Short Term Savings £50k

Hi all

I have £50k to stick away for a year, until Nov 2023 when I will use it to pay a chunk off the mortgage (can't overpay until then) and wondering what the best options are if anyone can share an opinion?

I'm currently a lower rate taxpayer but will move to high rate next year, so looking at PSA of £500.
I have not used my ISA allowance this year.

So I'm thinking as follows:

£30k Savings account one year fixed at around 4.5% (take the hit on the interest over £500)
£20k ISA 3.5% one year

I did think about premium bonds but the return is still likely lower than the savings account even after tax, unless one of the big prizes comes through - so a gamble effectively.

Any ideas? All gratefully received, thank you.

Replies

  • xylophonexylophone Forumite
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    I have £50k to stick away for a year, until Nov 2023 when I will use it to pay a chunk off the mortgage (can't overpay until then) 

    Not even up to  a modest percentage?

    I recall a young relative having a five year fixed rate with the option of paying up to  10(?) % each year.

  • AlbermarleAlbermarle Forumite
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    £30k Savings account one year fixed at around 4.5% (take the hit on the interest over £500)
    £20k ISA 3.5% one yearI did think about premium bonds but the return is still likely lower than the savings account even after tax, unless one of the big prizes comes through - so a gamble effectively.

    Seems a sensible plan. Although the chance of a £100/£500/£1000 prize on PBs has increased, the chances of winning anything bigger is still very small, and almost non existent for the Million. 

  • soulsaversoulsaver Forumite
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    3.6% (YBS) is worth 6.0% at HRT!

    Got a partner not using their ISA allowance?

    If rates stay relatively high (and Hunt doesn't pee on ISA chips Thursday) you may want next year's ISA allowance accessible in April - so carefully consider what you lock up in unwrapped FTB.
  • RetirementJohnRetirementJohn Forumite
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    Thanks for your responses.

    xylophone said:
    I have £50k to stick away for a year, until Nov 2023 when I will use it to pay a chunk off the mortgage (can't overpay until then) 

    Not even up to  a modest percentage?

    I recall a young relative having a five year fixed rate with the option of paying up to  10(?) % each year.

    Yes similar deal, but paid some recently so maxed the year.

    soulsaver said:

    Got a partner not using their ISA allowance?

    If rates stay relatively high (and Hunt doesn't pee on ISA chips Thursday) you may want next year's ISA allowance accessible in April - so carefully consider what you lock up in unwrapped FTB.
    That's 2 good points I need to think about!
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