Sorting my Finances

SieIso

Hi All,

I have just had a savings account mature and I thought it might be a good time to sort out my finances. Below is my current setup, I would like to leave approximately £50k easily accessible for a house deposit. Does anyone have any advice on how to better structure my finances so that the money works better? I have exhausted my ISA allowance for the current tax year.

Mortgage has recently been paid off.

Thanks in advance.

ColdIron

You could have a look here

https://moneyfactscompare.co.uk/savings-accounts/easy-access-savings-accounts/?quick-links-first=false

cloud_dog

...and why three current accounts?  Move the £3k also.

SieIso

cloud_dog said:

...and why three current accounts?  Move the £3k also.

Valid question and I don't have a good answer.

Albermarle

What is your pension and mortgage situation ( or any other significant financial items)?

jimjames

£35k in a current account paying no interest? That's £150 a month you're losing out on. Definitely one to sort asap

badmemory

Definitely keep 2 current accounts or even 3 if getting to them is a problem but £3k in one is an awful lot with no interest accruing.

Barkin

badmemory said:

Definitely keep 2 current accounts or even 3 if getting to them is a problem but £3k in one is an awful lot with no interest accruing.

... as is £35k in another! 

Bridlington1

SieIso said:

cloud_dog said:

...and why three current accounts?  Move the £3k also.

Valid question and I don't have a good answer.

Many open current accounts for the ongoing rewards/perks, i.e. NatWest/RBS reward gives you £3/mth (if you discount the fee), Santander Edge gives access to the 7% Edge Saver, Club Lloyds gives you access to the 6.25% CL regular saver etc. I've got over a dozen current accounts at the moment, largely for this reason, though I certainly wouldn't consider keeping money in them if they pay no interest though.

As others have said move that £38,250 that you have in current accounts into accounts that pay you some interest, you're effectively throwing away circa £1-2k+ in interest you could be earning each year (depending on your tax status). For now I'd stick the money in the highest paying EA accounts you can find, @ColdIron has posted a good link for this. 

Also I don't know if you're aware but NatWest increased the amount they'll pay 6% on from £1k to £5k ages ago so you can start adding more to the NatWest Regular Saver. You might want to also have a look at other regular savers and drip-feed some of your savings into them. See:
https://moneyfactscompare.co.uk/savings-accounts/regular-savings-accounts/?quick-links-first=false

If you're saving to buy your first home and won't be doing so for over a year consider opening a LISA whilst you're at it, you can put up to £4k/yr into it and will get a bonus of 25% on your contributions.

Millyonare

Looks like you're missing out on £2-3k of free money (interest) every year. Need to ditch and switch, pronto. Not to mention the extra ~£500 that could be made by juggling current accounts around. And maybe even find a (slightly) better home for the Premium Bonds.

elkiedee

Having more than one current account can be useful for all kinds of reasons, but keeping £35K in one is a bit of a waste. £3K in another sounds like a lot to me but if you have a large mortgage and your monthly outgoings come close to that it might not be as much as some of us think. Is the TSB (£250) an active account or one you no longer use much? 

Which one(s) do you pay all your bills from? Do you have debit cards/an overdraft facility (not that you need it) etc with one or more, and are there linked perks? Is one your nominated account for withdrawals, Premium Bond prizes etc? Having a current account, even a secondary one, with a fairly token amount in it, in the same place as your most substantial easy access savings could be useful when it comes to making withdrawals.

I'd work out what you feel you need in your main current account to cover monthly day to day spending, and keep a more token amount in the others (£50, more if you're feeding it into a Regular Saver). Could you add most of your £38K to the Chip account? Or you can find another easy access savings account or two paying a good interest rate - and if you need to open another current account to access savings, that doesn't mean you need to keep a lot of money in there. 

You're presumably already earning more than your personal savings allowance (£0/£500/£1K at in interest on the Chip non-ISA savings, and putting £35K+ into savings from your £38,250 in current accounts could double your interest income next financial year. Will you stay within the same tax band? Do you have plans for next year's ISA allowance in April?