What to do with £200,000

InterestedSaver

Hi, I have £250,000 equity from my house sale and am currently renting.
its in a current account earning 0.1%.
I listened to Martyn on 5live and called in to get advice but he never saw my question.
so here is my question what to do with £200,000 for the next 12 months.
thanks
Ssm 

eskbanker

The FSCS temporary high balances provision protects the full amount for up to six months but after that you'd need to split it into chunks of no more than £85K (or £170K if joint) unless you use NS&I with their poor rates.

Leaving it in a 0.1% account obviously misses an opportunity so go with the leading easy access rates at https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

InterestedSaver

Thanks, at the moment is this the best option? I feel I’m not maximising it at all. 

Sam 

eskbanker

InterestedSaver said:

Thanks, at the moment is this the best option? I feel I’m not maximising it at all. 

You did say 12 months, so if you're prepared to lock it away for exactly that then there are fixed term accounts listed in that article that offer higher rates, but if your horizon is in that territory then you don't really have any other options that spring to mind - what were you thinking of?

Albermarle

InterestedSaver said:

Thanks, at the moment is this the best option? I feel I’m not maximising it at all. 

Sam 

If you try anything else , like investing it , there is a real chance that you will lose a significant % over such a short period . You might gain of course instead but it is a big risk to take over 12 months , which is VERY short  in investing terms.

InterestedSaver

Thank you, I’m looking at 12 months as I think next year I will be looking to buy a house. Hopefully, prices will be more sensible then 🤞

InterestedSaver

Ive no idea what deposits are expected now from lenders … 

CheekyMikey

If your plan is definitely to buy a house by mid 2023, you’d be crazy to do anything other than pop your funds into a few 1 year fixed accounts and get 2% plus.

Albermarle

InterestedSaver said:

Ive no idea what deposits are expected now from lenders … 

Probably you should start to read the 'Mortgages & Homes  ' forums on this website 

aroominyork

It is right to worry that with inflation at 10% your £100k will be worth little more than £90k in a year, but like other people have said this is too short a time period for investing in a risk asset. However if, as you think will happen, house prices fall by the time you buy a property, you will be protected from some of that loss.

sebtomato

aroominyork said:

It is right to worry that with inflation at 10% your £100k will be worth little more than £90k in a year, but like other people have said this is too short a time period for investing in a risk asset. However if, as you think will happen, house prices fall by the time you buy a property, you will be protected from some of that loss.

Even if inflation is 10%, his £100K might still be worth £100K to him...

Inflation at 10% is a very generic concept, where most people will have different circumstances.

Groceries might be worth 10% more in a year's time, but he may not buy £100K of groceries.