250K, what to do with it ?

gazpacho_uk

Thanks for your comments on my previous questions. I now have more figures and have some options to consider and would welcome any advice or pointers
I now have £250,000 safely in my deposit account and I need to do something with it. We have no other debts besides the mortgage. These are my thoughts:

1/ We owe £54,700 on our mortgage with an interest rate at 2.5%. This is not a fixed rate or a plan as we are on the Lloyds TSB SVR. The plan is to pay this off completely and to stop payments of life insurance policies. This would save us £800 a month.

2/Open 2 x ISAs (one for myself and one for my Wife) £5,760 x 2 into COPPERPOT ISA (paying 2.7% not taxed). I work for the Police and COPPERPOT offer competitive savings which seem bettr than high street establishments. Includes life insurance

3/Maximum £1,500 a month paid into COPPERPOT NOTICE PLUS ACCOUNT (this account paid 4% in 2012 before tax). Could open two of these accounts (one in each name) to save £3,000 a month. This is the maximum allowed per month to a total of £40,000. Includes life insurance

4/£20,000 x 3 into SANTANDER 123 ACCOUNTS (paying 3% before tax). £500 to be paid into each account every month + minimum of 2 qualifying direct debits.( 1 x 123 account each & 1 x joint 123 account)

5/We plan to purchase a new property after selling our current house. We hope to get in the region of £160,000 for our current property and will be looking at a new property at around £280,000. We will not require a mortgage for this purchase.

I would also like to consider putting a lump sum or around £20,000 into a medium risk investment, but havnt got any ideas about this yet.

Any advice, help, suggestions are welcome, needed and appreciated ! Would you suggest I need professional financial advice or am I on the right track ?

brasso

You seem to know what you want to do, so I'm not sure what advice you're seeking.

If you're in the process of selling your house, I'm not sure if it's wise to pay off your mortgage. Yes, you'd eliminate your monthly payments but you need to check whether there's a penalty for early repayment, and whether it makes any difference whether this is done because of resale or just an early cash payment due to a windfall or whatever. And of course the big chunk it will take out of your pot means less interest paid. So do your sums.

No idea about cash accounts as I never use them. Nearly all my savings are in the stock market.

Ifts

gazpacho_uk wrote: »

4/£20,000 x 3 into SANTANDER 123 ACCOUNTS (paying 3% before tax). £500 to be paid into each account every month + minimum of 2 qualifying direct debits.( 1 x 123 account each & 1 x joint 123 account)

Just so you know....

You can have 2 x 123 Current Accounts in each name (giving you 4 x 123 accounts between the two of you instead of 3 if you go for 1 joint 123 acc).

Wise_Investor_2

A couple of things you can do with 250k:

• Give some to charity.
• Set-up a business/franchise of your choice.
• Buy lots of funds and shares, or just hedge your bets on 1 share.
• Besides that, you can also buy two ferrari or three porsche's.

Hope this is useful. Seems like you planned it all already - so what are you specifically asking opinion on?

alanfp

Am I going to be the first poster to say "give some to me, please"?

alanfp

Generally your plan looks sound, but is it worth putting some money in a fixed rate bond? When rates were 3.2% last autumn, I thought they couldn't go any lower - Wrong!
Maybe today's news of a European rate cut will filter through to the UK soon, making 2.25% look positively generous.
Who knows the future...

Now I know this is heresy on this forum, but if this is new/extra cash for you , do spend something on yourselves to make sure you enjoy the money.

jimjames

You've mentioned cash ISAs but not S&S ISAs. Any particular reason? If you do go that route I'd suggest avoiding any recommended by banks or police federation as they are unlikely to be good value compared to fund supermarkets.

G3VKI

gazpacho_uk wrote: »

Thanks for your comments on my previous questions. I now have more figures and have some options to consider and would welcome any advice or pointers
I now have £250,000 safely in my deposit account and I need to do something with it. We have no other debts besides the mortgage. These are my thoughts:

1/ We owe £54,700 on our mortgage with an interest rate at 2.5%. This is not a fixed rate or a plan as we are on the Lloyds TSB SVR. The plan is to pay this off completely and to stop payments of life insurance policies. This would save us £800 a month.

2/Open 2 x ISAs (one for myself and one for my Wife) £5,760 x 2 into COPPERPOT ISA (paying 2.7% not taxed). I work for the Police and COPPERPOT offer competitive savings which seem bettr than high street establishments. Includes life insurance

3/Maximum £1,500 a month paid into COPPERPOT NOTICE PLUS ACCOUNT (this account paid 4% in 2012 before tax). Could open two of these accounts (one in each name) to save £3,000 a month. This is the maximum allowed per month to a total of £40,000. Includes life insurance

4/£20,000 x 3 into SANTANDER 123 ACCOUNTS (paying 3% before tax). £500 to be paid into each account every month + minimum of 2 qualifying direct debits.( 1 x 123 account each & 1 x joint 123 account)

5/We plan to purchase a new property after selling our current house. We hope to get in the region of £160,000 for our current property and will be looking at a new property at around £280,000. We will not require a mortgage for this purchase.

I would also like to consider putting a lump sum or around £20,000 into a medium risk investment, but havnt got any ideas about this yet.

Any advice, help, suggestions are welcome, needed and appreciated ! Would you suggest I need professional financial advice or am I on the right track ?

I'll gladly help you drink it.

gazpacho_uk

brasso wrote: »

You seem to know what you want to do, so I'm not sure what advice you're seeking.

If you're in the process of selling your house, I'm not sure if it's wise to pay off your mortgage. Yes, you'd eliminate your monthly payments but you need to check whether there's a penalty for early repayment, and whether it makes any difference whether this is done because of resale or just an early cash payment due to a windfall or whatever. And of course the big chunk it will take out of your pot means less interest paid. So do your sums.

No idea about cash accounts as I never use them. Nearly all my savings are in the stock market.

We are on the SVR now after the fixed rate mortgage stopped around a year ago. There is no early repayment penalty and although it will take a chunk out of the pot of money, we will have around £800 a month at our disposal for savings ....... Paying off the mortgage is one area I am not 100% on as there are several differing views on the forums on this subject

gazpacho_uk

Ifts wrote: »

Just so you know....

You can have 2 x 123 Current Accounts in each name (giving you 4 x 123 accounts between the two of you instead of 3 if you go for 1 joint 123 acc).

Thanks for that ....... some more juggling of that roaming 500 may need to be looked at

gazpacho_uk

alanfp wrote: »

Generally your plan looks sound, but is it worth putting some money in a fixed rate bond? When rates were 3.2% last autumn, I thought they couldn't go any lower - Wrong!
Maybe today's news of a European rate cut will filter through to the UK soon, making 2.25% look positively generous.
Who knows the future...

Now I know this is heresy on this forum, but if this is new/extra cash for you , do spend something on yourselves to make sure you enjoy the money.

Thanks for that. I didnt see yesterdays news .... may need to do a bit of reading !