money to save and no idea what to do with it!

wallofbeans

Hello All,

For the first time in my life I'm making some money and want to do the best thing with it. I work freelance so regular work is not guaranteed but I've been doing one thing regularly for the past year (and still going) and have saved up a chunk of money.

I've still got the bank account I opened when I was a student and haven't even thought about changing accounts or moving money somewhere else until now.

I'm a little overwhelmed with the options and nervous about putting it in the right place to make the best of it but still have access to it if needed.

I'm thinking a decent high interest current account might be the first thing to do. And then maybe put some in NISAs?

Any help?

I'm happy give more details if that will help give me the right advice!

Thanks!

xylophone

Have you started a pension?

Certainly look at the interest paying current accounts and how to use them to your best advantage.

colsten

ISAs/NISAs should only be of interest if you can afford the investment versions, i.e. can put your money away for 5-7 years upwards. The cash versions are a waste of money for literally everyone.

Without knowing your age, the assets and the amount of money you have now and that you expect to have in the future, your attitude to risk, your existing and forthcoming financial commitments, your spending plans, your tax band etc etc, it is impossible to say anything that you can't read on websites and in books and papers.

ajdj

colsten wrote: »

The cash versions are a waste of money for literally everyone.

Wow, really? I wouldn't have quite phrased it like that!

Agree with the fact the OP needs to provide more info though...

jimjames

ajdj wrote: »

Wow, really? I wouldn't have quite phrased it like that!

Agree with the fact the OP needs to provide more info though...

Maybe explain who you think they are suitable for? I cant think of many categories where that would apply.

wallofbeans

xylophone wrote: »

Have you started a pension?

Certainly look at the interest paying current accounts and how to use them to your best advantage.

No. I work freelance and always have. I have not made enough money to save until right now. I didn't even know I could have a pension as a freelancer.

wallofbeans

colsten wrote: »

ISAs/NISAs should only be of interest if you can afford the investment versions, i.e. can put your money away for 5-7 years upwards. The cash versions are a waste of money for literally everyone.

Without knowing your age, the assets and the amount of money you have now and that you expect to have in the future, your attitude to risk, your existing and forthcoming financial commitments, your spending plans, your tax band etc etc, it is impossible to say anything that you can't read on websites and in books and papers.

I'm mid 30s. I own my house. I have around 20k in my current account and counting. But freelance means this growing income might stop at anytime. Or it has potential to get bigger. I can't say 100% that I will be making the same money I am making now in a months time.

I want to make the most of the money I have as I don't know when I might need it.

Does this help any?

atush

You need an emergency cash buffer. Of at least 3 months savings. then look at S&S isas for longer term savings. Once you know your approx income per year, open a personal pension.

Are you paying your SE nics?

chile_paul

In my personal opinion I'd make sure I had a hefty amount in a nice interest paying Current Account (e.g. Santander 123) that earns you the maximum possible interest. This should cover 3 months living costs as your emergency buffer. Anything extra would then be split between a Cash NISA (the money that you know you might need within the next couple of years for big purchases etc) and then anything that you're convinced you won't need for 3 years+ put into an S&S ISA (check Martin's pages to understand how these work) with a low cost platform i.e. iWeb and choose a tracker fund that has a low (<0.25%) annual charge.

NB. Cash ISA's are not a waste of time if you've used up any capacity you have to be earning good rates of interest in a current account and if you're not willing to take the risk of your investment going down in value in an S&S ISA. I currently have my savings split 40% current account / 20% Cash ISA / 40% S&S ISA for this reason.

Archi_Bald

At current interest rates, cash ISAs are a total waste of time and money if you have got less than £51,500, and if you are planning to spend the money in the next 3-5 years. £51,500 is the amount you can spread across 3, 4 and 5% current accounts. In addition, you can also feed some Regular Savings accounts which pay 4 and 6% AER.

wallofbeans

atush wrote: »

You need an emergency cash buffer. Of at least 3 months savings. then look at S&S isas for longer term savings. Once you know your approx income per year, open a personal pension.

Are you paying your SE nics?

I think so. I definitely used to be! I'll have to check!