160k Advice please, where best to save post April 2016

Midlander01

Hi All,

Would really appreciate your advice on how best to maximise a friends interest on their £160k savings after the April 2016 tax reforms.

Currently all savings are with one provider in the following accounts (have already advised this is bad form and breaks Martins golden rule on spreading money re:75k protection):

Approx £105,000 in ISA (1.5% interest)
Approx £20,000 in Regular saver (2% before tax)
Approx £35,000 in Loyalty account (1.2% before tax)

They're a single first time buyer so guess HTB ISA would be first port of call and splitting their existing ISA lump sum the second but after that Im out of my depth! (Just to add I'm unsure of regular income but would think easy access is needed so fixed rate savings prob not an option).

Thanks in advance for any advice.

jimjames

Are they looking to buy a house with it? If so, over what sort of timescale? Presumably with that sort of amount in an ISA they've been saving for 15 years plus? Are they intending buying soon?

HTB ISA will be very little use for those numbers as you can only add £1000 plus £200pm. Obviously worth doing but will make virtually no dent in the amounts initially.


If they're only in basic savings accounts then moving to current accounts would increase the returns massively.

Eco_Miser

This is one of the few cases where leaving the money in a cash ISA is appropriate, since the high interest accounts can't take £160k. But the accounts at that link can take over £50k, or £130k for a couple, at 3%-6% AER., and of course a Halifax HTB ISA if your friend is a first time buyer.

colsten

I would permanently have kittens if I had more than £75K with a single provider. It's not "Martin's golden rule" to keep within the FSCS limits, it's just common sense and makes sure you aren't at risk of losing some of your money.

Midlander01

Thanks for the replies guys. I think the simplest advice I've worked out when I see them tomorrow is-


-Of the current 105k in a 1.5% ISA, leave 35k there and add 15k in April
-Transfer the other 70k to State of India 5 Year ISA at 1.6% (presuming early access may be needed eg house purchase)

-Of the remaining cash, transfer 20k to Santander 123 at 3%

-This leaves 20k- which they could deposit in the best current account (or recycle through the accounts linked in post 3)

This probably doesn't max the interest fully but looks relatively straightforward and addresses the FSCS limits?

Thanks again in advance for any advice, much appreciated.