Really need some help (and short of time)

Jaguar_Skills

Hi all,

I really need some help with my finances. I recently got a fairly substantial bonus at work (part salaried part commission based) but I am going travelling on 3rd July for a year and a half and I really have no clue what to do with my money.

I think I may buy into my Gfs flat but that is only like 12k worth since she has a limit on overpayments (I am checking this with my solicitor this week).

Breakdown of current savings etc:

Current Acc Santander 123 - 25k
Fixed Rate ISA Santander - 16k
HL S & S ISA - 3k
HL F & S ACCOUNT - minimal as lost 2k on this.

So the bonus I am going to be getting is £42,500 before tax, which I think is about 25k. I am just not sure what to do with this money and I really have no time

I wanted to put deposit down on a flat but thats not going to happen before I go.

Please help.

Jaguar_Skills

Just to add I haevn't put anything in to HL S & S ISA his year so can do that plus top it up to £15k on 1st July?

Jaguar_Skills

Anyone?

RickyC_IFSWP

Yes putting the money in an ISA would be wise as it is tax-free and you can always decide what to do when you come back.

The caveat is clearly that if you put all £15k (from 1st July) into your S&S ISA, you have to be aware that it could have fallen when you return. Alternatively, you can just deposit £15k in a Cash ISA from 1st July, and keep the rest in a savings account until you return. This latter option seems wisest to me and you wouldn't be making a rash decision (and is also less stressful too!).

bowlhead99

We don't have a clue what you want to do with the money either.

Sure, you could buy 10k-worth of your girlfriends flat off her and put 15k in an S&S ISA, whether with HL again or with someone else.

However, in a previous post on the exact same subject you had said that when you come back from traveling you might use your cash for a deposit on buying a place. So if you want the money back in less than two years' time it doesn't seem like either locking it up in investments (which could lose a large percentage in a two year period) or tying it up in someone else's flat, is very sensible.

So, if you are just looking for somewhere to stick it at the last minute, in the next 3 weeks or less, it seems like you should just be looking at cash options.

If you are travelling around for the forseeable future, you probably don't want to use one which will give you a promotional interest rate on the first few thousand subject to meeting lots of ongoing terms and conditions.

And you probably don't want to use one which starts off with a slightly higher interest rate for the first year and then drops to virtually nothing after 12 months, because you will be traveling at that point and may find it a hassle to go looking around for the best rate to move it (and opening new accounts at that point will be difficult if you're not a UK resident then)

So, that eliminates some of the better options for a 20-odd thousand cash deposit. You might be best off just sticking it in a fixed term deposit to get it back in 18 months or two years from now -just deal with it then.

As you mention, the ISA allowance increases to 15k on 1 July so you would have two days to stick it in an ISA product before leaving. Perhaps just look at using Santander so you don't have to bother messing about with opening new accounts and getting all the paperwork and online logon details sorted while trying to tour the world. The ISA rates might not be quite as good as cash rates but it buys you some flexibility: if you decide to not go ahead and buy a place with your cash when you return, you will have more total ISA space if you've used this years' allowance as well as the 2016 one.

Presumably you are going to be using some of the bonus money, or some of the existing money in your savings accounts, to get through your life while travelling without an income? On your other thread you said you might pick up some work while travelling but only in the last year of it and I guess you'll be burning cash in the meantime. So, if you don't know exactly how everything will pan out (and maybe you don't have a 100% guarantee on the job you'd come back to), best not to commit all your funds into shares or someone else's flat.

Finally you mention you think £42.5k is 25k after tax. That's normally about right for a high rate taxpayer paying a bit of NI as well. But it depends what tax bracket you are in this year, with your changed circumstances.

For example, you might normally be earning £120k p.a. and normally paying 40% on new income above that. But this year you have only worked 3 months which is only £30k, and by the time you knock off £10k annual personal allowance that's only £20k of salary and a bit of interest income being taxed in 2014/15. A big chunk of your bonus would then be at lower rate tax. Of course, depending on how they work the PAYE and NI deductions for you, and whether you end up earning money on the other side of the world in 6 months time, you might pay more tax now and need to claim it back later.

AlwaysLearnin

Personally I'd be chucking a good amount in to a pension, but I have no idea if our circumstances/objectives/timelines etc are even remotely similar.

Regardless, I'd put £5k of the Santander 123 balance somewhere else, as you're not getting any interest on the amount over £20k, and I'd be looking at a Halifax Clarity credit card to take on your travels.

robatwork

Buy some gold coins, and give them to your girlfriend.

This will ensure she is still your girlfriend when you return.

gadgetmind

Is this like butter on a cat's paws?

innovate

robatwork wrote: »

This will ensure she is still your girlfriend when you return.

you got a lot of confidence in girlfriends left alone with a bunch of gold coins!

Jaguar_Skills

Thanks for all your replies all (even the gold coins one).

I am preparing for a hearing today but will go through in detail when I get a chance. Thanks a lot.

robatwork

innovate wrote: »

you got a lot of confidence in girlfriends left alone with a bunch of gold coins!

If she spends them and !!!!!!s off then she was never a keeper. Or if she keeps them nice and shiny and doesn't swap them for shoes...she's the one.