Fixed savings or investing?

FireRetire98

Hi guys, I have about £14,000 that is about to mature in a fixed savings account. I’m looking to maximise its return and I don’t need access to it - this is purely long term savings.

What’s better? Put it in fixed savings accounts (at around 6% guaranteed return), or invest? I’m a higher risk investor and I have a long time span to invest (I’m 25) so if I didn’t put it in savings I’d probably invest it in one of vanguard’s global equity funds. I already have a 3 & 5 year fixed savings account at 5.85%, should I get more while rates are still high? 

Janie2008

You have to fully understand the risks. In the long term equities usually do better but you have to be prepared to keep your money invested. Are you sure you won't need the money? For example I put £5000 in a stocks and shares ISA just before the crash of 2008. It went as low as £2000. It took a long time to recover but I still have the money invested and it's current value is around £16000. I can't tell you what to do but how about splitting it, some in equities and some in fixed savings.

ColdIron

FireRetire98 said:

I’m 25

Do you intend on buying a house/flat at some point?

I’m a higher risk investor

Expand on this. What are you invested in already?

Albermarle

For very long term investing it is usually best to do this via a pension.

Eco_Miser

Albermarle said:

For very long term investing it is usually best to do this via a pension.

For a 25 year old that's 30+ years without the option of access. Fair enough if that's what they want, but should be a carefully considered decision.

Richard1212

Cold Iron's questions seem the best contribution to this thread. These are important questions.Have you already got any investments at all at present ? How can you be sure you won't need some or all of the money in question ?

The one thing I would not do is to go down the pension route----you can't possibly take that seriously at your age.

If you answer some of the questions already asked, in order for more info to be available to us, I'm sure you'll get some sensible options from forumites. 

Barkin

Richard1212 said:

The one thing I would not do is to go down the pension route----you can't possibly take that seriously at your age.

You crack me up! 

pedrodelgado

How about pension AND investment? Open a SIPP, get tax relief and chose your own investments within it. Of course, the tax relief is only a one off hit on the initial deposit so would be about the same as a 4yr fixed savings account but after that, who knows what you'll get for cash, probably less than now. Ultimately it's your choice. You said you didn't need access to the money now but tying it up in a SIPP would be a 30+yr commitment at your age. At least you have a viable choice now, with cash savings paying more than the FTSE dividend average. Good luck with whatever you decide. 

Sg28

Richard1212 said:

Cold Iron's questions seem the best contribution to this thread. These are important questions.Have you already got any investments at all at present ? How can you be sure you won't need some or all of the money in question ?

The one thing I would not do is to go down the pension route----you can't possibly take that seriously at your age.

If you answer some of the questions already asked, in order for more info to be available to us, I'm sure you'll get some sensible options from forumites. 

I wish I'd taken pensions seriously at 25 years old! 

Better than panicking at 40 years old. 

Albermarle

pedrodelgado said:

How about pension AND investment? Open a SIPP, get tax relief and chose your own investments within it. Of course, the tax relief is only a one off hit on the initial deposit so would be about the same as a 4yr fixed savings account but after that, who knows what you'll get for cash, probably less than now. Ultimately it's your choice. You said you didn't need access to the money now but tying it up in a SIPP would be a 30+yr commitment at your age. At least you have a viable choice now, with cash savings paying more than the FTSE dividend average. Good luck with whatever you decide. 

If the OP has an employer then they will already have a workplace pension, unless they have opted out....
We will not know until they come back to the thread, if they do.

ColdIron

Sg28 said:

I wish I'd taken pensions seriously at 25 years old! 

Better than panicking at 40 years old. 

Yes, I remember when I was in my 30s and realising I was spending more on paying off my train season ticket loan than pension

There is a kind of natural order to it though. By your 50s you have a far greater chance of paying higher rate tax and no mortgage (or being within spitting distance of)

In your 20s the mortgage should be the priority