savings advice

Al.

Well, I wouldn't put it in a single account if it was the Bank of Damascus, no. If it was a UK bank, for a couple of months, if it was me..? Yes, I would. I know that it breaches the FSCS code, and I'd advise a client to split it accordingly in real life, but I have enough faith in our banking system to not worry for a month or two. I know that's not the textbook answer but honestly, I'd want to forget about it asap. Going around a dozen or so banks, opening accounts would be my idea of living hell. Like I said, wrong answer, I know! I'd probably split it three or four ways before I lost my temper.

How I'd invest it though.. now you're talking!

eskbanker

Al. wrote: »

Well, I wouldn't put it in a single account if it was the Bank of Damascus, no. If it was a UK bank, for a couple of months, if it was me..? Yes, I would. I know that it breaches the FSCS code, and I'd advise a client to split it accordingly in real life, but I have enough faith in our banking system to not worry for a month or two. I know that's not the textbook answer but honestly, I'd want to forget about it asap. Going around a dozen or so banks, opening accounts would be my idea of living hell. Like I said, wrong answer, I know! I'd probably split it three or four ways before I lost my temper.

Why wouldn't you put it in NS&I, safer and more convenient?

atush

yes, 1.2M in a current acct with guarantees for only 75K wouldn't cut it.

OP, use NSI,

colsten

Al. wrote: »

Yes, I would. I know that it breaches the FSCS code, and I'd advise a client to split it accordingly in real life, but I have enough faith in our banking system to not worry for a month or two. I know that's not the textbook answer but honestly, I'd want to forget about it asap.

If your confidence in whatever UK bank was misplaced, how would you explain to your client that they have just lost £1.2m minus £75K or £85K, when they could have put the money into a perfectly safe NS&I account?

Though I suppose the OP would be covered for £1m for up to 6 months because the sum is from a "temporary high balance".

All worry is so easily avoided by just going with NS&I whilst the longer term decisions are being mulled over.

Al.

eskbanker wrote: »

Why wouldn't you put it in NS&I, safer and more convenient?

Ok, I’ll amplify. For myself, no.. I wouldn’t bother splitting it up into lots of different bank accounts. Partly because I do trust the UK banks and for a month or two, I’d happy with it (what I would do for me, I wouldn't always - hardly ever maybe?! - suggest for a client. But aside from that, right now, I’d want to be agile.

This week saw a US Treasury sale with an almost unprecedented level of demand for T-Bills. Demand for them usually rises as the end of a quarter (Christmas!) approaches because banks and financial institutions gravitate towards highly liquid short term assets to make balance sheets look healthy.. so I’d want to capitalise on benchmark 10 year notes of 2.2% (on Monday they were, anyway).

Same with BoE Certificate of Deposit. Not great, but they can be traded and they are ‘safe’. I wouldn’t always suggest it for a client though. Complexity isn’t always needed. I'd want to be light on my feet, flexible, agile and simple.

http://www.bankofengland.co.uk/boeapps/iadb/fromshowcolumns.asp?Travel=NIxAZxI3xSCxSUx&FromSeries=1&ToSeries=50&DAT=RNG&FD=1&FM=Jan&FY=1963&TD=23&TM=Sep&TY=2015&VFD=Y&CSVF=TT&C=OT&Filter=N&html.x=22&html.y=17

and3r5on

Thank you all for the advice. My head is spinning a little. My plan is to just see ifa to have things explained in a little more detail. Its not as simple as I first thought ��

Al.

colsten wrote: »

If your confidence in whatever UK bank was misplaced, how would you explain to your client that they have just lost £1.2m minus £75K or £85K, when they could have put the money into a perfectly safe NS&I account?

Though I suppose the OP would be covered for £1m for up to 6 months because the sum is from a "temporary high balance".

All worry is so easily avoided by just going with NS&I whilst the longer term decisions are being mulled over.

See my answer, just now. What I would appreciate as suitable for me wouldn't always be what I'd do for a retail client, hardly ever. For starters, my compliancy god wouldn't stop hitting me over the head with a big stick.

The Banking Code and FCA guidance does allow for the short term parking amounts of money, such as compensation or lottery wins, whilst a client considers his/ her options.

edit: as you have posted!

colsten

Al. wrote: »

See my answer, just now.

You haven't actually answered my question. You have just repeated that you are confident in UK banks, and you have quickly added the £1m FSCS protection as an afterthought (when prompted).

But never mind, I suppose we have shared our respective opinions with the OP. At least 4 of us have suggested NS&I for complete peace of mind. One of us suggests a bit(?) of spice by putting faith into any of the UK banks. It's for the OP to choose but I am a little disappointed that an IFA didn't even mention the NS&I option. Nobody is perfect

kangoora

If you currently earn £21k before tax then with that sum you should be able to comfortably retire on circa double that income for the rest of your life and even have a pretty good chance of passing the same amount to any children even after adjusting for inflation.

Depending on how much you want to spend on a car/house etc.

Please make sure you see an IFA from https://www.unbiased.co.uk and not a tied agent such as a bank adviser.

grey_gym_sock

atush wrote: »

In the meantime, put all the money (less the amt to pay off debt plus a five thousand as emergency cash) into NSI and start getting some interest.

specifically, i'd suggest parking most of the money in NS&I Income Bonds - http://www.nsandi.com/income-bonds - that is 100% secure (because NS&I is backed by the UK government), pays a bit of interest (1.25% per year, paid monthly), and you can take the money out again whenever you want to. actually, the maximum you can put in that is £1m, but that secures most of the money.

Your pension will only pay out a small amt if you put a small amount in it. So this year you can out in up to 21K (incl tax relief and employers contributions) but you will also be able to put in the last 3 years unused allowances. So what % of your slary goes in each month from both you and your employer? If you top it up, you should be able to shelter up to 80K of the money.

to be pedantic, that's not quite correct: with £21k salary, you can only put £21k in pensions this year, not £80k ("carry forward" is only useful to ppl earning over £40k, who can use it to put more than the £40k "annual allowance" in pensions, but still can't contribute more than their current year's earnings) ... but don't worry about that: that kind of tax detail is something an IFA an advise on.

the main things an IFA can advise on are:
how to use tax shelters, i.e. pensions and ISAs; and
how to invest money (whether it's in pensions or ISAs or neither) to make more money.

IFAs won't be able to advise on what kind of home to buy (though hopefully they would suggest the idea of buying a home), so that's something you'll have to work out.

note that most IFAs will offer an initial chat for no fee, and will then tell you what their charges will be if you decide to use them. these can vary quite a lot, so it is worth posting on here about what they want to charge, so ppl can tell you whether you're being overcharged. i'd suggest not signing anything agreeing to use an IFA before doing that.