Where do people keep a lot of money?

curtis122

I'm married no children, no mortgage as that was the first focus in paying that off. We have a rental property and my husband has a stocks and shares ISA. I like a balance between saving for the future but not at the expense of the 'now'


I've never been keen on adding lots to my pension as I do not mind longer term investments but I like to be able to get it if I needed it, once in a pension its locked in till retirement. I like to have my money when I want it.


Each of these 'Regular' savers when they mature I have to then start thinking where will I put the money, some can go back to funding another one but over time we will start to have a lot more left over. Currently I feel our only obvious option is putting it in our 1.5% cash ISA to make use of the allowance each year and add more to the Stocks & Shares one.


To be honest we don't know enough about investing to fully understand what we are doing the S&S ISA was a bit of a guess which we have been lucky with..so far!

Alexland

curtis122 wrote: »

I've never been keen on adding lots to my pension as I do not mind longer term investments but I like to be able to get it if I needed it, once in a pension its locked in till retirement. I like to have my money when I want it.

If you intend to get old, then what's the harm locking it away if it's going to be needed later anyway? Overall a nice retirement is very expensive. Most people with this sort of money think ahead and make suitable provisions via appropriate tax advantaged wrappers.

Alex

DiggerUK

Your mortgage gone, scope to upsize if you want to, and savings, your life looks good.
You are unlikely to keep up with inflation on your savings interest, but as you have 'living for now' expenses then the instant access is handy.

I support your reservations about pensions, but retirement planning is important. Digger Mansions has all of our retirement savings in gold, a decision we don't regret. Gold does have a 5 to10 year 'hold' before the risk of getting less back withers away, but our experience is that we have made the right decision. Depends what funds you will have available to lock away for that time. UK legal gender gold coins are also VAT and CGT free. Best of fortune..._

https://moneyweek.com/463616/the-best-ways-to-buy-and-sell-gold

steampowered

Most people with money behind them with be investing. Cash savings accounts are suitable for short term savings, they aren't a good idea for large sums of money over the longer term.

As much as possible into S&S ISAs and pensions, with the rest into share accounts.

Some people will invest into buy-to-let properties which suits some and is an acceptable alternative only after S&S ISAs and pensions have been maxed out.

curtis122 wrote: »

I've never been keen on adding lots to my pension as I do not mind longer term investments but I like to be able to get it if I needed it, once in a pension its locked in till retirement. I like to have my money when I want it.!

That's a nice mindset to have, but your point of view does have a financial cost. If you are a higher rate taxpayer, a pension gets you 40% tax relief.

I appreciate not wanting to put everything into the pension, but you shouldn't be needing the full £300-600k; and you are going to need to live in retirement.

she_ra_1

Hi,
I used to use regular savers until the interest rate went to around 4% - this made it not worth the effort to me.
I also have multiple accounts which offer a monthly 'reward', and those with slightly higher interest rates on a  set amount. The 'reward' has decreased to where I was considering closing the accounts and now the interest rate on the current account has decreased to a little over 1%. I shall be closing all of these accounts now and moving my cash. Some of the cash will pay off a 0% interest credit card I was stoozing, the rest I need to look into, but some may pay for my main annual holiday. The reward accounts were useful for a time because I had an ISA with the bank with an amount which allowed for registration in the bank's prize draw. Having been with the bank nearly 30 years and having won £100, it's not really beneficial to remain in low interest accounts. It's become that the effort it takes to maintain the accounts outweighs the benefits for me. 

Therefore my accessible cash does need to find a new 'home' (which is what brought me here).
I like to keep a decent amount of accessible cash for if I need it (which is different for everyone - perhaps a months wages, this gives me time to close an account that takes time, or requires notice).

So, beyond that amount money could be tied up in a variety of places:
- over pay some of my mortgage (having some mortgage improves your credit rating if this is something you want to do, and I may want to move to a more expensive property and my mortgage rate is 0.5% over the base rate)
- stocks and shares ISA (either purchase your own shares or have a bank directed fund- but factor in their charges)
- second (or more) properties to rent (with associated costs)
- increase pension contributions (not available to everyone, depends upon your pension)

I personally won't be adding to my pension. I shall be restricted to only being able to draw out of the pension when I reach pension age - and who knows what age this will be increased to. Yes, retirement age will creep up to us all before we realise it, but if I need that money, or I want to splash it due to my health deteriorating then I want to be able to do that. My back up is my house, which is why I may move house, but this may not be something that people who have made their family home their own etc. will want to do. I love my home and it would be a wrench but it's an option. This, or buying a second property means you can sell (relatively) when you want to, whether this is when you retire, or earlier. Again, this is a personal opinion, 

Freecall

Brian65 said:

Government statistics counted things like DVD players, whilst ignoring housing costs.

DVD players?  Yes, I remember those.  Happy days.