NS&I bond renewal or invest (lump sum)

C_Mababejive

Hi all,

I currently have an NS&I bond with a large chunk of money in it. I think i signed up a year ago for 6.2% or similar. They are offering a renewal at around 5.15% i think?

Im well into the higher earnings bracket (total annual income from multiple sources)

I thought it might be an option to invest the money maybe in a 60/40 or flexible investment fund, mainly for growth . This would mean id be paying less tax. (less savings interest with potential for greater return)  Im probably  not so far off retiring into a BR tax environment. I'm happy to take on a degree of risk.

Is there anything  else i might consider?

Thanks all

InvesterJones

First start with when you think you might use the money, that sets up a timeframe which in turn determines how much volatility you might be able to put up with. Then pick the investment that suits that. Moving from NS&I bonds to (even 60%) equities is a massive jump in volatility, so make sure that's what you're happy with.

Then of course consider what vehicle the investment is within - pension may be the most advantageous tax wise, followed by ISA. If you are investing outside of a tax wrapper then sure, growth (capital gains) or dividend paying funds are currently better tax rates than interest, but that isn't guaranteed to be the case going forwards. Other options include premium bonds, or UK Gilts where the capital gain is tax free.