WHAT WOULD YOU DO?

Bobby4puddings

After 2 lots of recent inheritances to the wife and I I'm left wondering what to do.
Both of us have maxed out on cash ISA's, and premium bonds. We still have over £100K in a joint easy access savings account with a 5.2% interest rate (at the moment) .
I'm struggling as to what to do with the savings to reduce any Personal Savings Allowance tax. 
Should I just keep it in the savings account and pay the PSA tax (at least it will get some interest) or can I put it elsewhere which would be more tax efficient.
I have 5 grandkids all 16yrs and under, can I give them some money tax free?
Any thoughts would be appreciated!
I have no mortgage.

MattMattMattUK

Bobby4puddings said:

After 2 lots of recent inheritances to the wife and I I'm left wondering what to do.
Both of us have maxed out on cash ISA's, and premium bonds. We still have over £100K in a joint easy access savings account with a 5.2% interest rate (at the moment) .
I'm struggling as to what to do with the savings to reduce any Personal Savings Allowance tax. 
Should I just keep it in the savings account and pay the PSA tax (at least it will get some interest) or can I put it elsewhere which would be more tax efficient.
I have 5 grandkids all 16yrs and under, can I give them some money tax free?
Any thoughts would be appreciated!
I have no mortgage.

Are you retired, or still working?

Bobby4puddings

Both retired

MattMattMattUK

Bobby4puddings said:

Both retired

Ah ok, I was going to suggest dumping all earned taxable income into pension schemes as with the tax situation that would work out very beneficial, but I am guessing that you probably only have a small taxable income and it is more complicated if already drawing pensions.

You can gift the money to your grandchildren and there would only be tax payable as inheritance tax if you die within seven years. 

If I were in your position I would not be giving £20k sums to grandchildren at this stage, I would be waiting until they were older, likely as a contribution to a deposit once they had finished university. Do not pay their university fees by the way, there is a Martin Lewis YouTube video that explains exactly why that is a bad idea. I would either be planning on gifting to them when I was older, whilst also making provision for them in my will. 

In terms of investing it in the interim that is likely better placed for an IFA, but personally I would no be bothering with Premium Bonds either and would invest the whole lot, but what it in at the moment is the complicated question. 

Albermarle

Firstly you should be thinking about what is best to do with the money, and only then think about reducing any tax to pay. Not the other way around.
So in reality your question is probably better posted here, where you will probably get more feedback.
Savings & investments — MoneySavingExpert Forum

List your priorities ( forgetting about any tax issues for now) such as.

Money to be used to increase spending in retirement
or to be passed on as an inheritance
to be given to children/grandchildren
To buy a new car 
etc

In the meantime, I will just comment on a couple of things the previous poster said.

You can gift the money to your grandchildren and there would only be tax payable as inheritance tax if you die within seven years.  but only if the estate was likely to be liable for inheritance tax in the first place.

but personally I would no be bothering with Premium Bonds either and would invest the whole lot, but what it in at the moment is the complicated question.  Whether saving/Premium bonds/investing would be best for you, again goes back to what you want to get from this money. Without knowing that, it is difficult to make sensible comments.

ader42

What would I do?
First thing would be opening a Junior SIPP for each grandchild and paying in £2880 per year for each. Invested in low cost index trackers.
Next step maybe ISAs for each of them, similarly invested.