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

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 .


  • dunstonh
    dunstonh Posts: 115,706
    Name Dropper First Anniversary Combo Breaker First Post
    edited 5 February at 10:29AM
    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: 21,166
    First Anniversary First Post 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: 1,164
    First Post 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: 43,870
    Name Dropper First Anniversary First Post
    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?


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


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