Redundancy money to invest

Albermarle

TheUmpteenth said:

xylophone said:

Previous thread

https://forums.moneysavingexpert.com/discussion/6406852/best-savings-account-for-over-40s-to-save-mortgage-deposit

Yeah, I know, I didn't act on the last thread. I think it's partly because I'm risk averse and don't have enough information, and partly because I work full-time and don't have time/energy to get the information. Will I act this time? I plan to...
There is no risk to your money in any of the  savings account mentioned in this website., as long as you have less than £85K in one ( even then the risk is miniscule) 
Compare The Best Savings Accounts UK | Rates Up To 7.00% (moneyfactscompare.co.uk)

 It seems that you changed jobs in late November 2022 and thus increased your salary by a substantial amount.

You were asking about saving £800 a month, not about an account suitable for a lump sum.

 The £800 extra is still kind of there (though prices have gone up), on top of a further increase, as I changed jobs again. The volatility of my sector is one reason I want to save and buy a home.

You have now been made redundant  (after around 18 months) from this company and have received a redundancy lump sum and

shares in this company?

shares in the same company that made me redundant, and they're falling, but the advice it 'hold', which I'm not sure about. They're held by an American wealth management firm, but not invested.
Shares are invested by their very nature.

You now want an easy access account/accounts where you can hold the redundancy money pending buying a house?

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

The real advice I'm looking for is what kind of savings I should be considering. What I'm taking from this is

Shares - only if I'm investing for 5 years or I'm an aggressive risk taker At least 5 years, preferably longer
ISA - this gets me £20k tax free, which if the interest rate is good is the best short term option.
Regular Savers - these are taxed, I'm in the "Higher" rate bracket, so this is fairly significant. Still, this seems to be the second best option. These are no good for a lump sum so forget them.
Premium Bonds - This is basically a lottery. There's a low average return.

The FA who called was practically a salesperson. I was aware that this was a likelihood, though.

Thanks. I certainly know more now than I did before.

Some comments in bold.
Even as a higher rate taxpayer you can earn £500 per tax year in interest ( so from a non ISA savings account) without paying tax. 
As already mentioned a couple of times, higher contributions to a pension are usually a good idea for a higher rate taxpayer due to the tax relief. Plus of course to build up a big enough pot to enjoy your ( maybe early) retirement. 

xylophone

As a 40% tax payer, use your ISA allowance.

Is there any reason not to start looking for a property now?

Johnjdc

ISA isn't too bad for a lump sum if the lump sum is low five figures?

TheUmpteenth

xylophone said:

As a 40% tax payer, use your ISA allowance.

Is there any reason not to start looking for a property now?

We are looking, but the price of houses at the family size I need is just within what I'd get with the deposit I could scrape together, and the repayments would be significant even on my wage.

Pension
Personally, I'd hate to retire without the security of my own home. I can't imagine running from pillar to post on a zimmer because a greedy landlord wants to push the rent up, and who knows what the regulations will be then. My priority is getting a house I can afford and getting my family in there.

Thanks, everyone. I think I have the first steps planned - ISA for the lump sum, fill it up until the tax threshold, then consider my options, possibly keep using it, possibly move to a saver, maybe I'll be ready to buy by then. Look out for me asking for mortgage advice, next!

xylophone

We are looking, but the price of houses at the family size I need is just within what I'd get with the deposit I could scrape together, and the repayments would be significant even on my wage.

But had you considered house price inflation?

TheUmpteenth

xylophone said:

We are looking, but the price of houses at the family size I need is just within what I'd get with the deposit I could scrape together, and the repayments would be significant even on my wage.

But had you considered house price inflation?

Do you mean that the price of houses will rise faster than my ability to save the deposit? I had considered this. I thought that the price was rising more slowly than in previous years. Again, I'm probably ignorant of a great many things.

Albermarle

TheUmpteenth said:

xylophone said:

We are looking, but the price of houses at the family size I need is just within what I'd get with the deposit I could scrape together, and the repayments would be significant even on my wage.

But had you considered house price inflation?

Do you mean that the price of houses will rise faster than my ability to save the deposit? I had considered this. I thought that the price was rising more slowly than in previous years. Again, I'm probably ignorant of a great many things.

House prices have been relatively flat for some time, but probably that will not last for much longer ( just guessing)
Also it depends where you live, and even the type of property.

TheUmpteenth

Albermarle said:

House prices have been relatively flat for some time, but probably that will not last for much longer ( just guessing)

It's a roll of the dice either way. I suppose I could be overpaying my mortgage rather than saving a bigger deposit, but I know for absolutely sure that my costs would increase significantly if I bought any of the houses I've been considering.

Bostonerimus1

The answer is the same as nearly always: budget, emergency fund, pay off debt; pension, ISA.

0) Do a budget so you can control spending.
1) Put at least 6 months spending into an easy access saving account as an emergency fund.
2) If there is anything left then pay off high interest debt, ie loans and credit cards.
3) Make extra payments to your workplace pension which should be invested in a mix of low cost equity and bond index tracker funds or a multi-asset fund.
4) Invest in an ISA that is similarly invested as your pension ie low cost trackers or a multi-asset fund.

Once you have those covered then I would look at overpaying a mortgage or buying a house.

Alexland

Albermarle said:

House prices have been relatively flat for some time, but probably that will not last for much longer ( just guessing)

I'd argue the failure of house prices to rise means they have crashed circa 20% relative to inflation. Unfortunately that doesn't make them more affordable as salaries have struggled to keep up, other costs have gone up and interest rates have gone up.
Getting the house you want is usually a stretch but then a few years later that reducing amount of borrowing feels more affordable as incomes rise with inflation. Unless incomes don't rise or interest rates increase....