£54000.00 to put in savings

SueDerbyshire

Hi,

I have read through the information on here time and time again and keep changing my mind as to what to do with my savings of £54,000.00.

I/we currently hold several ISA's, my husband has a Santander 123 account which is maxed out and I am now looking at saving the remainder and receiving as much interest as possible.

We live on pension money and the interest we are currently getting, which did include 3.85% on the £54,000. I need to move this money as soon as I can as I am currently getting 0.50% on it.

This was what I was thinking, opening 2 Nationwide Flexdirect accounts, 4 TSB Classic plus accounts, totalling £13,000, following the link about 5% savings loophole on here. Then I was thinking of opening a Santander account in my name, I pay Tax though, my husband doesn't, that's another £20,000. finally, placing the remainder £21,000 in NISA's on the 1st July.

Do you think this is the best way of distributing our money to achieve the best available interest?

We use this money as our holiday money, so the more we get, the more holidays we go on.:beer:

Any help or advice would be much appreciated.

Sue

Archi_Bald

You will get worse interest, even after BR tax, in any ISA than in current accounts, as you know. Instead of putting your money into ISAs, you could open more current accounts - e.g. a Club Lloyds each, a joint Club Lloyds, a joint 123 etc.

Vortigern

SueDerbyshire wrote: »

I was thinking of opening a Santander account in my name, I pay interest though, my husband doesn't, that's another £20,000.

I think you meant to say that you pay tax, and your husband doesn't.

That being the case you could open a joint 123 with hubby and reclaim the tax paid on his half. Santander would possibly allow him to register for gross interest on his share of the account. AFAIK they don't use HMRC Form R85, he just has to tell them he's a non-taxpayer.

You could also add joint accounts with Nationwide and TSB to get more cash at 5% and avoid half of the tax.

SueDerbyshire

Yes, you are right, I meant to say Tax, I have interest on my brain!

The joint accounts sound like a good idea, it just seems a lot of messing about, all these accounts needing money transferring in etc. I think a joint Santander account is a good idea.

I just tried opening a Santander account in my name but when I add my incomings, pension etc. It states that I have less incomings than outgoings, which I don't have, not sure why it is saying this. it's never simple. I'll get there though.

Thank you for your help.

Sue

Archi_Bald

SueDerbyshire wrote: »

I just tried opening a Santander account in my name but when I add my incomings, pension etc. It states that I have less incomings than outgoings, which I don't have, not sure why it is saying this.

It's a problem caused by you using a decimal point. Just use full pounds only.

gadgetmind

For how long do you need this money to keep paying for holidays? Because of inflation, both the capital and interest will be worth less each year, and could even have half the buying power in 10-15 years.

I know it's a big step, but switching at least some to income oriented Investment Trusts should be something to at least consider.

poolforever

With that amount of money I'd seriously consider Premium Bonds.

SueDerbyshire

That's great, thank you for your help. I tried everything apart from deleting the decimal point grrr. I shall give it a go.

Archi_Bald wrote: »

It's a problem caused by you using a decimal point. Just use full pounds only.

SueDerbyshire

I'll be honest, I haven't looked at income oriented Investment Trusts or Premium Bonds before and shall have a look into them.

The only requirement I need, is to gain interest on my money which allows me to continue with my current lifestyle. The remainder of the balance will hopefully be available to our children when we depart this lovely land.

Thank you all for your help.

Sue

gadgetmind

You need to know three things about Investment Trusts -
1) This is investing rather than saving. If you suddenly decide you need to move back to cash, you could see a loss as capital values fluctuate.
2) Income is in the form of dividends rather than interest, so there is no more tax for a basic rate tax payer.
3) These dividends rise over time to (hopefully!) track inflation, and the ITs keep a dividend reserve to ride them over lean years.

There are many ITs around but City of London is one of the oldest.

https://www.henderson.com/ukpi/fund/169/the-city-of-london-investment-trust-plc

Your situation (need income, ideally rising with inflation, and with preservation of capital/income over multiple decades) is exactly what such ITs are designed to provide.

Cash savings can't generally provide this but you do need to understand the differences between saving and investing.

jimjames

poolforever wrote: »

With that amount of money I'd seriously consider Premium Bonds.

If income is a priority I certainly wouldn't consider premium bonds at all especially if you are a non taxpayer or even basic rate.

You can get a massively better income with the other options mentioned BUT it all depends if the capital may be needed or if the only requirement is to get the best income you can.