Advice on what to do with the rest of my savings after ISA

ljs_1985

I currently have £20k in an easy access ISA which I set up last month so my understanding is that i can't add to that, or start another ISA until April 2026?

I also have £35k in my regular Monzo savings account and am being told by lots of people that's not the best place for it? I am trying to sell my flat and buy a new house however this isn't happening as quickly as I'd like but does mean I need access to the money when the time comes whether that be in the next few months or next year, as the majority of it will be going to wards the purchase.

What should I be doing with my £35k savings? Please be kind with your advice, I'm a total novice in terms of understanding finances, tax, ISAs etc and know this is probably a silly question.

FrugaiMacDugal

Look for best savings account here or premium bonds.

kimwp

With 35k unprotected by an ISA tax wrapper, any interest you get on that will be subject to tax and also add to your income in terms of calculating where you are relative to the higher rate tax threshold. Not much you can do about that unless you want to put it in stocks and shares to use cgt and dividends allowance (not advised if you want to use the money within ten years) or buy gilts as the capital gain on that is not subject to tax (though coupons are treated as savings interest).

Probably just stick the £35k in the highest easy access savings account and be aware that you'll have to pay tax per your personal savings allowances.

InvesterJones

ljs_1985 said:

I currently have £20k in an easy access ISA which I set up last month so my understanding is that i can't add to that, or start another ISA until April 2026?

I also have £35k in my regular Monzo savings account and am being told by lots of people that's not the best place for it? I am trying to sell my flat and buy a new house however this isn't happening as quickly as I'd like but does mean I need access to the money when the time comes whether that be in the next few months or next year, as the majority of it will be going to wards the purchase.

What should I be doing with my £35k savings? Please be kind with your advice, I'm a total novice in terms of understanding finances, tax, ISAs etc and know this is probably a silly question.

Correct, you can't add any more to the ISA in this tax year. 

Given you may need the money in a few months I hesitate recommend premium bonds as you don't 'earn' any winnings for at least a month and with less than full holdings your odds will vary further from the prize rate.

Looking at good savings accounts with easy access is probably the easiest option (via the threads on this form, or the moneysavings expert page on best savings account, or the moneyfacts tracker) - yes, there are tax considerations but, if you are currently earning, this is automatically done for you (just don't be scared if in a few years you get a letter from HRMC saying you've paid too little tax - they will adjust your tax code for you and you don't need to do anything, it's all fine and normal). Depending on your income tax bracket it might be possible with some effort to get a higher real return via other tax-efficient options, but they come with caveats if you need to access the money earlier than expected (not necessarily bad ones, just added complexity/unpredictability).

Another option is a notice savings account, if you think there would be enough time between deciding you might need the money and it being available.

ColdIron

InvesterJones said:

ljs_1985 said:

I currently have £20k in an easy access ISA which I set up last month so my understanding is that i can't add to that, or start another ISA until April 2026?

I also have £35k in my regular Monzo savings account and am being told by lots of people that's not the best place for it? I am trying to sell my flat and buy a new house however this isn't happening as quickly as I'd like but does mean I need access to the money when the time comes whether that be in the next few months or next year, as the majority of it will be going to wards the purchase.

What should I be doing with my £35k savings? Please be kind with your advice, I'm a total novice in terms of understanding finances, tax, ISAs etc and know this is probably a silly question.

Given you may need the money in a few months I hesitate recommend premium bonds as you don't 'earn' any winnings for at least a month and with less than full holdings your odds will vary further from the prize rate.

Let's look at two cases

1. You deposit some money into a savings account at the end of December and just over a month later you receive interest and withdraw at the start of February
2. You deposit some money into premium bonds at the end of December and just over a month later you receive winnings (or not) and withdraw at the start of February

There is no significant difference to my mind in those scenarios

You certainly wouldn't want to deposit into PBs at the start of the month but the cash could be earning interest in a savings account until the end of the month. Similarly you would want to avoid a situation where you must withdraw before the next draw but IME property transactions rarely move that quickly and have plenty of notice

I wouldn't dismiss PBs out of hand on the basis that you don't earn any money for a month. Tax free too

InvesterJones

ColdIron said:

InvesterJones said:

ljs_1985 said:

I currently have £20k in an easy access ISA which I set up last month so my understanding is that i can't add to that, or start another ISA until April 2026?

I also have £35k in my regular Monzo savings account and am being told by lots of people that's not the best place for it? I am trying to sell my flat and buy a new house however this isn't happening as quickly as I'd like but does mean I need access to the money when the time comes whether that be in the next few months or next year, as the majority of it will be going to wards the purchase.

What should I be doing with my £35k savings? Please be kind with your advice, I'm a total novice in terms of understanding finances, tax, ISAs etc and know this is probably a silly question.

Given you may need the money in a few months I hesitate recommend premium bonds as you don't 'earn' any winnings for at least a month and with less than full holdings your odds will vary further from the prize rate.

Let's look at two cases

1. You deposit some money into a savings account at the end of December and just over a month later you receive interest and withdraw at the start of February
2. You deposit some money into premium bonds at the end of December and just over a month later you receive winnings (or not) and withdraw at the start of February

There is no significant difference to my mind in those scenarios

You certainly wouldn't want to deposit into PBs at the start of the month but the cash could be earning interest in a savings account until the end of the month. Similarly you would want to avoid a situation where you must withdraw before the next draw but IME property transactions rarely move that quickly and have plenty of notice

I wouldn't dismiss PBs out of hand on the basis that you don't earn any money for a month. Tax free too

Agreed, but that's only the case if you restrict your deposit and withdrawals to specific days of the month. Deposit too early, or withdraw too late, and your interest rate is lower, while with a savings account your money is earning interest every day that it's there.

Albermarle

Savings | MoneySavingExpert

VXman

I'd suggest this is the simplest high rate instant access savings account.

https://www.kentreliance.co.uk/products/savings/easy-access-savings-account

There are others if you are happy to give a little notice or take a penalty for withdrawing early but you don't gain much over the Kent one

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

Middle_of_the_Road

I'd go with Chase.

https://www.chase.co.uk/gb/en/product/chase-saver-account/

You would need to open their current account, which is simple to do, with no hard search. Always good to have an alternative current account if you don't already.