Lump Sum Investment Options

samnisco

Hi

Advice on investing lump sum from sale of property in return for monthly income whilst looking for another property?

Thanks

Dazed_and_C0nfused

samnisco said:

Hi

Advice on investing lump sum from sale of property in return for monthly income whilst looking for another property?

Thanks

Do you mean investing or saving?

Investing would be an unusual (risky) option if you are expecting to purchase a property in the relatively near future (even within a few years).

eskbanker

You'll probably find that it's better to put the money into savings accounts rather than investing it as such, but much will depend on how much you're talking about, what tax band you're in, etc:

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

Eyeful

1. Any money needed within the next 5 years should be in a savings account .
(a) If you put it into an NS&I savings account, you are loaning money to the UK Government so it should be 100% protected.
(b) If you put it into a bank or building society covered by the FSCS, it is protected up to £85K.
You would need to split the money between different banks or building society savings accounts.

2. You could put up to £50k, into NS&I Premium Bonds. No interest is paid but the chance of winning prizes & you can get your money back.

3. Investing means putting your money at risk, such as in the stock market.
For less than say 5 or 10 years this is risky!

https://moneyfactscompare.co.uk/savings-accounts/

lr1277

You get £1M of FSCS protection for 6 months if the proceeds are from selling your main house.

Details here:

https://www.fscs.org.uk/making-a-claim/claims-process/temporary-high-balances/ 

If you put the money into an interest paying account, would you go over the 1K PSA limit?

If not your main house, would the gain take you into a higher tax band?

Finally HMRC may change your tax code (should you be earning a regular income) to recoup their taxes from any interest earned over the £1k.

Depending on the amount of interest earned you may have to submit a self-assessment return.

So from my point of view, premium bonds give you easy access and are protected. If you win anything it is a bonus but nothing is guaranteed.