advice please!

1327

As someone who's very new to the world of investments, I would value the advice of those more experienced.
Two years ago I inherited £100,000 from my father's estate and placed it with Abbey in an esaver account, purely because I have a current account with them and it was easier. I know I should have shopped around but, there we go, at the time I had other things on my mind.
Am I right in thinking that I'd be better off elsewhere, if so where and how much should I keep in one account, in the light of the Norther Rock fiasco and the information that only £35,000 of my money will be guaranteed should the bank of my choice encounter problems? Also, my partner suggests that I avoid internet only accounts as when the Northern Rock thing happened customers who had internet only accounts couldn't get to their money.
Any advice/suggestions very welcome!

Aegis

First of all, the chances of a bank going insolvent are fairly slim. It's only happened a couple of times in the last few decades, and those were not exactly high street banks.

Second, look at the situation now. A popular bank starts looking shakey, and the government steps in with the Treasury to back all of the savings that customers had in order to save the company. In the event of future problems, they'll pretty much have to do this again now that they've set a precedence.

Thirdly, internet only accounts are generally very good, but if you want to feel secure, keep only £35k in each online-only account so that it will be safe even if you can't access it.

Finally, with £100 you might want to consider investing, or at least utilising tax-free saving options from various providers. If you have an ISA already, great, otherwise get one. If you are a higher-rate taxpayer, consider NS&I's index-linked savings certificates (tax free). If you have a fairly relaxed attitude to risk, consider putting some of your money into asset-backed investments (unit trusts, OEICs, investment trusts, gilts, bonds, etc) as these will generally offer a much better return than a simple savings account over several years.

Of course, if you need the money soon, ignore my last comments

Flex13CMP

Hi,

If you are looking for a safe place to hold your money have you thought of offshore jurisdictions such as the Isle of Man (probably one of the safest in the world). Depending on your future plans it can be very beneficial to hold an offshore investment bond with the likes of Skandia or Friends Provident and have access to a wide range of investments or bank deposits.

It's worth noting that the investments within the bond grow tax free whilst held and are only taxed when you withdraw the money.

I agree with the above though, Bank of England shot themselves in the foot when they agreed to cover the bank. They have shown that for the big banks they will bail them out.


Regards