Confused

jack_tyler

Advice needed please.......I have £20,000 in a savings account. The money was the remainder of a death benefit that was paid out after my husband died (altogether there was £54,000 but I used some to pay my mortgage off). Anyhow what I want to know is, do I use some of my said savings to pay off a few debts. I have a loan with NatWest that has approximately 2.5 yrs to run and would cost me approx £4,800 to clear including 58 day interest charge, I have a credit card also with NatWest, with an outstanding balance of £895.00, I also have 2 other credit cards, with an outstanding balance on each of approx £1,000 and thats it.
I know most of you will be screaming at me to pay them all off, its just that I dont like the thought of using that money. You see, I dont work, and my only form of income is a widowed parent benefit and child benefit......so I wont be able to rebuild the £20,000 I have in my savings account, so I just dont know what to do???

Also this money is currently sat in a savings account with NatWest and from what I can gather, I dont seem to be making much in the way of interest. I have just checked this account on line and on the 1st Oct 2014, interest was paid in of £55.71, and the next time interest was paid in was 2nd Jan 2015 of £21.42. In fact since the account was opened on the 5th June 2014, I have only had 3 amounts of interest paid in.....the 2 I have mentioned above and a previous one to them of £18.78 on the 1st July 2014, so I would also like advice on whether I should move this savings money to another account? and which account is best for me?

many thanks
Tracy

DCFC79

Right re 20k look at opening a Lloyd's account that pays 4% and other accounts too that pay a decent %, martins done a guide on the best accounts its called, its under the banking section that's along the top. I'd pay the debt off that has the highest Apr.

ViolaLass

How are you paying the loans at the moment? You could pay them off and rebuild the £20k using the money you would have used for the loans.

It's very unlikely your loans are on a lower interest rate than your savings so you are giving your money away. Or, to look at it another way, you're paying to have money in the bank.

There'd be plenty of the £20k left after you'd paid the loans off anyway.

m00se1986

How much interest are you paying on your loan and credit cards? It is likely to far outweigh any interest you will earn by keeping the money and not paying them off.


Pay off the cards and just keep the accounts open if you like the security of having the money available in an emergency.


(Sounds like this was the answer you were expecting).

jack_tyler

thanks very much for the quick replies. The loan is currently being paid via my current account. Every month I transfer the amount needed for the monthly payment, from my savings to my current account and the money is then taken from that.
As for the savings accounts, please could you tell me which one I should be looking for. Im sorry but im quite thick when I come to these things

ViolaLass

jack_tyler wrote: »

Im sorry but im quite thick when I come to these things

If you want the best return on your money, pay the loans and credit cards off.

You could always keep the credit cards for emergencies.

lee111s

As above, pay off the debts and rebuild the savings from whatever income you have.

boo_star

jack_tyler wrote: »

thanks very much for the quick replies. The loan is currently being paid via my current account. Every month I transfer the amount needed for the monthly payment, from my savings to my current account and the money is then taken from that.
As for the savings accounts, please could you tell me which one I should be looking for. Im sorry but im quite thick when I come to these things

Then all you're doing right now is reducing the balance in your savings account over time, rather than in one go. And you're paying for the privilege.

Pay the debts off now and find a decent savings account for the rest. Ultimately you'll be better off financially.

Apples2

I agree with the others, you are already paying the debts with your husbands benefit anyway.
Clear the debts whilst you can, it will cost you significantly less in the long run.

Then you can enjoy the absolute tedium of trying to get your savings working for you. It's a chore to get anything remotely decent but even then they come with an "introductory bonus" before the interest rate plummets to 0.5% so you have to keep moving it every year.

Good luck.

dealer_wins

Talk about a banks dream customer. Paying them 10% interest on a loan, while they lend out your savings to someone else at 5-10%

DCFC79

jack_tyler wrote: »

thanks very much for the quick replies. The loan is currently being paid via my current account. Every month I transfer the amount needed for the monthly payment, from my savings to my current account and the money is then taken from that.
As for the savings accounts, please could you tell me which one I should be looking for. Im sorry but im quite thick when I come to these things

Pay the debts off and save what's left.