MSE News: Would you lock savings away for 10 years for 4% interest?

marathonic

If I was retired and wanted to secure a guaranteed 4% on my 25% lump sum from my pension pot with minimal risk, I may consider something like this. The remaining 75% could remain invested in more risky assets.

Then again, I'd consider the "Full £85,000 FSCS protection". Will this still be around in 2, 3 or 5 years?

Archi_Bald

marathonic wrote: »

Then again, I'd consider the "Full £85,000 FSCS protection". Will this still be around in 2, 3 or 5 years?

why wouldn't it?

A_Flock_Of_Sheep

I would not lock my cash away for 10 years I think I would rather take the investing route with a 10 year horizon.

Thrugelmir

Wilkins wrote: »

By me, quite a few. 40% of my portfolio, in fact.

High weighting in utilities, miners and oil?

adindas

Nope. But will do for ten years fixed term if it was greater than 10%.

JimmyTheWig

marathonic wrote: »

If I was retired and wanted to secure a guaranteed 4% on my 25% lump sum from my pension pot with minimal risk, I may consider something like this.

Good point.
For those without a mortgage and no reasonable plans to dip into this money in the next 10 years it isn't such a bad idea.

isofa

Not in a million years: 10 years for 4%, seriously?!

Considering rates are likely to rise in the next 3-5 years (IMO), it'd be a gamble, 3 years maybe if I didn't need to touch the money.

10 years for a fixed rate - surely better vehicles for your money if you are looking at that period of time.

alixandrea

Unless I wanted a monthly 'paycheque' out of a large amount of money in this savings account, there's no way I'd go for it. Investment of £10,000+ in stocks/shares is surely a much more sensible route? And don't some investments give annual dividends that you can live off (rather than compounding the interest)*? In which case, there's no point even if I did want a 'paycheque'...

Pathetic offer LBS, must try harder!

Alixandrea

*No, I don't really understand how investment works, I've never earned enough to be able to have a go at it! ;-P

typistretired

As you get older 10 years seems a long time. Average of £33 gross interest per month. No I will not be applying for one of these accounts.

kidmugsy

If one in a retired couple is a non-taxpayer, it might appeal. You could play tricks e.g. put the monthly income into a regular saver that pays a higher rate and spend the money annually when that saver matures. Ten years is long: how would the account compare with an Immediate Vesting Personal Pension as a source of income for an elderly non-taxpayer?