savings advice

atush

Al. wrote: »

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

It is more than a month or 2 'til new year'. Wasn't that your advice?

To park it til January? Losing all that interest? And being unsafe the entire time?

Still poor advice.

Al.

GGS,

RPSM06105030 [Section229(3)(a) & (4), Section279(1) refers.

http://www.hmrc.gov.uk/manuals/rpsmmanual/rpsm06105030.htm

One or two useful exemptions to being penalised by breaching the annual allowance.

atush

grey_gym_sock wrote: »

to be pedantic, that's not quite correct.

Yep was expecting a pedant, so thanks for offering.

atush

and3r5on wrote: »

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 ��

But do open an NSI acct ASAP to get it safe, and to start receiving interest.

Al.'s advice for unsafe current accts that dont pay interest should not be entertained.

MrRee_2

£1.2million isn't that much really ...

Buy a £900k property and invest the £300k change into a BTL property.

Live off the income from the BTL - should be around £18k a year and work the hours you want.

Bricks and Mortar is where the money should sit .... it has always been the best place.

Archi_Bald

MrRee wrote: »

Bricks and Mortar is where the money should sit .... it has always been the best place.

Is that why you keep tens of thousands in cash yourself? (ref http://forums.moneysavingexpert.com/showpost.php?p=69217343&postcount=76)

Why would you advise that anyone should have all their eggs in the property basket?

bigadaj

MrRee wrote: »

£1.2million isn't that much really ...

Buy a £900k property and invest the £300k change into a BTL property.

Live off the income from the BTL - should be around £18k a year and work the hours you want.

Bricks and Mortar is where the money should sit .... it has always been the best place.

Ignorance is such a wonderful thing.

grey_gym_sock

i think most posters have agreed that the advice to the OP is that an IFA's advice should include a bit about pensions ... so the following is just for anybody interested in the technical details:

Al. wrote: »

RPSM06105030 [Section229(3)(a) & (4), Section279(1) refers.

http://www.hmrc.gov.uk/manuals/rpsmmanual/rpsm06105030.htm

One or two useful exemptions to being penalised by breaching the annual allowance.

the issue here is not the annual allowance charge. it's a different rule which limits tax relief to contributions equal to the current year's earnings - see http://www.hmrc.gov.uk/manuals/ptmanual/ptm044100.htm#IDAF10KF :

The maximum amount of contributions on which a member can have relief in any tax year is potentially the greater of:

• the ‘basic amount’ - currently £3,600, and
• the amount of the individual’s relevant UK earnings that are chargeable to income tax for the tax year.

...

Unused tax relief can no longer be carried backwards or forwards to other tax years.

i.e. you can contribute more, but you don't get tax relief on the excess. usually, it won't be worth contributing more without the tax relief.

atush wrote: »

Yep was expecting a pendant, so thanks for offering.

sorry, but i wasn't offering to buy you any jewellery

Al.

grey_gym_sock wrote: »

.. the issue here is not the annual allowance charge. it's a different rule which limits tax relief to contributions equal to the current year's earnings - see http://www.hmrc.gov.uk/manuals/ptmanual/ptm044100.htm#IDAF10KF :

i.e. you can contribute more, but you don't get tax relief on the excess. usually, it won't be worth contributing more without the tax relief.

It is! Or rather, it can be. Depending on the rather exacting personal circumstances, think about the pros and cons of estate planning with money in a pension wrapper.. regardless of the tax relief. Hence my technical referral. The benefit to the client isn't the tax relief, it's the potential pros and cons of the wrapper for estate planning in light of recent legislation.

grey_gym_sock

Al. wrote: »

It is! Or rather, it can be.

yes, it can. but that is the exception. and the OP certainly wasn't asking about how to avoid paying inheritance tax.