We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

£50000 to invest best way for me to do this and pay less tax per year

Options
Have recently retired with my pension I have £18000 to live off per year  would like to earn the interest yearly off the £50000 to top up my income what would be the best for me to do high interest rate savings account or high rate isa .

Comments

  • dunstonh
    dunstonh Posts: 119,624 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    edited 5 February 2024 at 11:29AM
    a) in terms of the wrapper, potentially, a pension and ISA wrapper will give the best outcome
    b) unlikely to be a savings account as that carries high risk when being used for lifetime income provision.  Although sufficient cash should always be maintained if it is your emergency fund.

    However, with limited details, it is difficult to say.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Albermarle
    Albermarle Posts: 27,765 Forumite
    10,000 Posts Seventh Anniversary Name Dropper
    The title of your thread says you want to invest £50K. This would normally be taken to mean you want to invest in stocks and shares, or similar.
    However your post indicates that you want to save the money, so working on that assumption.

    Normally it is best to split between an easy access account, and a couple of fixed term accounts. The latter will tie up your money for the fixed term period but will give you some certainty of the rates you will get. Easy access accounts have a variable rate that can change at any time.

    With a pension of £18Kpa, you can earn up to £1000 in interest tax free ( per tax year) If the money was in a cash ISA it would be protected from tax . However you can only add max £20K per tax year.

    This is informative
    Best savings accounts: 5.15% easy access or 5.16% fixed rates (moneysavingexpert.com)
  • boingy
    boingy Posts: 1,905 Forumite
    1,000 Posts Second Anniversary Name Dropper
    Put 20K in an ISA now (or at least before April) and another 20K into it after April. That will give you tax free interest on most of your money. But if you take the interest as income your cash sum will depreciate over time.
  • xylophone
    xylophone Posts: 45,604 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Have recently retired with my pension I have £18000 to live off per year 

    Is this just your occupational pension?  Is it Defined Benefit with annual increases?

    You are under state pension age?

    If so, when do you reach SPA?

    Have you checked your State Pension Forecast?

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

    What does it say at Estimate to 5/4/23?


    https://www.thisismoney.co.uk/money/article-1583859/Best-savings-rates-General-savings-Internet-branch.html

Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 350.8K Banking & Borrowing
  • 253.1K Reduce Debt & Boost Income
  • 453.5K Spending & Discounts
  • 243.8K Work, Benefits & Business
  • 598.7K Mortgages, Homes & Bills
  • 176.8K Life & Family
  • 257.1K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.