Best thing to do with savings ?

MouldyOldDough

I am about to gain around £450k - what is the best thing to do with it ?

Bearing in mind that we are already maxed out on ISA's this year - having £200k in a Quilter Cheviot portfolio ISA. I really want to try something else but what ?

I understand that you can put £50k into premium bonds - tax free winnings

Cahoot currently offers 5% GROSS - I will have tax to pay on the interest

Any more suggestions ?

flaneurs_lobster

Just savings?

Cahoot's Simple Saver is 4.52% on balances up to £500k, the Sunny Day Saver is 5% but £3k max.

Chase has 4.5% for new customers.

Vitor

Best bet is speak to an independent financial advisor; the glaring omission from OPs question is what the £450k is intended to do. They'll look at investment risk OP can tolerate, existing pensions and taxable investments, CGT/dividend exposure, and whether some of the money needs to remain cash. Any or all of these could be viable -

£50k into Premium Bonds

Use pensions if OP has the earnings and allowance available

Long-term money into a diversified General Investment Account

Short-dated, low-coupon gilts for the lower-risk portion

El_Torro

Since you haven't told us much about your situation there's not much we can say that isn't generic.

Generally speaking a combination of topping up your pension, paying off some or all of your mortgage and topping up your ISA (doesn't have to be this tax year) is the way to go.

I don't often suggest finding an IFA but with a sudden influx of £450k that might be the best way forward.

As an aside: the Cahoot Sunny Day Saver currently pays 5% on balances up to £3k. The Simple Saver pays interest on up to £500k but that's only 4.52% interest. It's also not a good idea to have more cash in a bank than what is protected by the FSCS.

poseidon1

If you are happy to wait awhile for your investment returns, purchasing CGT free low coupon government gilts definitely worth considering, especially for higher rate tax payers. Currently returns are between 4 to 4.5% depending on bond duration.

If you don't want to put in the time or effort to learn about investing in gilts in this way, there are stockbrokers/ wealth managers that offer discretionary managed portfolios. Indeed appears your own wealth managers at Quilters are offering such a service below -

https://www.quiltercheviot.com/news-and-events/articles/short-term-bond-strategy-qa/?concertinaId=concertina__link--193571-3

friolento

You haven't shared any information about your plans for the money, what your age(s) are, or what your pension provisions are. For many people, putting as much as they can into pensions could be the right approach, but whether this would be for you is not possible to tell from the information you shared.

In addition, for a substantial sum of £450k, paying an IFA for advice - not just about investment but also about IHT proving / planning - may well be your best choice.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82103984#Comment_82103984

OP is/was 63 and in receipt of ESA, so only minimal sipp contributions possible if long term out of work.

Albermarle

Cahoot currently offers 5% GROSS - I will have tax to pay on the interest

Not sure tax is really a big issue for anybody who has gained a sum of £450K !

IN any case if you have no ( or low) taxable income, you can earn a lot of interest without paying tax .

How the starting rate for savings works - Money Saving Expert

friolento

https://forums.moneysavingexpert.com/discussion/comment/82103995#Comment_82103995

That's not information they shared here, so I agree, pension contribution could only be minimal. This new information does raise the question about income in retirement - is any of the £450k needed for it, if yes, when and how much?

LHW99

Any spouse / civil partner? If so, putting some into their name may be an option (although obviously it then becomes their money)

MouldyOldDough

OK - Mortgage paid off (16 years ago) - have wife.

Income plenty for normal survival - Ill health pension(s) - NOT ESA - plus PIP (both enhanced) + possible IIDB

State pension should be full (in 4 years) - possible house move (bungalow) and new car - but apart from that - no plans.

This is a nice/new situation to be in - but slightly worrying