Lump sum saving options

peteques

Hi all, could I ask advice please. I have £75K that I would like to save. I do not need access to it and would like to save it. I'm not investment savvy and would prefer something like a fixed term bond. I know none of us has a crystal ball, but I'm not sure whether to put in a 1 year bond at around 5.5-6.0%, or into a 5 to 7 year bond at around 4.5%. The first option is good if savings rates rise (doubtful now?) and the second option for the longer term if interest rates fall (probable? and possibly significant over the next few years?) What are the opinions of others please? Thanks Pete

eskbanker

You could always hedge your bets and split it into two pots, locked away for different durations?

What do you foresee this money being used for?  If it's genuinely long term money (if you're considering a 7 year fix) then it might be sensible to consider more suitable options, despite your lack of knowledge currently, which could include pension contributions for example.

bongoali

Hi,

Could you not split it across the two things you mention?

£75k not to be sniffed at.
If it was me I would split the amount across savings and investments if you have a looking at a period of say +8 years.
If you would end up paying tax then it use cash/S&S ISA for first £20k. And then sticks other £20k in on 6th April.

best of luck sir

Bigwheels1111

I was in that position last year, I took out a 5 year 5% fixed with annual payout.
A 5 year 4.85% fixed with annual payout and a 7 year at 4.5%.
Providing me a nice income for the near future.
I keep an emergency fund I an isa with low access penalty.

Dazed_and_C0nfused

Bigwheels1111 said:

I was in that position last year, I took out a 5 year 5% fixed with annual payout.
A 5 year 4.85% fixed with annual payout and a 7 year at 4.5%.
Providing me a nice income for the near future.
I keep an emergency fund I an isa with low access penalty.

Don't forget if all that interest reaches £10k in a tax year then you should file a Self Assessment return 😉

peteques

Dazed_and_C0nfused said:

Bigwheels1111 said:

I was in that position last year, I took out a 5 year 5% fixed with annual payout.
A 5 year 4.85% fixed with annual payout and a 7 year at 4.5%.
Providing me a nice income for the near future.
I keep an emergency fund I an isa with low access penalty.

Don't forget if all that interest reaches £10k in a tax year then you should file a Self Assessment return 😉

Can I ask why please? I thought tax on interest was collected through your tax code. Have I got this wrong?

Swipe

peteques said:

Dazed_and_C0nfused said:

Bigwheels1111 said:

I was in that position last year, I took out a 5 year 5% fixed with annual payout.
A 5 year 4.85% fixed with annual payout and a 7 year at 4.5%.
Providing me a nice income for the near future.
I keep an emergency fund I an isa with low access penalty.

Don't forget if all that interest reaches £10k in a tax year then you should file a Self Assessment return 😉

Can I ask why please? I thought tax on interest was collected through your tax code. Have I got this wrong?

Those are the HMRC rules for £10K or more of annual income in interest and/or dividends. 

https://www.gov.uk/check-if-you-need-tax-return

Dazed_and_C0nfused

peteques said:

Dazed_and_C0nfused said:

Bigwheels1111 said:

I was in that position last year, I took out a 5 year 5% fixed with annual payout.
A 5 year 4.85% fixed with annual payout and a 7 year at 4.5%.
Providing me a nice income for the near future.
I keep an emergency fund I an isa with low access penalty.

Don't forget if all that interest reaches £10k in a tax year then you should file a Self Assessment return 😉

Can I ask why please? I thought tax on interest was collected through your tax code. Have I got this wrong?

It is for most people but if your interest is £10k or more HMRC want you to complete a tax return (even if no tax will be owed).

Bigwheels1111

Dazed_and_C0nfused said:

Bigwheels1111 said:

I was in that position last year, I took out a 5 year 5% fixed with annual payout.
A 5 year 4.85% fixed with annual payout and a 7 year at 4.5%.
Providing me a nice income for the near future.
I keep an emergency fund I an isa with low access penalty.

Don't forget if all that interest reaches £10k in a tax year then you should file a Self Assessment return 😉

I know, I’m keeping very good records.
30 odd accounts, new and old easy access accounts.
Opened one after another to get the best rate, Plus 5 regular savers.
Fixed rates and isa’s.
I have access to self assessment as was self employed a while back.
If I could be bothered I could file my return a the 6th April 2024.