What to do with current £40k savings plus £1000 a month

bouicca21

Not sure about the etiquette of jumping in on this one, but I have a similar but slightly larger sum to play with. Already have several current accounts, including Santander 123, have just retired and am pretty sure I can live on my pension (been practising) and have made just about all the capital purchases I need for the foreseeable future. I've stuck money away to pay for my funeral.

I will probably want access to some of my capital to enable some travelling. I'm very definitely risk averse.

enthusiasticsaver

If you are considering stocks and shares isas you could transfer your cash isas to one so they don't lose the tax free wrapper. Read up on monevator, trustnet etc. You need to decide your appetite for risk and look for well diversified funds (either managed or passive). Personally I went for a Vanguard LS60 multi asset global fund and transferred 2 cash isas into it earlier this year and am now investing £500 per month into it as the rates are so poor on cash isas.


I would keep some of your lump sum in high interest current accounts. I have 2 Santander 123s, a Nationwide and a TSB one. I know the Santander 123 has fees (£2 now and £5 from January) but if you maintain the maximum of £20k in each account and get cashback on direct debits I have still found it worthwhile for the simplicity factor rather than opening 8-10 current accounts.


I would also look at overpaying on your pension and possibly your mortgage depending on the rate you pay.

Sam_J12

If you are considering investing in a stocks and shares ISA, I would recommend a cheap S&P 500 tracker. The US market tends to outstrip the rest of the world in terms of growth, the S&P 500 is highly diversified across sectors and represents over half of the global market. ETFs tend to be better than mutual funds in terms of liquidity and costs so I would recommend either the Vanguard or Ishares S&P 500 ETF (little to choose between them) over a mutual fund. I think there is little to be gained by buying stocks in the rest of the world as the US economy is highly correlated with the rest of the world anyway and growth is higher in the US. Don't bother with bonds as these will only decrease your long term growth expectation.

colsten

bouicca21 wrote: »

Not sure about the etiquette of jumping in on this one, but I have a similar but slightly larger sum to play with. Already have several current accounts, including Santander 123, have just retired and am pretty sure I can live on my pension (been practising) and have made just about all the capital purchases I need for the foreseeable future. I've stuck money away to pay for my funeral.

I will probably want access to some of my capital to enable some travelling. I'm very definitely risk averse.

You should probably open a separate thread as your situation is vastly different from the OP - they are 30 years old, with young kids and a mortgage, and are still working, so their risk profile and their requirements are almost certainly totally different to yours.

Thrugelmir

Sam_J12 wrote: »

as the US economy is highly correlated with the rest of the world anyway

The US is an insular market.

Sam_J12

Thrugelmir wrote: »

The US is an insular market.

What is an "insular market"? I Google it and could not find a definition for that. The part of the text you quoted from me is true though - the US market is highly correlated to the rest of the global markets so there is little point diversifying outside of the US, unless you think this will give better returns.

JT1000

Thanks for all the replies.

I'm currently opening current accounts and moving money accordingly.
Just a quick question, my wife has an ISA account with nationwide. When we go into branch and ask to close the account do they then provide you with a cheque for the amount in due course? Also does that money then have to be paid into another account in my wife's name?

Thanks

colsten

If your wife has a current account with them, they should be able to transfer the closing balance into that current account there and then.

JT1000

Unfortunately she doesn't have a current account with them, only the ISA.

MDMD

JT1000 wrote: »

Unfortunately she doesn't have a current account with them, only the ISA.

Then she should be able to open a FlexDirect, put the ISA money in there and get 5% up to £2,500. She can then move anything left on to somewhere else.