Making my money work better for me

gregj2209

Hi All

I'm not massively savvy with savings so am looking for a bit of advice. I've got roughly £25k dotted between a cash ISA that has easy access and some e-saver accounts that were used for different things and I still put money into each month.

Some of it is tagged for upcoming maternity leave cover, say £5k of it and I'd like to leave a decent lump of it with quick access in case of emergencies, a few £k.

What sort of things would you recommend I look at?

I've also been thinking of paying a small amount - starting at £50 and working out what I can then "lose" each month without lifestyle issues and increase - each month into perhaps a fund for the longer term that maybe tracks global markets. The way I look at something like that is over the long term it will make a big difference in the future (hopefully!).

Much smaller amounts than a lot of those I've been seeing in other threads but my theory is over time I will be adding to them so it will build up.

Thanks in advance :j

eskbanker

Start with the MSE savings fountain article for ideas about what to do with your cash pot.

Once you've got to the point at which you feel you've got enough savings and you're starting to consider investments, pensions are normally recommended as a good place to put surplus money, but in terms of broader investment options the possibilities are endless. Again, usual advice on here would be to start with the likes of tracker funds, there's a recent thread already about I want to start saving/ investing £50 per month..... which covers this ground.

xylophone

Do you have the best current account for your needs? Santander 123 might suit.

With regard to making the money work, you can do better in terms of interest by moving out of cash isa into current accounts.

£2500 into Nationwide Flexdirect (5% for a year- transfer elsewhere after that time), £2000 into TSB Classic Vantage (5%), £5000 into Lloyds Club, (4%) and the balance into Santander 123 - you need to cycle money around/make sure DDs are set up where required but the return is worth the effort.

See thread referenced above re regular investment.

gregj2209

Yep, I have the Santander zero account, which works for what I need as a day to day account.

With regards the use of current accounts for savings to take advantage of high interest rates; you have to put in £500 / month to the 123 account I believe? Does this have to stay in there? I.e. if I moved say £5k in and then put £500 / month in but took it back out again do I still get the interest rate? Over the next 12 months or so monthly savings will effectively stop to cover maternity leave.

xylophone

You cycle round the money to fulfil the account conditions - and don't forget DDs where required.

The money simply has to enter the account- you can move it out as soon as it has been in.

Read account terms and conditions.

The Santander 123 would be a better option perhaps for your everyday needs?

If you need DDs, you can open one Tesco internet account and one Tesco Instant Access saver, both of which allow you to set upp DDs to pull money from other accounts.

So then, let us say you open a 123, make sure you have the required 2 DDs, and deposit your £25,000.

You make sure that you understand the "monthiversary" system that Santander operate.

You open a Classic Vantage with TSB, making sure to set the account to paperless statements and correspondence. You transfer your £2000 from Santander.

You open the Lloyds Club. You transfer your £5000 from Santander. You make sure you have 2 DDs.

You open the Nationwide Flexdirect. You transfer £2500 from your Santander.

Each month you then transfer £1500 from Santander to TSB, from TSB to Lloyds, from Lloyds to Nationwide, from Nationwide back to Santander.

When the Nationwide offer ends after a year, transfer out the £2500 to Santander and perhaps take advantage of the switching offer of another bank.

Re bank interest for this tax year https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/293747/Fact_sheet_template_-_10__tax_9.pdf


From April 2016 http://www.thisismoney.co.uk/money/saving/article-3000721/Budget-2015-Chancellor-scraps-tax-1-000-savings-income.html

http://www.theguardian.com/money/2015/mar/23/cash-isas-pointless-savings-revolution