250K, what to do with it ?

gazpacho_uk

jimjames wrote: »

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.

Thanks for your post, what is a S&S ISA ?

macman

Stocks and Shares ISA.
Agree with the above, you should both be using your total ISA allowance, not just the cash ISA value. Total ISA allowance is then £11,520 each. and same in subsequent years.

alanfp

That's ok if you want to gamble with large amounts of money ... It's ok if you're happy to take the risk of losing , that's fine. Some people like the thrill and the potential of larger gains; others get stressed checking the value of their investments every day. Only you know which category you fall into!

First off, how would you choose which fund or shares to invest in?

grizzly1911

alanfp wrote: »

That's ok if you want to gamble with large amounts of money ... It's ok if you're happy to take the risk of losing , that's fine. Some people like the thrill and the potential of larger gains; others get stressed checking the value of their investments every day. Only you know which category you fall into!

First off, how would you choose which fund or shares to invest in?

Do some reading Tim Hale - Smarter Investing, Monevator.com, DIY Investor for background to start with - lots of other sites/books.

Sites such as Trustnet, Morningstar and citywire will give you information and analysis on products.

Mitigate the risk by spreading the investment by type, region, mix. Use an overarching composite like Vanguard for ease perhaps.

If all that sounds like hard work, or not something you feel confident in, consider using an IFA.

jrawle

gazpacho_uk wrote: »

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

You just need to consider whether the interest you are paying on the mortgage is greater than the interest you could be earning on the month elsewhere. If it is, you should pay it off. Not so long ago, a mortgage rate of 2.5% seemed a good deal, but a basic rate taxpayer needs a savings account paying 3.125% to make the same amount, and that's simply not possible at the moment. So your plan for an ISA paying 2.7% and paying off the mortgage seems best.

Were savings rates still better than your mortgage rate, you'd be better putting the money in a savings account. Yes you'd have £800 per month if you didn't have a mortgage, but what about the £57,000 you are effectively getting a worse return on than if you'd put it in a savings account? Also, a lump sum in a fixed rate account is likely to attract a higher rate than a variable or instant access account to put your £800 in each month. But this is academic, given that saving rates are so poor.

The only other thing to consider when paying off the mortgage is whether you could possibly need the cash in an emergency, e.g. losing your job. You may have no mortgage, but if you have no cash to pay the bills it could be a problem, as the bank won't let you take out a new mortgage if you have no job. However, if you already have a mortgage the bank won't care about your employment as long as you keep up the payments. Some mortgages, such as the old Nationwide ones (no longer available) allow overpayments to be borrowed back - I don't know about yours, but you would need to keep a small mortgage active, not pay it off completely. From the sound if it, this isn't an issue for you anyway.

fizio

I would def put 2 x 11k into stocks ISA and if of a nervous disposition go for a low cost ftse tracker or a worldwide tracker or even a high yield ETF

Archi_Bald

Assuming the OP can afford to put some of the money away for the next 5-10 years, I would also echo the suggestion that better returns could be achieved for part of the money in one or two S&S ISAs.

However, given that the OP seems unfamiliar with S&S ISAs and investments in general, this should not be a rush decision. They should put the funds into the best interest-bearing accounts for now, then inform themselves thoroughly about self-select S&S ISAs, and perhaps make their first foray before the start of the new tax year.

gazpacho_uk

macman wrote: »

Stocks and Shares ISA.
Agree with the above, you should both be using your total ISA allowance, not just the cash ISA value. Total ISA allowance is then £11,520 each. and same in subsequent years.

Thanks for that ..... I obviously didnt read everything about ISAs. We will be using the full allowance

gazpacho_uk

jrawle wrote: »

You just need to consider whether the interest you are paying on the mortgage is greater than the interest you could be earning on the month elsewhere. If it is, you should pay it off. Not so long ago, a mortgage rate of 2.5% seemed a good deal, but a basic rate taxpayer needs a savings account paying 3.125% to make the same amount, and that's simply not possible at the moment. So your plan for an ISA paying 2.7% and paying off the mortgage seems best.

Were savings rates still better than your mortgage rate, you'd be better putting the money in a savings account. Yes you'd have £800 per month if you didn't have a mortgage, but what about the £57,000 you are effectively getting a worse return on than if you'd put it in a savings account? Also, a lump sum in a fixed rate account is likely to attract a higher rate than a variable or instant access account to put your £800 in each month. But this is academic, given that saving rates are so poor.

The only other thing to consider when paying off the mortgage is whether you could possibly need the cash in an emergency, e.g. losing your job. You may have no mortgage, but if you have no cash to pay the bills it could be a problem, as the bank won't let you take out a new mortgage if you have no job. However, if you already have a mortgage the bank won't care about your employment as long as you keep up the payments. Some mortgages, such as the old Nationwide ones (no longer available) allow overpayments to be borrowed back - I don't know about yours, but you would need to keep a small mortgage active, not pay it off completely. From the sound if it, this isn't an issue for you anyway.

Thanks jrawle, a lot to consider ....... much appreciated

gazpacho_uk

Archi_Bald wrote: »

Assuming the OP can afford to put some of the money away for the next 5-10 years, I would also echo the suggestion that better returns could be achieved for part of the money in one or two S&S ISAs.

However, given that the OP seems unfamiliar with S&S ISAs and investments in general, this should not be a rush decision. They should put the funds into the best interest-bearing accounts for now, then inform themselves thoroughly about self-select S&S ISAs, and perhaps make their first foray before the start of the new tax year.

sound advice ..... I could use the time between now to set up the safe options, see where the house sale/purchase goes (if it does with Christmas looming) and then look at riskier investmemts when the new tax year begins