What to do with my Inheritance

Dave_5150

£20k in a 2 year fix ISA (4.3%) + £80k in a two year fix (5%) appears to leave you with a little more money at the end after tax than if you place the full £100k in the same two year fix (5%) on an assumption you are a basic rate payer with no other savings using up your PSA. 

Also leaves you with some tax free savings too if plans change, and you don't buy a house in 2 years.

That said I'm no financial advisor and I rushed the maths whilst eating my lunch so you may want to double check my figures!

LexieLou

RobM99 said:

Tricky. The £1400 in a 0.01% ISA (or whatever) must be upgraded. OK it won't earn a lot there, will it?! So can you upgrade/move/add to it (rates below)?

Fixes - hmmm.. interest rates might rise again so it's a gamble. Best I can find are;

2.75 % in easy access for now (taxable so 2.2% after tax) in case you need some money quickly
4.5% one year fix (3.6% after tax) As said the first £1,000 interest is tax-free 
3.65% ISA one year fix (tax free and £20,000 max)

Just ideas, not financial advice!

Hi Rob

The current ISA savings are being moved asap.  
I've a 4.55% fixed rate - I'm stalking MSE guides for a higher rate as soon as it appears.  
3.65% ISA - need to look into that

There is approx £90 variance in going for the ISA and fixed option as opposed to 100% fixed, with the 100% fixed being the more financially beneficial.  

I've money in the credit union - I use that as my easy access.  yes I know its not high interest, but the model works for me.

Thanks for your suggestions, really appreciate the logical advice 

LL xx

LexieLou

Dave_5150 said:

£20k in a 2 year fix ISA (4.3%) + £80k in a two year fix (5%) appears to leave you with a little more money at the end after tax than if you place the full £100k in the same two year fix (5%) on an assumption you are a basic rate payer with no other savings using up your PSA. 

Also leaves you with some tax free savings too if plans change, and you don't buy a house in 2 years.

That said I'm no financial advisor and I rushed the maths whilst eating my lunch so you may want to double check my figures!

Hi

I'm not going down the avenue of 2 year fixed rate at the min.  While I am planning to buy in 2 years, I'm not prepared to commit to 2 years savings.  I can always put them back in a fixed rate for another 1 year.  

LL xx

Albermarle

LexieLou said:

Dave_5150 said:

£20k in a 2 year fix ISA (4.3%) + £80k in a two year fix (5%) appears to leave you with a little more money at the end after tax than if you place the full £100k in the same two year fix (5%) on an assumption you are a basic rate payer with no other savings using up your PSA. 

Also leaves you with some tax free savings too if plans change, and you don't buy a house in 2 years.

That said I'm no financial advisor and I rushed the maths whilst eating my lunch so you may want to double check my figures!

Hi

I'm not going down the avenue of 2 year fixed rate at the min.  While I am planning to buy in 2 years, I'm not prepared to commit to 2 years savings.  I can always put them back in a fixed rate for another 1 year.  

LL xx

That makes sense. Just be aware that in one years time, a new one year fix could be lower than fixing for two years now.