Best Saving of Lump Sum for 16 months

techdesigner

Hi everyone,

First time poster, long time lurker! Long story short I am looking to invest £140k for 16 months between now and January 2021 - when I will need to pay all of this, plus a current shortfall of £25k to the government in tax (hence the question 'how can I capitalize on having this sum temporarily). I would love to say this is a result of making money, but sadly its a result of buying stock in the company I work at, and as a result, owing LOTS to the government, based on the speculation that the company I work for will go public in the next few years. I'm super lucky to have the stock, but it's a gamble!

Anyway Questions -

I have between now and Jan 21 (16 months) to earn as much from that £140k as possible. Here's what I've figured out so far, would love any thoughts on this -

Option 1. I've looked at high interest savings accounts that are fixed for a year, and in total they would net around £2,500 max. But given that I'm a higher rate tax payer, I assume i'd lose a lot of that to tax too...

Option 2. High interest savings Plus Premium bonds £50k - I've also looked at Martin's great write up on Premium Bonds, but skeptical as to how lucky I am!

Not sure what else is viable short of investing into things that could go up or down, and given that I will owe the government all this money come jan 2021, i'm not eager to do anything risky.

Question - Am I legally allowed to give part of the lump sum to my wife for any investments that are restricted to the 'individual' for example - savings accounts that guarantee 85k protection by govt 'per individual' or Premium Bonds that let you put in up to 50k per individual. How does this work please?

Thanks in advance!

george4064

You are able to give any money to your wife for tax efficency purposes, its completely within the law so you should do that.

Putting the max £50k in a NS&I is probably worth it, especially with the tax free element.

I would recommend you consider fixed-rate accounts since you know you won't need the cash before Jan 2021. You can review fixed rate accounts here: https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/#fixedsavings

I also would like to highlight the £85k FSCS protection per financial entity, keep this in mind with your accounts. Note that the protection is available for both you and your wife as separate individuals.

techdesigner

Hi George, thanks so much for the reply!

So given your advice and from reading up on the link you shared, seems like its worth doing something like -

1. 50k NS&I
2. 85k (protected max) into a Sharia acct like BLME via Raisin
3. 5k into a further saver we then add to each month

That sounds sensible?

george4064

Sounds fine, remember you can share the savings with your wife to take advantage of the best interest rates available.