House Fund

scarleyt

Hello, I’ve recently received an amount from inheritance. It’s larger than the savings per bank £85k (I know I’m super lucky - I had a smart gran). I’m looking to buy a house with this later this year,but I want to protect it for the time being. Especially given the current situation. Given that I want to buy a house in the short/medium term I would prefer to keep it in one place, as that’s what the estate agents/lenders require. But how do I protect myself from losses? Is the government bank NS&I the most logical place for my nest egg?
thanks

Alistair31

In short; Yes.

eskbanker

No harm in putting it in NS&I but you are protected for up to £1m for up to six months under the FSCS temporary high balances provision, so don't be too heavily swayed by the normally applicable £85K limit: https://www.fscs.org.uk/how-we-work/temporary-high-balances/

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/ has other options....

bowlhead99

a) there's no way your lender requires you to have the full £85k in one bank account, several months ahead of using the funds. You can pool in into one place nearer the time. They know as well as you do that once your temporary 6 month protection from having a high amount in one place due to inheritance runs out, amounts over  £85k don't benefit from FSCS protection in bank or building society accounts unless you're in the process of actually carrying out an identified property transaction (rather than simply looking to buy a house later in the year). In the meantime you could store it in £84k chunks around banks that pay better rates than NS&I.

b) NS&I are the only place with guaranteed protection over £85k, and their monthly income bonds or direct saver accounts pay 0.7%pa after the rates drop next month. You could do better elsewhere, but it depends if you can be bothered shopping around for those better rates and splitting it up. An extra half a percent on an £85k chunk of money for six months is a couple of hundred quid. So depending on how much you have, you could put most of it in NS&I and then use one or two other accounts as well.

MovingForwards

The money does not have to be in one account, mine was spaced across five.

Before transferring the money to your solicitor, transfer it all to one account, then on to the solicitors (that was the advice I received from my solicitor, different firms may have other opinions).

eddddy

scarleyt said:

Given that I want to buy a house in the short/medium term I would prefer to keep it in one place, as that’s what the estate agents/lenders require. 

For anti money laundering checking purposes, your solicitor (and possibly the estate agent) will want to check that you got the money legitimately.

So it's fine to have the money in multiple accounts, but you might have to show a paper trail of receiving the inheritance and transferring it into those multiple accounts.

i.e. bank statements that show the transfers leaving one account owned by you, and arriving in other accounts owned by you. But that should be fairly straightforward.

george4064

Stick it in NS&I.