What to do with savings whilst abroad?

JohnRo

brasso wrote: »

...I'd open a share / investment account and (if you're very cautious) buy some low cost diversified trackers...

It's perhaps worth pointing out that there's nothing remotely low risk about index trackers per se. The regional diversity would help to some extent of course.

atush

I would have opened and filled ISa/pensions before I left.


If not, I'd look into tax free/reduced savings where I am (you don't say so we wont).


If none I'd look a local interest rates, where I expect to be in 5-10-30 years.


And I'd look into an investment acct/brokerage for non wrapped tax status. and invest in GBP equities


No point in saving in cash these days outside of immediate and emergency needs.

dean350

You have 10K now and over 4 years you will progressively add another 48K which you will use for a house deposit.

I would be wary of putting this into the stock market. You may be lucky and have your investments increase when you want to sell them in 4 years time. However, you may be unlucky and lost say 20% of your savings when you want to withdraw them. Stock markets are for those with a 5-10 year horizon and who won't be materially hurt by a sudden 20% drop in the market.

The only other option that hasn't been mentioned here is somehing like Zopa. Its not as safe as a bank account and you have to be careful with the timing of getting your cash out but you could direct a proportion of your money here. The rest could go to offshore bank accounts in Sterling but these pay very low rates.

The best advice is probably to save as hard as you can whilst you are overseas and take advantage of the fact that you may not be having to pay high local taxes.

brasso

JohnRo wrote: »

It's perhaps worth pointing out that there's nothing remotely low risk about index trackers per se. The regional diversity would help to some extent of course.

Fair point. It was lazy of me to just say "index trackers", and I apologise. It was meant as shorthand for passive investment in a diversified range of funds / low cost ETFs. You're 100% right that any form of stock market investment is more risky than cash. But unless one has a very short time horizon, the risk of doing worse than low interest cash savings is not that high IMO.

dean350 wrote: »

You have 10K now and over 4 years you will progressively add another 48K which you will use for a house deposit.

I would be wary of putting this into the stock market. You may be lucky and have your investments increase when you want to sell them in 4 years time. However, you may be unlucky and lost say 20% of your savings when you want to withdraw them. Stock markets are for those with a 5-10 year horizon and who won't be materially hurt by a sudden 20% drop in the market.

Remember that the OP talked about saving for a minimum of 4 years and then "one day" using the savings for a house deposit. This may well correspond to the 5-10 year period you mention.

As always, choice of investment depends on the individual's appetite for risk. But I just don't think that risk is that high in a situation where someone is drip-deeding 48K into the stock market over a minimum 4 year term, and has no specific date in the calendar when they have to sell everything. If the markets dip during that 4 year period, they will be buying stocks at a low price, and will yield higher gains when they recover.

Yes, you can lose as well as gain. Many of my stocks lost more than 20% in 2008/9 but then recovered again fairly quickly. There again, my investments were up around 20% last year alone. But as long as I don't have a ring around a certain date in the calendar, I don't feel very threatened by some volatility.

badger09

dean350 wrote: »

The only other option that hasn't been mentioned here is somehing like Zopa. Its not as safe as a bank account and you have to be careful with the timing of getting your cash out but you could direct a proportion of your money here. The rest could go to offshore bank accounts in Sterling but these pay very low rates.

The best advice is probably to save as hard as you can whilst you are overseas and take advantage of the fact that you may not be having to pay high local taxes.

I don't know about the other P2P/P2Bs but at Zopa you must be UK resident to lend
http://help.zopa.com/customer/portal/articles/1103738-who-can-lend-at-zopa-

badger09

atush wrote: »

I would have opened and filled ISa/pensions before I left.

Agreed, but not everyone is as organised as you

My son is currently living & working in Hong Kong, and his initial 12 month secondment has been converted to a permanent HK contract, so he's non resident from the date he started.

He filled his cash ISA before he left (in July 2012) but 'didn't get around to' opening a S&S ISA :mad:. I'm hoping Santander will allow him to transfer his 2 year Major ISA into something with a reasonable rate in May. If not, from my research, he'll struggle to find another provider of either Cash or S&S ISA to accept a transfer.

atush wrote: »

If not, I'd look into tax free/reduced savings where I am (you don't say so we wont).

Savings interest rates in HK are even lower than ours:(
So is the tax rate though

atush wrote: »

And I'd look into an investment acct/brokerage for non wrapped tax status. and invest in GBP equities

That's the plan. I'm visiting him next month and this is firmly on our agenda.

atush wrote: »

No point in saving in cash these days outside of immediate and emergency needs.

Agreed, but many people have absolutely no experience of investing -and don't even understand the difference between investing and saving. The realisation that inflation is destroying the purchasing power of many years of hard work and saving came late to me I'm trying to ensure that my son doesn't make the same mistake.

lisyloo

No point in saving in cash these days

True but some people do need to appreciate that the majority of great unwashed don't even understand the basic concepts of investing.
Unfortauntely these people can't just go to the finance industry because they'll have a reasonable chance of getting ripped off e.g. endowments, pension mis-selling etc.

bmouthboyo

Thanks for the advice guys, much more complicated than I anticipated. I am currently in Thailand where the volitility of the government etc would make me anxious having all our savings over here. For peace of mind having the Savings UK side is a must for us, as well as the company I work for paying part of the Salary into UK, part local. The UK part we do not touch and is our savings.

My wife and I have only literally just got out of debt from university etc, nothing major just the usual 0% interest credit card, a car loan etc. In the UK I paid into a very good work pension but this is only for government work when in the UK so no option to pay into it now. We never had any savings so although I understand the difference between savings and investment I have never had cause to really research into it all that much.

Can anyone recommend a source to start reading up on basic investment knowledge. Like a simple guide to get introduced?

Archi_Bald

bmouthboyo wrote: »

Can anyone recommend a source to start reading up on basic investment knowledge. Like a simple guide to get introduced?

Try this https://forums.moneysavingexpert.com/discussion/4752194

RetiredInThailand

Open a savings account with a UK bank that accepts non-residents and takes form R105 (which allows you to get your interest paid gross). The Indian banks are a good place to start looking as they pay comparatively high rates, but other banks are also suitable.

If you want something more adventurous then use part of those savings to buy ETF trackers in lots over a period of time, ideally following drops in value of the index you are tracking. This will minimise your costs. You should be able to find an online UK broker that will have you without much trouble.