Selling flat and have £300K to invest whilst renting

radet2024

Hello, we are selling our flat and moving into rental for a year or so.  We have around £300K to invest and despite reading much online about what to do, I am very confused.  We need to be able to access the money as will be looking to buy in the next year.  I am a full time parent so have plenty of tax allowance available so need the money to be in my name, not my partners.  I understand that the FSCS protects up to £1M for 6 months but I have read that there are issues with this?
I would be grateful for any advice about the best way to approach dealing with this money in the simplest and least time consuming way.

Thanks 

daveyjp

NS&I has no upper limit for protection of savings, 4% direct saver is their basic savings account which would suit your purpose.

radet2024

Thanks, but wouldn't I only be covered up to £85K?  

radet2024

Oh sorry, ignore this.

Albermarle

We have around £300K to invest and despite reading much online about what to do, I am very confused.  

Have you had a scroll through this forum? This question is asked on a regular basis from people who are between house sales and purchases.
An example of many.
Where to stash £500k+ — MoneySavingExpert Forum

El_Torro

radet2024 said:

Thanks, but wouldn't I only be covered up to £85K?  

No. As daveyjp already mentioned money in NS&I is fully covered. So if you put £2 million in a Direct Saver (the maximum you're allowed to put in this account) the full amount would be protected. 

NS&I is essentially state owned which is why all money there is protected, not just what FSCS protects. 

There are better interest rates elsewhere but if you don't want to be opening multiple accounts NS&I is your best bet.

kjs31

I had my house funds on deposit for 18 months between selling and buying a new home. FSCS does protect funds from a primary residence sale for up to 6 months but they don’t give any details about when that money might be received if an organisation fails. For this reason I decided to split my money between accounts into chunks of 85k, and also to maximise the amount of interest I received. 

It took a spreadsheet and a bit of admin as I opened new accounts and closed others as interest rates were increasing but it was worth it. You may be below the threshold to pay tax on saving interest but interest compounds assuming you aren’t spending it so you might find yourself creeping up towards the limit if you take a while to move. Look out for when the interest is paid. Some pay monthly so you will start receiving interest in the current tax year whereas some pay annually so all of the interest will be paid in the next tax year unless you close the account in the current tax year. As we are midway through the tax year monthly interest is likely to suit you better for tax purposes as it will split the interest across 2 tax years, but maybe make use of your husband’s ISA allowance first as that will take the pressure off. 

Just be aware that 12 months can become 18 months and so on. Buying houses in England in particular is not a quick process. It took me 18 months to find the right house and move in. I had anticipated 6 months at the start! So keep track of how much interest you are likely to earn in a tax year and move some money into an account that pays annually in the 25/26 tax year if your sale isn’t progressing as quickly as you expect and you are getting close to the tax threshold. 

radet2024

Thanks, all very helpful