What to do with £40K?

Si_Clist

I have been mooching round the forum trying to pick up some clues on what best to do with our savings but I'm getting nowhere, so ...

My wife and I are not taxpayers, our mortgage is paid off, and if it makes any odds, I'm 70. Our only income now is my State pension plus a private pension of £50 a month (!) Can somebody please point me to whichever thread(s) will help me decide where best to put £40,000 of savings?

Thank you

worried_jim

Stick it all on Dusty Carpet in the 14:40 at Kempton, it's never been beaten.

soulsaver

Try a little more in-depth mooching at Nationwide, TSB, Tesco..

..should be able to get £12k at 5% plus another £12K at 3% for c. 1 year and maybe £500 in referral rewards. You'll need to do some research to find direct debits if you've not got enough... there's a starter for 24..so ... get on yer bike..:)

richardlionheart

Hi

Perhaps have a chat with a local independent financial adviser ?


Or buy a share in a racehorse! That could be fun !!!

Cheers
Richard

El_Torro

What do you want this £40k to do? Generate an income? As a rainy day fund?


If it's an emergency fund you should put it in high interest current accounts to maximise the interest.


If you want an income from it you can invest it in funds that specialise in doing that. With £40k I wouldn't expect much more than £130 a month off that, it's more than what you're getting from your private pension at least.

Si_Clist

Thanks folks. It's primarily a contingency fund for unpredictable expenses like new boiler, mobility scooter and/or stair lift come the day one of us needs it, and suchlike.

I'm beginning to get a less fuzzy picture of what's what, but what's with these regular saver accounts that seem to be paying the highest interest? Why do they pay a higher rate if you put £500 a month in, say, than £6000 in one hit?

Can't be doing with "financial advisers", btw.

enthusiasticsaver

High interest current accounts would probably give you the best return or put a proportion in fixed term investment. Premium bonds?

Si_Clist

enthusiasticsaver wrote: »

... Premium bonds?

Our £40K is currently still in Premium Bonds, which have paid us just £325 over the last 12 months. That's why we want to do something else with it ...

stoozie1

5 years worth of paying £2880 into a SIPP and getting £720 a year from the treasury?

soulsaver

stoozie1 wrote: »

5 years worth of paying £2880 into a SIPP and getting £720 a year from the treasury?

.....each... and in addition to post #3...

FB13

You might want to think about creating a bond ladder. This will provide you with some liquidity for cash, give you better returns than keeping it all in an easy access account and protect you if interest rates increase in the future. When one of the bonds matures each year, use the money to either top up the easy access account and/or reinvest in a new 5 year bond.

Maybe something like this:
10k (or whatever you feel comfortable with) easy access to cover emergencies
6k one year bond
6k two years
6k three years
6k four years
6k five years

This is an American article, but it explains the concept:
https://www.investopedia.com/terms/c/cd-ladder.asp