Lock away the bulk of my savings for 5 years?

El_Torro

I agree with Malthusian and Albermarle when they say that some of this money should be invested. Ideally in a pension or in a Stocks & Shares ISA. 5 years isn't really long enough to give you the best outcome, though if you need this money for retirement it sounds like you're going to be spending a lot of it in more than 5 years time. 

If you like you can put some of it in easy access (your emergency fund), some in fixed long term accounts and the rest in investments.

An interest rate of 5% does sound nice, but when inflation is at 10% or higher you're not really getting much benefit. Investments on the other hand are likely to beat inflation over the long term. Something that can't be said about saving in cash.

london21

Personally, not a fan of fixed interest savings for like 5 years.

I have opted for the instant access account offering 2.75%

Just never know, might need the funds or an opportunity might come up.

P933alilli

Without opening a new thread i wondered what proportions of savings should be left in cash and shares, bonds. I think i read somewhere of a third in each but dependent on personal situation obviously. On that criteria i'm very much overweight in cash but i'm 60 and retired so maybe i 'should' be sticking more in fixed rate cash bonds/isas? Horses for courses? I'm trying to build a cash-ladder for a balanced investor similar to the one by Pete Matthew on the meaningful money site. I could perhaps look to a shorter term, cautious fund for 4-5 years but then i''d probably choose VLS20 and because i'm already in VLS60 i'd end up with a VLS40 hybrid. Maybe the answer is just simply put more into VLS60 and aim for c.20-25% equity in total. At the moment with my VLS60 plus pension i'm c.17% shares ,12% bonds and 3% property of my total. I had considered taking more risk to increase equity by opening a total equity fund , ftse world all cap, to take me past the 11+ years part of the ladder but perhaps that isnt very sensible especially as my dc pension is doing ok! I may have answered my own questions....i'm not sure?

Millyonare

During the full 5-year period between 2017 to 2021, the FTSE100 only delivered about +5% net annual average growth.

A risk-free UK savings account at +5% gross or net (depending on one's tax situation) for 5 years is not a bad deal.

Not advice. Dyor, etc.

P933alilli

Millyonare said:

During the full 5-year period between 2017 to 2021, the FTSE100 only delivered about +5% net annual average growth.

A risk-free UK savings account at +5% gross or net (depending on one's tax situation) for 5 years is not a bad deal.

Not advice. Dyor, etc.

Thanks, ive applied for a gatehouse 5 yr fix for 5.1%. Ive considered VLS100, VWRL as well as the global all cap funds. I'm in the awkward position of having 3 fixed rate cash bonds maturing soon; one next month, one at the end of february nxt yr and one middle of june next year. The fixed rate bond maturing next month will go into the Gatehouse bank. I may be unlucky with the other two if savings rates fall.

Albermarle

Collyflower1 said:

Without opening a new thread i wondered what proportions of savings should be left in cash and shares, bonds. I think i read somewhere of a third in each but dependent on personal situation obviously. On that criteria i'm very much overweight in cash but i'm 60 and retired so maybe i 'should' be sticking more in fixed rate cash bonds/isas? Horses for courses? I'm trying to build a cash-ladder for a balanced investor similar to the one by Pete Matthew on the meaningful money site. I could perhaps look to a shorter term, cautious fund for 4-5 years but then i''d probably choose VLS20 and because i'm already in VLS60 i'd end up with a VLS40 hybrid. Maybe the answer is just simply put more into VLS60 and aim for c.20-25% equity in total. At the moment with my VLS60 plus pension i'm c.17% shares ,12% bonds and 3% property of my total. I had considered taking more risk to increase equity by opening a total equity fund , ftse world all cap, to take me past the 11+ years part of the ladder but perhaps that isnt very sensible especially as my dc pension is doing ok! I may have answered my own questions....i'm not sure?

I have seen posters on here, with just emergency fund in cash, so maybe 5% of the total. Plus of course some people are 100% cash.
The norm seems to be more around holding 2 to 5  years income in cash.

NannaH

Personally,  we have £15k in easy access as emergency money/ planned spends over the next 3 years,  another £15k in 1 and 2 year fixes ((£10k + £5k) and we are building up cash in our Sipps to be around 10% of pensions by 2030 by way of income funds, which add about £1k a year currently and keeping part of our contributions as cash.