Is My Money Really Safe in UK Banks OR Should I rather gamble and buy a property

Emidb

This post is following my previous post about whether to buy a house or wait after brexit. But now that I hear a lot about banks not being the safest place to kee our monies in them, I am now thinking whether to leave my money in the UK Banks (over £700k on which I do not earn any interest because I am not allowed to), OR Should I gamble and buy the property that I have been involved in buying for the past 3 months. The property is in Sutton Coldfield Birmingham and it will be a cash purchase with no mortgage.

I would sincerely appreciate some expert and honest advice on the following:

1- Do you think my money will be safe in the banks (over£ 700K)
2- Or Should I rather gamble and buy that family house for £600k with stamp duty almost £650k) while knowing that house prices are being affected by Brexit.

I am given deadline by the seller's solicitors and agents to make my my mind but I am genuinely stuck and cannot think clearly.

Thank you for your advice in anticipation.

Linton

£700K in a mainstream UK bank is probably safe, though for £700K I would want rather better than probably.

You are thinking of buying a house because you dont know where to park your money - seems a strange thing to do. What will you do with the house? The only safe place for that sort of money is National Savings which is guaranteed by the UK government. However they will give you interest.

Wouldnt you be better off investing the money? Or at least most of it. Do you need it all in the near or medium term future? What is it for?

I assume the objection to interest is religious. You should be able to find Independent Financial Advisors who specialise in this area.

G_M

Property is a) not secure - who kows what values will do post Brexit and b) not liquid - takes months to sell.

if you are worried about banks, try cash, or gold.

marksoton

I certainly wouldn't be leaving £700K in a bank account. If you're not going to buy the house the money should be invested in a wide ranging portfolio.

sheff6107

The problem is getting your £700k out again. An expensive house like that won't be a quick sell.

Talk to a broker. An ultra safe portfolio should give you 3% and a riskier one about 12%. Plus there are options in between.

Try http://www1.sjp.co.uk/find-a-partner

Emidb

Thank you all for your feedback. re:

The only safe place for that sort of money is National Savings which is guaranteed by the UK government. However they will give you interest.

But my understanding is that you are only protected up to £75K?

I have a rather busy life and cannot think of any other investment to spread my money. My financial advisor (pension advisor) only suggest that I put it in my pension or invest in things that I do not know and I do not want to take big risks.

This house that I am talking about, is the house that I wanted to buy some 3 months ago and we have been negotiating on things etc, but then i stopped the process after brexit, so now i am not sure what to do. If i was to buy this h ouse then it will bem y family home at least for another 10 years or so.

But I just do not know what to do.

Emidb

Thank you.

Try http://www1.sjp.co.uk/find-a-partner

this is the very people with whom i have tiedup my pension and I do not want to invest more of my money in pension. Infact, I am not sure if these guys are any safer than banks?

AdrianC

For £700k, you can invest it MUCH more effectively than leaving it in a bank account. Return is directly related to risk and liquidity.

Would you be buying this place to live in? If not, what's the rental yield like? If so, then is it somewhere you WANT TO LIVE?

Why are you "not allowed" to earn interest? Who is stopping you? Or is it just you not wanting to?

AdrianC

Emidb wrote: »

But my understanding is that you are only protected up to £75K?

Per banking group.

If every single banking group goes south, then we're all going to have bigger problems than the FSCS guarantees paying up.

I have a rather busy life and cannot think of any other investment to spread my money. My financial advisor (pension advisor) only suggest that I put it in my pension or invest in things that I do not know and I do not want to take big risks.

So find a better IFA.

St James Place - like every other tied advisor - can ONLY advise you on their own products. They are not independent.

Linton

Emidb wrote: »

Thank you all for your feedback. re:
But my understanding is that you are only protected up to £75K?

...

National Savings is run by the government and so is completely guaranteed, at least as far as anything in this world can be . See here. £75K only applies to banks.

Emidb

Hi Adrian,

For £700k, you can invest it MUCH more effectively than leaving it in a bank account. Return is directly related to risk and liquidity.

Can you please give me an example as I am truly stuck and cannot think much bigger!

Would you be buying this place to live in? If not, what's the rental yield like? If so, then is it somewhere you WANT TO LIVE?

Yes, It is a house we liked and wanted to buy in order to live in as it is bigger and better for my family.

Why are you "not allowed" to earn interest? Who is stopping you? Or is it just you not wanting to?

It is more of a relgious thing, no interest without an investment.