Clueless: may have 42K coming in as a lump sum, what should I do with it?

incus432

Yes easy access savings account. A cash ISA would be fine (and at present seem to pay higher rate than non ISA) but beware restrictions some providers place on number of withdrawals you can make without dropping the interest.   You could only put 20k into an ISA this tax year, but add another 20k after 6 April 

refluxer

dyst_2 said:

Thanks all. I've just filled in the budget from the mse website, and a monthly income of £798.02 against a total spend of £1668.71, which is a deficit of £870.69 monthly and £10,448.26.  So I will need easy access to the money to live on, I think?

Does that mean you won't lose all of your benefits ? You'd be looking at around £2k PA in interest with your £42k in one of the better easy access accounts so, with your figures, it does sound like you'll need to dig into some of that capital. Presumably any benefits you've lost that are means tested will start to kick back in once your savings decrease to a certain threshold, though ?

In terms of what types of accounts would be suitable for your money, the very best easy access cash ISAs that are currently available (eg. Plum and Moneybox @ >5%) have downsides that would make them unsuitable for your situation, so my advice would be to concentrate on finding the best non-ISA easy access account that suits your needs for any of the money you're going to need immediate access to. 

In light of your latest figures and information, it looks like you're going to be very reliant on getting the very best from your savings so Premium Bonds are definitely not a good place for your money IMO, because you're not in a situation where you can afford to gamble with your savings, even if it is a 'safe' gamble like Premium Bonds. 

As far as other options go, fixed rate accounts are mostly paying less than the best easy access accounts at the moment (due to the forecast of decreasing rates) and your money will be completely inaccessible in one of those, so be very careful about locking money away that you might need. Notice accounts are another option and the best ones are paying slightly more than easy access at the moment but, again, your money is obviously inaccessible for the duration of the notice period so forward planning is essential with this type of account.

incus432

These may be possibles for you (from Martin's savings pages)

dyst_2

refluxer said:

dyst_2 said:

Thanks all. I've just filled in the budget from the mse website, and a monthly income of £798.02 against a total spend of £1668.71, which is a deficit of £870.69 monthly and £10,448.26.  So I will need easy access to the money to live on, I think?

Does that mean you won't lose all of your benefits ? You'd be looking at around £2k PA in interest with your £42k in one of the better easy access accounts so, with your figures, it does sound like you'll need to dig into some of that capital. Presumably any benefits you've lost that are means tested will start to kick back in once your savings decrease to a certain threshold, though ?

In terms of what types of accounts would be suitable for your money, the very best easy access cash ISAs that are currently available (eg. Plum and Moneybox @ >5%) have downsides that would make them unsuitable for your situation, so my advice would be to concentrate on finding the best non-ISA easy access account that suits your needs for any of the money you're going to need immediate access to. 

In light of your latest figures and information, it looks like you're going to be very reliant on getting the very best from your savings so Premium Bonds are definitely not a good place for your money IMO, because you're not in a situation where you can afford to gamble with your savings, even if it is a 'safe' gamble like Premium Bonds. 

As far as other options go, fixed rate accounts are mostly paying less than the best easy access accounts at the moment (due to the forecast of decreasing rates) and your money will be completely inaccessible in one of those, so be very careful about locking money away that you might need. Notice accounts are another option and the best ones are paying slightly more than easy access at the moment but, again, your money is obviously inaccessible for the duration of the notice period so forward planning is essential with this type of account.

Yes, I will still keep PIP, but I'll rightly lose all the means-tested ones (housing benefit, council tax reduction and employment and support allowance).   You're right that when my savings fall to below 16K, I will then be able to reapply for means-tested benefits again.  Thanks for the tips re: easy access accounts, and re: not using premium bonds.

kimwp

As it's care contributions, is there anything you could spend this money on that will make your life easier? Adapted bathroom etc? Or even a holiday? Seems a little unfair that you are getting less income overall than you would have if the council had not made that mistake. 

dyst_2

Thanks - my flat is fully adapted, but a holiday might be a good idea.  Someone elsewhere suggested they might disregard the capital as it wasn't my fault, but I can't see info for non-DWP mistakes - I'm going to post in a more relevant forum about that.

jimjames

Depending on your age you might also want to investigate pension options. As far as I know any money in a pension isn't included in capital assessments.

dyst_2

jimjames said:

Depending on your age you might also want to investigate pension options. As far as I know any money in a pension isn't included in capital assessments.

Thanks, that's interesting.