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kidha

I am saving up to buy a 2nd house as investment in approx 10months time.
This is because I will have some other investments maturing in April 2013 and will have access to more funds.

ISA's are maxed out. Me, Wife & Son
Morgage Overpayment: I am already overpaying on my mortgage (interest rate is 2.54%) and do not want to overpay any more as I am trying to build a deposit for property no 2.
TaxI am a higher tax payer, my wife is standard tax payer.
Debts: None other than Mortgage.
Pensions: We both have pensions. Paying in 20% - 25% each. We keep increasing this by 1% every year. Happy with this for now.
Shares: We have a decent amount invested in Shares too. Shares ISA as well as some outside the ISA.
Cash reserves: We have cash reserves for emergency / redundancy etc.
So I am looking for Low Risk (not shares) to keep our savings in for approx 10months

So far, I have the following setup (all under wife's name) as she pays standard tax:
Sant (2) £40,000
BOS (3) £15,000
LLoyds (3) £15,000
Nationwide (4) £10,000 (unsure if the other 3 accounts will give me 5%)
Total £80,000

I need advice on two items please
Easy Access Savings:
I have £20k more to invest - which are the next best savings accounts ? I heard I could put some in my son's name but need to ensure interest is less than £100, otherwise will be taxed.

Regular Saver
I have £2k coming in every month which I need to put in some sort of regular saver/s ?

Although the savings above are generating interest of 2.4% (Net after tax), I am aware that it is .14% lower than my mortgage interest of 2.54% and I could theoretically save a bit more by overpaying the mortgage even more. Cautious on doing this as our objective is to maximise the deposit for 2nd house.

Additional Info
The purpose of the 2nd property is absolutely to spread the risk.
The hope is that it provides rental income when we stop working in approx 30 years. We will look to overpay the mortgage budgeting for repairs etc. Have already worked this out btw. In about 15 (optimistic) to 25 (pessimistic) years time, the mortgage will be paid off and hopefully the rental income is not too bad (yes there is risk).

Herbalus

kidha wrote: »

2) I have £2k coming in every month which I need to put in some sort of regular saver ? Please advise

http://www.nationwide.co.uk/savings/instant_access/regularsavings/introduction.htm?intcmp=Intcmp_1692 will do £1,000 a month at 2.5%. Also the newcastle BS regular saver ISA will do 3% for £500 per month. Halifax kids regular saver does £100/month at 6%. Barclays do 3.25%/month for £250.

ffacoffipawb

kidha wrote: »

Halifax (4) £10,000 (unsure if the other 3 accounts will give me 5%)

Do you mean Nationwide here?

I can't see any Halifax accounts paying 5%

kidha

ffacoffipawb wrote: »

Do you mean Nationwide here?

I can't see any Halifax accounts paying 5%

You are right, sorry - I will correct my post. :eek:

btw - any suggestions for other accounts ?

Archi_Bald

kidha wrote: »

btw - any suggestions for other accounts ?

One of the more obvious things missing from your list are ISAs for both yourself and your son.

However, it's not clear from your posts whether you need the cash anytime in the short or medium term, whether you have any mortgage or other debts, and/or whether you have started making pension arrangements for yourself. Nor do we know anything about your attitude towards risk. It's therefore very difficult to make other suggestions apart from "read through the forum".

kidha

Archi_Bald wrote: »

One of the more obvious things missing from your list are ISAs for both yourself and your son.

However, it's not clear from your posts whether you need the cash anytime in the short or medium term, whether you have any mortgage or other debts, and/or whether you have started making pension arrangements for yourself. Nor do we know anything about your attitude towards risk. It's therefore very difficult to make other suggestions apart from "read through the forum".

thanks Archi Bald, I have updated the original post with more info. sorry - new on posting...:o

Archi_Bald

kidha wrote: »

Cautious on doing this as our objective is to maximise the deposit for 2nd house.

Thanks for providing more info. I might be wrong, but it seems you may have made a (all eggs in one basket) decision that investing in property, in the form of a second house you own (and let?), will be your best investment choice?

This may be a right decision, or a wrong decision - - you can tell in 20 - 40 years time. Very high risk strategy because you seem to be focusing singularly on one form of investment. What if it goes tits up?

There might be lots of other options, incl reducing your and/or your wife's tax liability by investing in pensions.

I think your best bet would be to find a good IFA and pay them for giving you bespoke, professional advice, taking into account all your current assets and liabilities, as well as your likely future earnings and requirements. IMO, you would be downright foolish if you made any firm financial decisions based on the opinions of a bunch of strangers on a random Internet forum.

kidha

Archi_Bald wrote: »

Thanks for providing more info. I might be wrong, but it seems you may have made a (all eggs in one basket) decision that investing in property, in the form of a second house you own (and let?), will be your best investment choice?

This may be a right decision, or a wrong decision - - you can tell in 20 - 40 years time. Very high risk strategy because you seem to be focusing singularly on one form of investment. What if it goes tits up?

There might be lots of other options, incl reducing your and/or your wife's tax liability by investing in pensions.

I think your best bet would be to find a good IFA and pay them for giving you bespoke, professional advice, taking into account all your current assets and liabilities, as well as your likely future earnings and requirements. IMO, you would be downright foolish if you made any firm financial decisions based on the opinions of a bunch of strangers on a random Internet forum.

Thanks for your note Archi, . I will provide more info and add this to original post too. Newbie - so bear with me.

Pensions: We both have pensions. Paying in 20% - 25% each. We keep increasing this by 1% every year. Happy with this for now.
Shares: We have a decent amount invested in Shares too. Shares ISA as well as some outside the ISA.
Cash reserves: We have cash reserves for emergency / redundancy etc.

The purpose of the 2nd property is absolutely to spread the risk.
The hope is that it provides rental income when we stop working in approx 30 years. We will look to overpay the mortgage budgeting for repairs etc. Have already worked this out btw. In about 15 (optimistic) to 25 (pessimistic) years time, the mortgage will be paid off and hopefully the rental income is not too bad (yes there is risk).

so.. back to my original ask any suggestions for low risk

Easy Access Savings:
I have £20k more to invest - which are the next best savings accounts ? In addition to the ones I already have?

Regular Saver
I have £2k coming in every month which I need to put in some sort of regular saver/s ?

Thanks

Sanj

Archi_Bald

Bung it into Premium Bonds and hope you'll win something before you need the money in 10 months time.

As to "next best savings acct" and/or "best Reg Savers" - have a look round on main site and forums, there's plenty of suggestions.

kidha

Herbalus wrote: »

will do £1,000 a month at 2.5%. Also the newcastle BS regular saver ISA will do 3% for £500 per month. Halifax kids regular saver does £100/month at 6%. Barclays do 3.25%/month for £250.

Thanks Herbalus.
:money: