Money in current account

LesleyMatt

Evening all. In February this year my husband passed away. We had an endowment, that we found out we didn't need but glad we kept it [long story], which paid off the mortgage and left me with a lump sum of around £24K. My husband also had a private pension that had been on hold for a few years, and they have just deposited £17K into my bank account. Now I have FINALLY sorted out all the finances etc., [Word of warning to all, please, please, please make a will], I seem to have hit a brick wall.

I now have in excess of £40K sitting in my current account. I have a savings account with £6K in and an ISA from last year with the full amount in it.

I have NEVER in my life been in this situation money wise. There are a couple of things that I want to do at home, but this is going to cost £4k maximum.

I know it sounds silly, but I don't know what to do with the money! I know it shouldn't just be sitting there in my current account. I need to speak to someone about best place to save it but I don't want to 'lock it up' indefinitely. My bank keep telling me that I need to sort it out and do I want an account review? But surely they are going to try and push their own 'products'?

Can anyone advise whats the best way to deal with this please.

Many thanks

robatwork

Condolences on your loss.

In the first place before you decide on what to do mid to long term you should get your money working for you. Best place at the moment for safe savings is current accounts.

You can check 100 threads on here recently but Santander, Lloyds, Halifax, Nationwide et al, all offer the best interest rates and you should be able to put 20k in Santander, and various amounts spread around the others. You will need to move money around them with standing orders to qualify for the interest rates.

Then you need to consider your finances in more depth. Do you have a pension? Your age, income, and plans will all come into it. We don't know if you have children and intend to help them with college, cars, house deposits.

Nobody on here can tell you what to do without knowing more, but you are right to be wary of your bank, and you frankly don't have enough to see an IFA.

If you can tell us more about your circumstances then someone here will doubtless give you some great guidance.

LesleyMatt

Thank you.

I have three grown up children, two live elsewhere and one 20 year old still at home.

I am 55, don't have a personal pension. Was self employed for 15 years until I gave up work to look after my husband and help him run his business.

Since his passing, I have continued with his business although I have restructured it and made it a Ltd Company. The monies that were owed from the 'old' Company have financed the 'New' Company. My daughter and I run the new Company and we are both on PAYE. I draw a small wage, enough to get by on.

In 1993 my husband was made bankrupt, he was discharged in 1996 and since then we have lived very frugally and I suppose I have just got used to 'doing without' so having this money sitting there is a bit scary.

Since February I have made a will and taken out a prepaid funeral plan. This is for my own peace of mind, since I know only too well what sorting out stuff is like when there is no will.

Do I have to declare the Pension Payout to HMRC, as I don't know whether I will have to pay tax on it?

Hope this info helps.

xylophone

Do I have to declare the Pension Payout to HMRC, as I don't know whether I will have to pay tax on it?

You should check this with HMRC - is there any on going payment?

Regarding state pension - the single tier legislation has now been passed.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/181237/single-tier-pension-fact-sheet.pdf

My daughter and I run the new Company and we are both on PAYE. I draw a small wage, enough to get by on.

You should sort out a pension for you and for your daughter?

http://startups.co.uk/setting-up-a-company-pension-scheme

LesleyMatt

There is no on going pension from my husbands pension, just the lump sum.

I have been looking at pensions for my daughter and myself. There's one called Nest I believe, that someone has mentioned to me. Trouble is I know nothing about pensions so all this is a learning curve.

Thank you

anamenottaken

robatwork wrote: »

You can check 100 threads on here recently but Santander, Lloyds, Halifax, Nationwide et al, all offer the best interest rates and you should be able to put 20k in Santander, and various amounts spread around the others. You will need to move money around them with standing orders to qualify for the interest rates..

Just to add to this aspect of robatwork's response:

Moving the money around between accounts doesn't have to be by standing orders. It can be done manually in a few minutes each month using the faster payments system. This can be better.

Check that other conditions of the accounts are met too - eg some (like Lloyds and Halifax) require two different Direct Debits to be taken from the account each month if interest is to be paid. In fact, you don't need to keep funds in the Halifax account but you mustn't be overdrawn any day in the month.

planteria

yes, i do it manually. no problem & only takes a few minutes, allowing me to do it exactly as i want, and take account of all payments in & out.

robatwork

OK so you really need to focus on yourself rather than your children.

You can check http://www.moneysavingexpert.com/savings/savings-accounts-best-interest?_ga=1.186218857.1911721059.1320610953 for savings. I would also read/post to the pensions board as this should be your priority.

Moving money around accounts can be via faster payments or SO - depends how organised you are and how much time you have.

LesleyMatt

Thank you for your input folks.

I have just received a Statement from OH Pension Company and tax has been deducted before the payout and they have notified and are paying HMRC.

Will go over to the other forum and have a look at Pensions etc., still trying to get my head around opening various other bank accounts and moving money between them to earn the best interest.

No doubt I will be back soon

kidmugsy

LesleyMatt wrote: »

I am 55, don't have a personal pension.

My condolences and best wishes.



(i) It's likely that when you come to retire your state pension will leave a fair bit of your Personal Allowance against income tax unused. That means that if you contribute to a personal pension, the money you eventually withdraw will be tax-free. That in turn means that a pension is good value, and the new pension laws that apply from April 15 even mean that it won't be hard for you to withdraw the money at short notice if conditions change. There's no hurry; pension contributions go by the tax year, so you've got until about the end of March to make this year's contribution: plenty of time to decide calmly.

(ii) Do get an official forecast of your eventual State Retirement Pension: it's possible that contributing more money to that would be a good investment. (Once you've got the figures people on here can give you some good guidance about your best course of action.)