£70k where to put it?

angrysharks

I'm self-employed so don't have a regular income but always manage to pay the bills and am not in debt.

I have a Co-op Bank current account for everyday direct debits and a have a Co-op/Britannia ISA which I've paid the max into for this year.

My long-term savings are in a Post Office account that has just changed to a lower interest rate so it's time to work out where to put it. There's about £70k to move.

I have a child so I wonder if I can use Children's Savings is an idea as some of that money is for her future. I've spotted the Skipton 5 year Children's Bond for 3% gross up to £10k.

I'm looking at the Nationwide FlexDirect to get 5% on £2500 but am wondering if it'll be a lot of hassle.

I can lock away at least £50k as it is long-term savings and I don't live on it. (I want it when I retire and when my daughter reaches University considerations.)

I always surprise myself that I manage to save so well as I get quite easily confuses by all the account options out there but I am frugal and want to make this money work for me and my daughter's future.

So, any ideas? Thanks!

angrysharks

Any tips at all?

eskbanker

angrysharks wrote: »

...I want it when I retire...

Do you have a pension?

angrysharks

I don't have a pension, no. I guess I sort of see these savings as a pension, but one I can access early if we're in financial trouble (I'm a single parent). I guess that's why I'm OK with locking a large amount of it away but I feel I should have access to some too as we do need some home improvements.

eskbanker

Personally I'd have thought that it would make sense to start a pension as these are generally considered to be a cost-effective way of rounding up a decent sum, given the managed exposure to equities, funds, etc, over a long period, plus the tax advantages. In theory at least you should get a significantly better return than any savings-based proposition, although it's a fair point that you wouldn't want to put that entire pot into a pension, it's worth keeping back an accessible emergency fund.

Other things to do include opening a stocks and shares ISA rather than just the cash one, and switching your current account to one paying decent interest, the Santander 123 for example gives you 3% on up to £20K, assuming you structure things to make regular payments.

angrysharks

Thank you. I really appreciate your advice. I'll start looking into pensions.

I'm nervous of getting a stocks and shares ISA as I had one and it took 5 years to get the exact same money back as it only lost money for ages. It was a 'balanced fund' yet I still feel the risk was more than I want to chance again. I understand all investments should be considered long term but that bad experience has put me off.

The 3% current account at Santander is good advice but I thought they wouldn't accept self-employed who don't get a 'salary' paid in each month but I'll pop into my local branch and see what they say. Thanks again. I didn't know where to start and you've given me lots to think about. I really appreciate it.

droopsnoot

angrysharks wrote: »

I'm nervous of getting a stocks and shares ISA as I had one and it took 5 years to get the exact same money back as it only lost money for ages. It was a 'balanced fund' yet I still feel the risk was more than I want to chance again. I understand all investments should be considered long term but that bad experience has put me off.

Five years is a bit of a short time to look at an investment product, though, usually considered the absolute minimum. The thing to look at is what happened between years six and ten with your investment. Also look at drip-feeding into the S&S ISA to take advantage of drops in the fund value.

angrysharks

I didn't know five years should be the considered minimum for investment products. That wasn't explained to me but I'll start looking at them differently now, thank you.

The world of pensions seems confusing - especially as I'm self-employed - but I'm working my way through all of the articles on this site to get some good grounding in the subject. Thanks again.

samsmoot

Premium Bonds are worth considering for some of the cash. Physical silver bullion such as Canadian Maples isn't too bad a price at the moment and has potential for long term gains, to say nothing of it being of 'real' value. I'd definitely consider a few grand investment in silver right now.

angrysharks

That is excellent advice! Just reading about Premium Bonds now and the fact the savings amount is totally safe really does appeal to me. And there's a little interest so it's better than the low interest my Post Office savings account has just defaulted to. I just need to check if there are fees and what happens when you need access to the money but that really could be a great help to me. And the chance to win sounds like a nice bonus. I don't play the lottery but this would be a fun way to 'play' with the savings while not taking a risk.

Buying physical bullion sounds very interesting too so I'll start looking into that too. I really appreciate your help, thanks!

planteria

angrysharks wrote: »

The 3% current account at Santander is good advice but I thought they wouldn't accept self-employed who don't get a 'salary' paid in each month but I'll pop into my local branch and see what they say..

i think you'll find that you just need to move money in each month...doesnt have to come from anyone other than yourself. so, for example, you could move £750 (if that's the minimum) to & from a savings account. Sant's system just want to see at least one decent credit/month.