Cash isa over £85k what to do?

Magnifyme

HI
I’m nervous to move my cash isa but I know something has to be done, it’s on a rubbish rate and I think it’s over the protected limit.

Any suggestions what to do, how to re invest would be much appreciated, I am very risk adverse so need some security.

Thanks so much in advance.

Vortigern

There was a similar question recently

See:
https://forums.moneysavingexpert.com/discussion/5849520/isa-advice-sought

kidmugsy

Withdraw £50k and put into Premium Bonds (do it this month, as late as you like). The approximately steady flow of small monthly prizes is worth about 1.25% p.a. tax-free. The other 0.15% paid on the fund will go to the lucky winners of the big prizes.

You will have to decide what to do with the balance yourself. A Coventry ISA is offering 1.25% with online access.

Keep_pedalling

What is you long term plan for this money? Cash ISAs are a very poor place to keep long term savings, and this sounds like far too much held in cash unless you have a house purchase on the horizon.

Dazed_and_confused

Depending on what other income you have you could consider the benefits of changing some of the capital from tax free ISA's to taxable accounts.

You can potentially get £6,000 per year of taxable interest (over and above your Personal Allowance) which would be taxed at a 0% tax rate although this reduces the more wages/pension income you have but plenty can still get £1,000 taxed at 0%.

kidmugsy

After you've bought your Premium Bonds, and put some instant access cash aside at somewhere convenient that pays decent interest, consider building a ladder of fixed term accounts. You put one third into a three year account, one third into a two year account and one third into a one year account. In a year's time the one year account matures and you use the money to open a new three year account. Be sure to check the T&Cs to see what the penalties are for early withdrawal.

P.S. Keep pedalling is right.

Magnifyme

Thanks for the advise, very helpful.