What to do with £40,000,

Mistycat59

Hi,
as title says what do, i do with my money?
i currantly have it saved in a nationwide loyalty saver account, it was never a good rate but never done anything about it,
after seeing somthing on the tv ML show i have decided to look in to it,
me (63) and my wife(61) dont work,
I have a small pention come in about £500 a month which we manage on with some savings, we have no debts, Home owners,
so would like a little advice on were or what to do with it,
what is the difference between a isa and bond? i dont seem to understand it,
thanks in advance for any help,
Andy

eskbanker

I pointed you in the direction of articles to read at https://forums.moneysavingexpert.com/discussion/comment/79635039/#Comment_79635039, so worth reading those and identifying which product(s) meet your objectives for the money, in terms of when you're likely to need access to it, etc.

refluxer

The first thing to do is read up on the 'starter savings rate' which, along with the personal tax allowance and PSA (personal savings allowance), essentially means that (in most cases) you and your wife can each earn up to £18,570 a year in income (salary/pension plus savings interest) without paying any tax.

MSE's simple guide is here : https://www.moneysavingexpert.com/savings/tax-free-savings/

If your pension and savings interest income is nowhere near £18,570 each then I would say you don't really need the tax benefits of an ISA and your money would earn a higher interest rate in a normal (non-ISA) savings account.

Mistycat59 said:

what is the difference between a isa and bond? i dont seem to understand it,

The term 'ISA' is simply a tax wrapper that's applied to a savings account which means (in the case of a Cash ISA) that you can earn interest and not have to pay any tax on it. Your ISA allowance (the most you can put into an ISA) is £20k per tax year.

When talking about a normal savings account, a 'bond' usually refers to a fixed rate account where you lock your money away for a fixed period of time (with no access to the money) in return for a higher interest rate. If this 'bond' is not an ISA, then any interest earned would be subject to tax.

Beddie

Simple answer, based on the information you gave, is that you probably won't pay tax on savings, so decide if you want access to it or not. If not, then there are some great fixed rates, but do keep some back (£5k?) for emergencies.

Best savings rates are all listed here:

https://moneyfacts.co.uk/savings-accounts/

PS Nationwide have some decent fixed rates if you want to stay with them, not quite the best but less hassle for you.

https://www.nationwide.co.uk/savings/fixed-rate-online-bond/

xylophone

after seeing somthing on the tv ML show i have decided to look in to it,
me (63) and my wife(61) dont work,

Have you both checked your state pension forecasts?

https://www.gov.uk/check-state-pension

 Check savings rates here.

https://moneyfacts.co.uk/savings-accounts/

With regard to the word "bond"....

Building societies tend to use it for their fixed term savings accounts (see above) but strictly speaking, a bond is a  debt security.

See https://europe.pimco.com/en-eu/resources/education/everything-you-need-to-know-about-bonds

enthusiasticsaver

Mistycat59 said:

Hi,
as title says what do, i do with my money?
i currantly have it saved in a nationwide loyalty saver account, it was never a good rate but never done anything about it,
after seeing somthing on the tv ML show i have decided to look in to it,
me (63) and my wife(61) dont work,
I have a small pention come in about £500 a month which we manage on with some savings, we have no debts, Home owners,
so would like a little advice on were or what to do with it,
what is the difference between a isa and bond? i dont seem to understand it,
thanks in advance for any help,
Andy

A bond is a fixed term savings account which normally pays better interest than an instant saver but you cannot access the money should you need it.  You can have an ISA bond which is tax free but given you probably don't use all your personal tax allowance and you are allowed to earn £1000 interest each year tax free you probably do not need to use ISAs unless you have a large savings balance.  

Have you looked at high interest e saver accounts? They are accessible but probably higher than the loyalty saver you have at the moment.  What rate do you get on that?