Going travelling - best place to stash house sale proceeds whilst away?

houseboatdream

Hi Guys

In about four months time OH and I are taking off in our campervan to tour Europe for however long it takes, likely to be at least one year probably two.

We were going to keep house (all paid for) and rent it out, however neighbour's son has been after buying it for over a year and we have accepted a very good offer. No estate agents or hips so we've saved about £3k there. We do intend to buy again but unlikley to be in UK (probably Netherlands) so liquidising house assest now made sense (I hope).

I want to try and keep our finances as simple as possible whilst away. Have already got all accounts Interent only and paper-free, so i would like to keep it this way. We will not need access to the capital at all and i don't want to access much of the interest (probably about £150 per month) as we have other funding for the travels.

We should have about £130k. I was thinking of putting £40k into Icesave as they pay interest monthly, this should net about £130 per month. Then I was thinking of putting the rest into a Halifax Fixed rate @ 6.30% annual. The reason I choose halifax is that i have existing accounts with them. I want to keep it simple. I know the money is tied up for minimum a year but this should suit us. I don't want to have to fiddle about moving mney to get better rates whilst we are away.

What do you guys think? I also have accounts with A&L (online saver with £1 in and plussaver with £1 in and old DirectISA), ING (60p in due to !!!!!! rates!), EggISA, Nationwide and Fidelity S&S ISA's. This years ISA limits are already used up.

Thanks

buglawton

One idea is to put a proportion of your savings into EUROs as a hedge against unfavourable currency movment of the £. The £ is being propped up by high interest rates - policy may one day change eg higher taxes or tighter govt spending instead of high interest rates so the £ might fall.

After all you may probably buy your next home in Euros.

Jonbvn

buglawton wrote: »

One idea is to put a proportion of your savings into EUROs as a hedge against unfavourable currency movment of the £. The £ is being propped up by high interest rates - policy may one day change eg higher taxes or tighter govt spending instead of high interest rates so the £ might fall.

After all you may probably buy your next home in Euros.

That is an extremely good idea. I very much doubt that sterling will reach it's present rates for some time. This also applies to somebody considering buying property in US$.

houseboatdream

Thats a good idea Jon & Bug - I had not thought of Euros.

No idea how to go about it though. Are there any particular banks or similar I should consider? Would i still get interest on the account?

I am going to remain UK resident/ domicile for tax purposes whilst we are away as we will be travelling through all the European countries. Does this matter?

thanks for help so far

buglawton

Almos certainly some major banks will have Euro savings products, interest rate may not be very spectacular.

A quick Google and:
http://www.nationwideinternational.com/accounts/accounts_euro_glance.htm

Jonbvn

Nearly all the highstreet banks & BS have offshore branches, which will offer Euro accounts. The rates are quite low ATM, since the CEB lending rate is relatively low, as compared to sterling.

Obviously you have to balance currency exchange risks against lower Euro returns. Not an easy one. What is HPI like in Holland?

bobby_rae

When I went away, I put my spending money in Nationwide - i put it in the esaver and then moved it across to the flexaccount as and when I needed it.
I did this because there are free cash machine withdrawls abroad so you can save quite a bit of money- and linked my nationwide credit card to be direct debited from the flexaccount as its a good credit card to use abroad (fee wise).
Hope that helps a bit!

houseboatdream

Hi Bob

Yes, the Natiowide account for traveelers is always a good recommendation. We have one and use the same system as you with our "travel fund" stashed in the esavings. Not tried using Interent abroad yet for banking though. OH's pension which is funding our travels will be paid into the flexaccount so provided we can live within our means I won't need to raid the savings.

I want to keep the house money completely separate though so there is no temptation to dip into it. I have to confess to not really understanding all the currency issues ie sterling v euro.

Having done a bit more research I can find quite a few "offshore" accounts with most of the main providers. Nationwide International is 2.30% interest, Moneyfacts best buy is HBOS at 4.30%.

Seems I have to weigh up keeping money in sterling in UK high interest account at say 6.30% or keeping some/all of it in euros at say 2.30 - 4.30%

Jon - HIP???? assume you mean house price inflation? Well, have been watching the market in our favourite area of netherlands for about 2 years now and the prices have not gone up by anyway near as much as UK.

Jonbvn

houseboatdream wrote: »

Jon - HIP???? assume you mean house price inflation? Well, have been watching the market in our favourite area of netherlands for about 2 years now and the prices have not gone up by anyway near as much as UK.

HPI = House Price Inflation

After further consideration, with BofE rates very likely to rise, I would stick with sterling savings much less hassle etc.

One thing to consider, if you are leaving the country for ever, you may become a non-resident for purposes & get your interest tax-free.

buglawton

On Black Wednesday the £ fell by 30% (in one day) after a period of being artificially propped up by high interest rates. Hence my suggestion to put a proportion of savings into Euros as this is the currency you might need when you finally buy property again.

sanfrancisco

Also, in current volatile economic climate, the possibility of banks going under is raised. Currently the FSA/Gov only guarantee to pay out £33k if a bank swallows your money. So, it might be worth limiting to this amount with any one bank.

Check out NS&I bonds.

I think spreading into some Euros is an excellent idea.

Eggs in one basket and everything.

We went campervanning last summer around East Europe (Croatia, Hungary, Slovenia). Had a great time, but did get broken into outside Budapest (sorry to put a dampner on things). So, invest in one of those really good door locks, and carry your documents everywhere.