Where to put 2k ?

jimjames

Rufaz wrote: »

So now I am thinking to put it all into P2P lending or start a S&S ISA

If you have no need for the money in the medium term then a S&S ISA would certainly be an option if you have emergency funds already in your cash ISA. You can then choose investments that meet your risk profile

coyrls

jimjames wrote: »

If you have no need for the money in the medium term then a S&S ISA would certainly be an option if you have emergency funds already in your cash ISA. You can then choose investments that meet your risk profile

I know everyone is keen on promoting S&S ISAs but I wouldn't recommend them to somebody who is earning under the tax threshold. I would start by getting rid of the notion that £50 a month into Premium Bonds is an "investment", make sure your Ratesetter lending is for the lowest period, so that it is relatively liguid and research savings accounts for the highest interest rates that will accept your credit score. Once you have built up a sufficient buffer of savings, then you could look at a S&S ISA. Personally, for somebody who is self-employed, I wouldn't regard £2,000 as a sufficient savings buffer.

Also an ISA wrapping for cash has little to no value if you are not paying tax and from next year you will have a £1,000 interest allowance and a £5,0000 allowance for interest above the personal allowance and so I would just look for an account that will accept you and that pays the highest interest.

jimjames

coyrls wrote: »

I know everyone is keen on promoting S&S ISAs but I wouldn't recommend them to somebody who is earning under the tax threshold. I would start by getting rid of the notion that £50 a month into Premium Bonds is an "investment", make sure your Ratesetter lending is for the lowest period, so that it is relatively liguid and research savings accounts for the highest interest rates that will accept your credit score. Once you have built up a sufficient buffer of savings, then you could look at a S&S ISA. Personally, for somebody who is self-employed, I wouldn't regard £2,000 as a sufficient savings buffer.

Also an ISA wrapping for cash has little to no value if you are not paying tax and from next year you will have a £1,000 interest allowance and a £5,0000 allowance for interest above the personal allowance and so I would just look for an account that will accept you and that pays the highest interest.

Completely agree about cash ISAs. S&S ISAs are worthwhile in my view regardless of current tax status as they keep all investment protected from cgt as well as income tax regardless of future income changes.

I'd read it as the £2k being additional and the Op already has sufficient savings they are building each month but obviously if that's not the case then emergency fund should come first. Op was the one who mentioned s&s ISAs as an option but yes it's not a sensible idea unless the basics are sorted first.

Rufaz

Hi All,

Thanks for your thoughts,

coyrls wrote: »

I would start by getting rid of the notion that £50 a month into Premium Bonds is an "investment".

The £50 a month in PB's I don't see as an investment, I just see it as a bit of fun with a chance of winning something, I don't do the lottery I do PB's instead!
Yes my ratesetter in lending out monthly.

jimjames wrote: »

I'd read it as the £2k being additional and the Op already has sufficient savings they are building each month.

Yes JimJames you are right, the 2k is spare right now, and I have no future plans for it, so it can be locked away long term.

masonic

Rufaz wrote: »

Yes my ratesetter in lending out monthly.

Hmm, the monthly market is only yielding about 3.5% at the moment, so you aren't really getting an adequate reward for risking your capital. You could open a Leeds BS 3% regular saver and pay in £250 a month for the first 8 months and then reduce to £50 and that way gradually reduce your exposure to ratesetter over the year, while losing out on very little interest.