How much cash is too much?

poolboy

Similar sort of numbers here so max out on premium bonds and regular savers, my cut off is 5% and have about 30 accounts.  I try and open 1 a month so every month I have 1 expiring, so just recycling cash after year 1.

I also run a gia, it's a feeder for s&s isa.  I buy on the dips, pick up the divs and transfer into isa when possible.  As said, gia does need some admin for tax return, but just keep crystallised gains within allowances.

Sad but true, I actually enjoy running the above.  You can do it all on your phone so can do it anywhere.

Good luck

kipperman

A most interesting discussion - we have a commercial property that provides £62k p/a (15y of lease to run) but circa £610k in SIPP/other pensions (untouched) and a similar £610k in cash. I do have a level of angst about this amount of cash, but having been through covid where I was getting the statutory emails about 10% losses in the stock market relating to the SIPP I remain somewhat risk averse. Totally get the eroding of purchasing power, but it's a mind thing for me. 

coyrls

£610K is a good answer to the original question.

LHW99

coyrls said:

£610K is a good answer to the original question.

I thought that would be 42....

DiamondLil

@LHW99    

solidpro

Most interesting thread I've read in a long time. Has the OP actually said where his £500k cash sits? I put surplus / emergency money in HL active savings which can easily be switched between a variety of high interest (for easy-access) savings accounts - and has the benefit of being one portal to manage, keep eye on, switch, several <£85K 'protected' savings accounts, all making >4% so (far) keeping up with inflation.

Someone made a great point that by balancing S&S ISA 'all in' with quick cash in 'inflation matching' savings accounts, each with £85k protection is a great alternative to a VLS60%, but have it in a place which perhaps sits more nicely in our twitchy hearts.

seacaitch

rothers said:

Circs are that I have an index linked pension after tax of around £42k, my wife retires next month and she will have an index linked pension of around £5k. Our total income is around £3,900 per month after tax. We currently allow ourselves £5k per month to pay for all bills (mortgage is paid off), spending money, holidays and everything else.

Between us we have around £225k in stocks and shares SIPPs and ISAs and around £540k in cash.

I am aware that we hold far too much cash but how much do you think we should actually hold bearing in mind that I am 53 (retired) and my wife will be 55 next month when she retires?

I am comfortable with fairly high risk investment due to the relatively low extra amount I need each month to cover our spends. I only invest in low cost multi asset funds due to a lack on knowledge on the subject.

Since you clearly have the capacity to take more investment risk, how come then you aren't already doing so?

Has the high cash balance come about:
- from a new windfall?
- developed accidentally over time (default destination for savings) due to your focus being elsewhere?
- for some other reason?

I only ask because given your circumstances, your awareness of investing options (that you're already using), and stated comfort with "fairly high risk investment(s)", it's a large balance to have accidentally acquired through inaction. Is it possible that you have a preference for cash, despite your theoretical capacity to take more risk?

Just make sure that your appetite for risk genuinely does match your capacity, and you're not just saying it because you think you should be!

rothers

solidpro said:

Most interesting thread I've read in a long time. Has the OP actually said where his £500k cash sits? I put surplus / emergency money in HL active savings which can easily be switched between a variety of high interest (for easy-access) savings accounts - and has the benefit of being one portal to manage, keep eye on, switch, several <£85K 'protected' savings accounts, all making >4% so (far) keeping up with inflation.

Someone made a great point that by balancing S&S ISA 'all in' with quick cash in 'inflation matching' savings accounts, each with £85k protection is a great alternative to a VLS60%, but have it in a place which perhaps sits more nicely in our twitchy hearts.

It’s in differing savings accounts, mainly easy access but a couple of fixed rate accounts. 

I already have a S&S isa with HL which I am considering moving to the Halifax to join all my other S&S isas, I have seen the active savings account with HL but not really looked at the fees involved, is it expensive?

rothers

seacaitch said:

rothers said:

Circs are that I have an index linked pension after tax of around £42k, my wife retires next month and she will have an index linked pension of around £5k. Our total income is around £3,900 per month after tax. We currently allow ourselves £5k per month to pay for all bills (mortgage is paid off), spending money, holidays and everything else.

Between us we have around £225k in stocks and shares SIPPs and ISAs and around £540k in cash.

I am aware that we hold far too much cash but how much do you think we should actually hold bearing in mind that I am 53 (retired) and my wife will be 55 next month when she retires?

I am comfortable with fairly high risk investment due to the relatively low extra amount I need each month to cover our spends. I only invest in low cost multi asset funds due to a lack on knowledge on the subject.

Since you clearly have the capacity to take more investment risk, how come then you aren't already doing so?

Has the high cash balance come about:
- from a new windfall?
- developed accidentally over time (default destination for savings) due to your focus being elsewhere?
- for some other reason?

I only ask because given your circumstances, your awareness of investing options (that you're already using), and stated comfort with "fairly high risk investment(s)", it's a large balance to have accidentally acquired through inaction. Is it possible that you have a preference for cash, despite your theoretical capacity to take more risk?

Just make sure that your appetite for risk genuinely does match your capacity, and you're not just saying it because you think you should be!

A large proportion of the cash comes from compensation that I received from the infected blood disaster. 

When I say that I am risk averse seeing big drops in, for example vanguard life strategy funds would not make me sell them in a panic. Tbh, I’m a bit too stubborn I think, I got stung to a small degree with the Woodford fund, I held on till the bitter end to my detriment. That is why I now only go for multi assets as they seem to be the safest option. I know that they will recover in time and the money that I invest in them won’t be needed for a long time. 

RogerPensionGuy

rothers said:

Circs are that I have an index linked pension after tax of around £42k, my wife retires next month and she will have an index linked pension of around £5k. Our total income is around £3,900 per month after tax. We currently allow ourselves £5k per month to pay for all bills (mortgage is paid off), spending money, holidays and everything else.

Between us we have around £225k in stocks and shares SIPPs and ISAs and around £540k in cash.

I am aware that we hold far too much cash but how much do you think we should actually hold bearing in mind that I am 53 (retired) and my wife will be 55 next month when she retires?

I am comfortable with fairly high risk investment due to the relatively low extra amount I need each month to cover our spends. I only invest in low cost multi asset funds due to a lack on knowledge on the subject.

Any advice?

Cheers

Just for reference, you say one pension is 42k net after tax and think the other pension is 5K net after tax. 

Can you just confirm the gross amounts of them two indexed linked pensions and are they fully indexed linked or capped?

This information maybe helpful to get a fuller picture.