What to do ith £100K

Greg1010

Hi All, my first post on here but I've been thinking I should seek some advice from this forum.

My girlfriend and I have accumulated £100k in savings, we currently have it split in 2 savings accounts that offer instant access and a 1.3% apr of interest.

We want to keep it semi easily accessible and also very (very?) low risk.

I can't help but think we could be doing something different with it to make it work for us a little more.

Many thanks in advance for any replies.

Greg

Archi_Bald

What are your plans for the money?

What tax rates do each of you pay?

How old are you?

What financial commitments do you have (mortgage, loans, credit cards, children etc)?

What pension arrangements do you have?

Greg1010

Hi Archi, thanks for taking the time out to reply.

What are your plans for the money?

Save more really, maybe use £10K to set up a small business.

What tax rates do each of you pay?

One pays 40%

The other is based offshore currently on a very low tax rate.

How old are you?

Both 35

What financial commitments do you have (mortgage, loans, credit cards, children etc)?

None of the above

What pension arrangements do you have?

None

redux

There are some threads here about higher interest from certain bank accounts at certain balances, such as 3 to 5 or 6%. You could have one each and a joint version of some of these.

Start thinking about pensions, especially for the one paying 40% tax.

Maybe consider other gradual investments in equities, but don't rush in if you still want to have quite a bit of cash available, as you may risk having to sell at an inopportune moment when the market is down a bit.

Archi_Bald

OK, based on your answers I would say your highest priority should be to make some provision for your old age - perhaps in the form of pensions (SIPP, company pension). Then perhaps buy a place to live in unless you have one (or two?) already.

Depending on how soon you want to spend your money, keep the remainder in cash or invest it. If you want to spend it in the next 5 years, keep it in cash. Check out the Savings link at the top of the page to get started.

heytoki

Greg1010 wrote: »

My girlfriend and I have accumulated £100k in savings, we currently have it split in 2 savings accounts that offer instant access and a 1.3% apr of interest.
Greg

i would go for Santander Bank 123 bank account.

you can have one on your name (20K), one on your girlfriend's (20K) and i think, but not sure you can open a joint account (another 20k).

So you would get 3% on 60k.

As you need quick access to the money i would go for Premium bonds with the rest of the money

Ryan_Futuristics

In a sense, the only way to be certain of losing money is to keep it all in cash

This is what happens to it:


Couple of Santander accounts, with the monthly fees, top tax bracket(?), 1.8%-ish

If I was cautious, I'd be thinking:
50% cash (earning whatever measly rates it can)
10% P2P lending (earning 6-10%)
20% stocks & shares funds (7-10%)
20% absolute return funds (4-8%)

So you could be looking at just under 5% interest (£5k/year) before taxes (move £15k/year into S&S ISAs)

Worst case scenarios:

- stock markets tank - you'd lose 5% (but get it back if you waited)
- P2P lending platform gets wiped off the map - lose 5% (if you use at least 2 platforms)
- absolute return funds all underperform - gain less than cash savings

Realistic worst case: you'd probably still be better off than cash

Just my 2c

atush

Archi_Bald wrote: »

OK, based on your answers I would say your highest priority should be to make some provision for your old age - perhaps in the form of pensions (SIPP, company pension). Then perhaps buy a place to live in unless you have one (or two?) already.

Depending on how soon you want to spend your money, keep the remainder in cash or invest it. If you want to spend it in the next 5 years, keep it in cash. Check out the Savings link at the top of the page to get started.

I completely agree with Archi.

think about pensions and a place to live. Keep 10K for the business plus a safety net in cash. Put this is high paying current accts, int he name of the lower taxpayer if poss.

If you dont want to buy right now, i'd put half that money in cash and half in your S&S isa allowance.

Greg1010

Hi All, thanks for the replies so far.

The T's and C's for the 3,2,1 seem a pain and having banked with them before we have vowed never to let our money pass through them again.

Ryan's splitting idea seems a good route to investigate, I guess wanting it to all be in one place whilst having it make the most of itself isn't something that really exists this day in age....?

We are homeowners and mortgage free so the finding a place to live isn't an issue. Linked to this factor is the not having pensions as a high worry/desire to pay into for the immediate future at least.

Any more advice or suggestions greatly appreciated.

colsten

Greg1010 wrote: »

The T's and C's for the 3,2,1 seem a pain and having banked with them before we have vowed never to let our money pass through them again.

I suppose you are referring to the Santander 123 current account? If so, the terms couldn't be simpler and tons and tons of people here use it with no problem at all. But fair enough, you might want to stick to your principles. There are other banks that offer interest paying current accounts but I reckon they will all appear to have painful terms (even though they don't). I would say that these current accounts are definitely less 'pain' than P2P lending.

colsten

Ryan_Futuristics wrote: »

Worst case scenarios:

- stock markets tank - you'd lose 5% (but get it back if you waited)
- P2P lending platform gets wiped off the map - lose 5% (if you use at least 2 platforms)
- absolute return funds all underperform - gain less than cash savings

Not sure why it's worst case max 5% loss on equities and on P2P. You need to explain this further.