£40k to save or invest

lottie3010

I am 33, in full time employment with a decent pension, currently have a mortgage on my home and have £40k in savings. 

I am looking for ways to make the most from this money (currently in premium bonds). 

Have considered ISAs, buy-to-let and investing in a business. 

Ideally would like to get some regular income with a lump sum option in the long term if needed. 

InvesterJones

Is this your easy access reserve or do you have that in addition to the £40k?

Yorkie1

Is the £40K your only savings? If so, then you should ensure that you have a decent emergency fund in cash / easy access - people suggest up to 6 months' expenditure. 

Beyond that, there's no one answer to your question. Various factors might need to be considered, such as whether you have a spouse / civil partner, or other partner - and what their provision is. And whether you have / hope to have children.

Also, what your salary is, and how large this cash amount is in comparison - which also leads to consideration of how much risk you are willing to take with the money. Are you willing to lose it all?

BTL is not a business for the faint-hearted. Are you experienced in it already? Have you researched the changes which are coming to renters' rights? Do you have the funds to withstand periods of a non-paying tenant who it takes some months to evict? And then to make good any damage that has been caused which is in excess of the deposit? These are worst-case scenarios but not unknown.

Investing in stocks and shares really should mean that you won't want access to the cash for at least 5 years, ideally 10 years. If you are relying on the investment to provide ready cash at a given moment, there is always the risk that its value won't be what you need it to be (it can go down as well as up!).

When you say you have a decent pension, what value is it already? When might you hope to retire?

What is your mortgage interest rate at the moment, and when does it come to an end if it's a fix?

So, more info would be helpful.

jimjames

Any reason you need income from it given you're 33? Normally you'd want an investment to compound long term as that will be what gives the boost to growth. It will still grow without income but it can be a substantial part of the return.
If it's not already in an ISA wrapper then putting £20k in now and the other £20k in April will get the whole amount protected from tax. You can then decide if you want to invest some or all of it in S&S ISA rather than cash.

Bostonerimus1

Make sure you have at least 6 months spending in a saving account for emergencies.
Pay off any high interest debt, that's anything with an interest rate higher than you can get in a long term saving bond.
Put more into your pension, buy inexpensive index tracker funds.
Put more into your ISA buy inexpensive index tracker funds.
When pension  and ISAs are fully funded, put more into your general investment account, buy inexpensive index tracker funds.

Mark_d

If I had £40k in cash savings and no other savings/investments then I would look to keep £10k in easy access cash and then max a S&S Lifetime ISA then put anything leftover in S&S ISA.

The S&S Lifetime ISA can take £4k per year and you get a £1k bonus, but it's only accessible from age 60.