Best saving for £50k

BlueChris

Hi,
In the fortunate position to have sold a property., and as a result have £50k as profit.
So, this begs the questions.
1. Where to place this windfall, savings wise?
2. Buy another property?
3. Premium bonds?
Having never been in this financial postion before, the savings options seem endless.
Any advice or opinions, would be helpful.
The yearly interest with banks isn't much,and taxable.
The premium bonds option is a safer gamble, possible low return.
The property reinvestment, could be hassle all over again.
Any ideas or advice??
Thanks
:money:

Aminatidi

Save or Invest?

2 different things with different outcomes depending on timescale and requirements.

xylophone

You could save...

https://www.thisismoney.co.uk/money/article-1583859/Best-savings-rates-General-savings-Internet-branch.html

You could invest.....

https://www.moneysavingexpert.com/savings/investment-beginners/

You could consider a pension contribution...

colsten

If this is surplus money, ask an Independent Financial Adviser. They will be able to establish your requirements and to advise you accordingly.

DrHyde

When I was in a similar situation I didn't want to go down the route using an IFA: they only charge a lot for outcomes they can't anticipate either. So I decided to drip feed into the stock markets... One by one, to spread the risk of wrong timing:
I parked the money in premium bonds and withdraw an amount every month - ca £1000 for both my wife and I - to put this into a simple low cost ISA with vanguard investor. The remainder of our allowances (IE, £8000 was split in cash and innovative finance ISAs, one with abundance, the other with Ratesetter).
Of course this has downsides but I figured it's a good way to balance likely returns with risk.
I should say that my aim was to save a certain amount by a certain time to be able to buy a bigger property for my family.

AnotherJoe

Then investing in Vanguard or elsewhere is too high risk.

redpete

BlueChris wrote: »

Hi,
1. Where to place this windfall, savings wise?

So you are looking at savings rather than investing? (i.e. with low risk of losing capital)

2. Buy another property?

As you suggest, hassle to manage the property. Also can be difficult to get investment out when you might want/need it. Capital not guaranteed (house price crash?).

3. Premium bonds?

Likely to earn less than the better savings accounts.

The yearly interest with banks isn't much,

True, returns on regular savers or interest paying current accounts are less than even a year ago, and these needsome work to get the best returns and have limited amounts you can get the interest on.

and taxable.

only if you exceed the annual personal savings allowance, first £1000 or £500 (higher rate tax payers) interest is tax free.

Any ideas or advice??

Maybe look at P2P lending for some of the money. Has risks (borrowers defaulting, platform failure) but I'm happy to put smaller amounts in for the higher rates than standard savings accounts. Platforms like Ratesetter with their provision fund or Lending Works with similar mean that you are not dependant on individual lenders defaulting. Others spread your loans across multiple borrowers in different ways. These need some work to ensure that your money remains lent out.
But key questions to ask are how much risk are you happy to take, how long are you happy to leave the money invested, if circumstances change might you need the money out at short notice, are you saving enough for pensions,...

colsten

AnotherJoe wrote: »

Then investing in Vanguard or elsewhere is too high risk.

May be, may be not. From the information provided, we don't know how long in the future the bigger property purchase would happen.

You are raising a very pertinent point though - - risk. None of us here can assess the risk the OP is prepared to assume, unless the OP would share a lot more personal information. I would not expect they would be prepared to do so, but even if they did, most of us here are not qualified to make a proper risk assessment, and in any case, this forum doesn't give financial advice.

The OP is obviously free to follow the ideas of some complete strangers on the internet, just as they are free to ask a qualified professional for their help. At least the qualified professional will carry an amount of accountability for the advice given. I know what I would choose.

Dazed_and_confused

only if you exceed the annual personal savings allowance, first £1000 or £500 (higher rate tax payers) interest is tax free.

There is no "allowance" and taxable savings interest taxed at 0% can, in a variety of different situations, still increase your overall tax liability.

colsten

Dazed_and_confused wrote: »

There is no "allowance"

Like it or not, it is, as redpete correctly stated, called personal savings allowance. What are you trying to achieve by claiming it doesn't exist?

https://www.gov.uk/apply-tax-free-interest-on-savings

Dazed_and_confused wrote: »

taxable savings interest taxed at 0% can, in a variety of different situations, still increase your overall tax liability

Can you provide a couple of worked examples where savings interest taxed at 0% increases overall tax liability?

Dazed_and_confused

Taxable salary £100,000 = only income
Tax due is,
£100,000 less Personal Allowance £12,500 = £87,500
£37,500 x 20% = £7,500
£50,000 x 40% = £20,000
Total tax due = £27,500

Or

Taxable salary £100,000 + Taxable interest £500 = Total taxable income (and ANI in this example) £100,500
Tax due is,
£100,500 less Personal Allowance £12,250 = £88,250
Salary £37,500 x 20% = £7,500
Salary £50,250 x 40% = £20,100
Interest £500 x 0% = £0.00
Total tax due = £27,600

Additional tax due £100.

Has similar affect on Married Couple's Allowance and High Income Child Benefit Charge although the effective tax rate isn't 20%.