Investing home equity until we buy again.

anewloginapparently

Hi all, 

I've just sold my flat & have £55k in equity back from that transaction. 

We're now living in a rented flat, until we're in a position to buy again, probably in around 6 to 12 months.

Where's the best place/places to invest my equity in the meantime, so it won't be harmed too much by inflation, but that I can access reasonably easily when the time comes to buy again?

Linton

For that short a time period there is no safe choice other than a savings account, probably instant access.  You dont want to take the chance that you end up with less than when you started.   Look on the banking & savings pages on this or similar websites.

Albermarle

Also at the moment savings interest rates are higher than inflation.

Alexland

You can put upto 20k per tax year in a cash ISA and up to 50k in premium bonds.

LHW99

1 year fixed rates are available, but no access before that.

There are some 6 month fixed rate accounts: https://www.finder.com/uk/savings-accounts/fixed-rate-bonds/6-month-fixed-rate-bonds

Or you could go for a 90 day notice account or similar - or have a "flutter" and put £50k in premium bonds in NS&I

slinger2

If you're going down the savings route there's 6 month fixes at 5.25% (Oxbury) or 90 day notice accounts at 5.25% variable (Investec). Even 6 months of £55k at 5.25% will give you well over £1k in interest and perhaps put you over your allowance. If there are two of you, you might be ok. Otherwise a Cash ISA might be an idea for some of the money. Premium bonds are tax free but you'll miss a whole month before being eligible for prizes.

Bigwheels1111

Don’t forget Chip, there isa is at 5.1%, easy access.
Tracks the base rate - 0.15%.
That would be £510 interest tax free for 6 months.
If base rate does not change.

anewloginapparently

If I put £20k in a cash ISA & £35k in a standard savings account this should hopefully keep me under the £1k interest limit for the savings account?

I'm in Scotland so my income tax arrangements are a little more complicated (I earn £45k so not quite a higher rate tax payer).

ColdIron

anewloginapparently said:

If I put £20k in a cash ISA & £35k in a standard savings account this should hopefully keep me under the £1k interest limit for the savings account?

£35,000 at 5% is £1,750 so no. If you split it with your OH they can put £20,000 into their ISA and the remaining £15,000 * 5% would be £750

Catplan

anewloginapparently said:

If I put £20k in a cash ISA & £35k in a standard savings account this should hopefully keep me under the £1k interest limit for the savings account?

I'm in Scotland so my income tax arrangements are a little more complicated (I earn £45k so not quite a higher rate tax payer).

For us in Scotland the higher rate kicks in at 43,663, so you’ll be paying 42% on anything above that.

mksysb

anewloginapparently said:

If I put £20k in a cash ISA & £35k in a standard savings account this should hopefully keep me under the £1k interest limit for the savings account?

Why is everyone so fixated about the £1k limit?  Better to earn as much as possible.  £100 over the limit would be £20 tax so you would be £80 better off than than trying to keep below the limit.