Investment advice please!!!

Jimboy_2-2

Hello money savers,
I'm hoping someone can offer some useful investment advice as I realy don't have much of a clue. Unfortunately my grandparents passsed away early this year and have generously left me approximately twenty thousand pounds. I am currently living in rent free accomodation and am considering buying in approx two years, for which I will probably use my inheritance as a deposit. I am aware that only so much can be placed in an ISA, however, I'm not quite sure the best way to invest the rest. I do not want to take any risky investments such as shares. If someone is able to offer me advice on this subject it would be realy appreciated. Many thanks, Jimboy.

amcluesent

You don't say if you're waged - the only benefit of the £3000 cash ISA being it's tax-free.

For two years and no shares, you're pretty much left with a high-interest bank account run over t'internet, premium bonds or maybe loaning on the 'A' markets at Zopa.

Ian_W

For -5yrs you shouldn't go for shares anyway unless you enjoy taking fairly high risks, which is obviously not your mind-set from your post.
Even if you're not a tax payer now but maybe in the future then a cash ISA is worth doing. That's £3k this tax year and £3,600 next tax year as limit is being increased. The rest will be better in a high paying savings account which will have the interest taxed at 20% unless you are a non-tax payer when you can get it tax free also.
For the best accounts both ISA and non-ISA read the savings articles from the menu on the left of the screen, they link to current best buys. Personally I wouldn't bother with premium bonds but there is also an article about them if you fancy a flutter.

JDinho

There are a number of tax free savings products offered by National Savings (remember the Alan Sugar adverts?) which you could use in addition to a cash ISA. If you are aware of the time horizon you could opt for the Fixed or Index Linked saving certificates.

This would maximise the returns on your savings by shielding them from tax. As a comparision you could effectively gross up the return i.e. 5% free of tax is 6.25% before tax if you are a basic rate tax payer or 8.33% if you are a higher rate taxpayer. In other words to replicate the 5% interest you are earning free of tax you would need to get 6.25% or 8.33% if that interest were taxed.

Hope that helps