Mother in law's savings

onthemend

hi Everyone

I would like some advice

mother in law has put full 20k in an ISA this tax year, but has got 100k in a Barclays savings a/c at a pathetic 1%. what would be the best options/ a/cs to move these funds to get better interest, we know there will be tax to pay.  Easy access will need to be kept.

Any suggestions would be welcome.

JGB1955

Plenty of options at Best Easy Access Savings Accounts | Rates Up To 7.00% (moneyfactscompare.co.uk)

tetrarch

I've done just this for a number of familly members recently. Our choices were :

Tax-free - Max out premium bonds at a current "rate" of 4.65% Not only is this a good return there is an element of fun in premium bonds

Taxable -  1yr Fixed Rate bonds from Kent Reliance BS. Rates varying from 6.02 to (currently) 5.96%. I know that there are better rates around but a familiar "proper" name was important

Regards

Tet

grumbler

For a part of £100K it's worth considering fixed-rate savings.

https://moneyfactscompare.co.uk/savings-accounts/1-year-fixed-rate-bonds/

jimjames

tetrarch said:

Tax-free - Max out premium bonds at a current "rate" of 4.65% Not only is this a good return there is an element of fun in premium bonds

Or get best instant access account which will guarantee a return higher than premium bonds.

Albermarle

tetrarch said:

I've done just this for a number of familly members recently. Our choices were :

Tax-free - Max out premium bonds at a current "rate" of 4.65% Not only is this a good return there is an element of fun in premium bonds

Taxable -  1yr Fixed Rate bonds from Kent Reliance BS. Rates varying from 6.02 to (currently) 5.96%. I know that there are better rates around but a familiar "proper" name was important

Regards

Tet

As discussed in many threads, the effective interest rate for Premium Bonds is < 4% due to the average rate being skewed by the two Million Pound prizes. As the chance of actually winning one of these is infinitesimal, then best to discount it.
They are tax free of course which helps.

Albermarle

onthemend said:

hi Everyone

I would like some advice

mother in law has put full 20k in an ISA this tax year, but has got 100k in a Barclays savings a/c at a pathetic 1%. what would be the best options/ a/cs to move these funds to get better interest, we know there will be tax to pay.  Easy access will need to be kept.

Any suggestions would be welcome.

If she is not earning, or a low earner, there may be no tax to pay. You can earn up to £18750 without paying tax.

tetrarch

jimjames said:

tetrarch said:

Tax-free - Max out premium bonds at a current "rate" of 4.65% Not only is this a good return there is an element of fun in premium bonds

Or get best instant access account which will guarantee a return higher than premium bonds.

True, but the OP didn't ask for "best", just "better" and 4.65% net is > 5.8% gross for a 20% taxpayer

Easy access and total peace of mind for Premium Bonds is worth a lot on its own. The OP hasn't said how old MIL is, but in my experience, older people are extremely concerned with the safety and security of their investments.

Regards

Tet

NannaH

If she’s got £120k in savings, I doubt she’s existing solely on a State pension and is probably a tax payer. 

xylophone

If she’s got £120k in savings, I doubt she’s existing solely on a State pension and is probably a tax payer. 

The MiL needs to check out her personal situation as to whether she pays tax on savings interest.

https://www.gov.uk/apply-tax-free-interest-on-savings

There are all sorts of circumstances where a person may have a fair amount of capital in deposit accounts of various kinds and pay no tax on the interest.

Stargunner

It would also depend on whether the MIL is ok with using online banking, because some older people will only use branch based savings accounts.