rates which do not match even CPI inflation.

You might as well each use your cash isa allowance - after that you just look for the best rate you can find and hold the savings in your name?

bowlhead99

Presumably when you have a job you will go back to replenishing the savings and the house-buying plan will come back off ice. If that is likely, forget investments due to risk, the goal is to preserve capital and earn as much after-tax interest as possible to try to keep up with inflation. If the money is a long term retirement pot it is a different story and you could think about investments.

If you continue eating savings at over 500 a month you will need a quarter of it to live on in the next 3 years or so, so don't lock that bit away in something you can't touch in that timeframe. You can use "various standard bank accounts" as you put it, but make sure they are the highest paying bank accounts you can find, which are not likely to be the 'standard accounts' from any bank. They will be current accounts with terms and conditions to get a promotional rate, or they will be fixed term accounts which can't be touched, or they will be ISA accounts which might be instant access or fixed term - you and wife should both be using ISAs to make sure you utilise your current year's tax free allowance rather than losing it next April. A free tax wrapper which expires if you don't use it should not be ignored.

And next April you can both shift some more into ISAs to use the next year's allowance. If you need to use some of the cash to live on, don't take it out of the ISA (because it can't be replaced).

As Innovate suggested, ideally you would have been using the last two months to identify the current top paying accounts which are the specific ones you are going to use, and moved the money already, rather than generically coming up with "so... um... ISAs might be the best way forward?"

You can use ISAs for 11.5k of the cash between you, if you havent subscribed anything to them this year, then you have to wait for April to get a new allowance. Of course if some of the money you already have is really in ISAs it is just a case of moving that money, via a proper transfer process, to the ones that pay better rates and accept transfers in.

Anything that doesn't fit in the ISAs, put in the highest paying taxable accounts you can find, after considering your need to access some of it, in the name of whichever of you is expected to be the lowest earner in the year the interest is paid.

Most quality Sunday newspapers tell you the current top paying savings and ISA, fixed and not fixed accounts, so combined with this website, this forum and looking around for current accounts with special deals (Santander, Nationwide, Lloyds to name a few) you should be done in the next few hours.

kidmugsy

Premium Bonds. Up to £30k each. Rest on instant access in a high-interest current account in the non-worker's name, e.g. Santander 123.

JustAnotherSaver

bigfreddiel wrote: »

i wouldn't call a third a fraction

I always knew it to be a fraction.

Same as a half, or a quarter, or 3 quarters etc etc etc

Archi_Bald

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