Cash in bank after house sale

snollygoster7

Looks like I'll be selling my house and withdrawing from my purchase (and moving in to partners rented place). There's going to be a big chunk of cash in the bank for 6/12 months...now I don't understand the economies of the country but is there any realistic danger that cash can be effectively seriously dwindled down if the £ becomes worthless or something else like the country collapsing ? I did say I don't understand a country's economy !

 I suppose if that does happen then house prices are equally affected ? 

Almost everyone on here is saying proceed with your sale if the buyer is still there at the moment which makes sense as it puts you in a strong buying position, but what IF cash becomes "worthless", is the money better in bricks & mortar ?

Thanks
Snolly

dani17

During crisis , cash is the king. if we reach a stage that the £ is worthless, you will have much bigger problems than the cash you have in the bank  . Now, if you have more than 85k £, split the money into diffrent bank account ( make sure that if the bank collapsed , your money will be protected.

ImThatGuy

As dani17 said. If cash becomes worthless then the situation has gone south and you won't worry what it's worth. If you're really worried about that then start stocking up on tinned food and learn how to hunt. Doomsday Preppers would be a good show to watch.

 

AdrianC

If the bank goes south, the normal £85k protection from the FSCS is increased to £1m for up to six months.
https://www.fscs.org.uk/how-we-work/temporary-high-balances/

If you're asking if you're protected against inflation, then - no, the spending power of the money may well increase if inflation outstrips the interest you earn. Which, tbh, is almost a cert in a bank account.

If you're asking about protection from currency risks, then - you're not exposed to them. Your savings are in £, you spend £s in this country.

If you're asking about the balance being reduced because of losses or falls in the stock market or whatever - no. Bank accounts don't work like that, but putting the money into an investment product might.

davidmcn

snollygoster7 said:

 IF cash becomes "worthless", is the money better in bricks & mortar ?

Only in the sense that you'd have somewhere to live. It won't really have value in the normal sense (unless you're going to barter it for looted toilet rolls or something).

Getting_greyer

AdrianC said:
If you're asking if you're protected against inflation, then - no, the spending power of the money may well increase if inflation outstrips the interest you earn. Which, tbh, is almost a cert in a bank account.

Purchasing power decreases in that scenario.  Though I think MPC forecasted CPI near zero for foreseeable. 

25_Years_On

At least you might still be able to buy a loaf of bread.

theartfullodger

Let me look after it for you.  It will be 100% safe and better interest rate than any bank.

Promise, you have my word!

greatcrested

If the £ becomes worthless, what you'll need is a vegetable garden, some hens, and ... a gun. Society will break down.

If you're worried about inflation, and the buying power of your savings, well yes, you'll earn 0.5% interest on your cash in a bank, and inflation (price rises) will be 1% or 2% so instead of having enough to buy 9000 jars of coffee, you'll only be able to afford 8950.

If you're worried about the bank you put the £ in going bust, the government will compensate you up to £1m in the 1st 6 months after selling your house, and £85K after that (see AdrianC's link above).

Or you could invest in the stock market. Longer term, this is likely to earn you more than a bank savings account, but is more risky. The value of your investment could go down. That's why it's a long-term (5+ years?) option as that gives time for it togrow, and a better chance of being able todecide when to sell eg when the vaue is high.

snollygoster7

The only thing I'm worried about is being out of the property market which I haven't been for 30 years ! The plan would still be to buy but would wait for the right place. Appreciate you can't always get the timing right.

Just a friend mentioned what if the £ becomes worth a penny but I don't really know what he meant !!

Jeepers_Creepers

I asked for similar advice on here for my mum-in-law when she sold her house. The advice was to put it in the NS&I - government-run income bonds/savings account. 
It was good advice. The interest rate at the time was also pretty decent, tho' - in common with all banks - it's fallen a bit now. But, your money is also 100% safe.
The interest is paid to your normal tied account - the actual sum in the NS&I doesn't change. You can, tho', add to and withdraw from it at will.
Your money won't become devalued or anything like that - can you imagine the complete destruction of the economy if this were to happen?! You will be in a very strong place to buy your next property in the near future, and quite possibly at a discount.