we have absolutely no idea where to start re savings

WinifredB

Hi I'm new to the forum so hello all

We've recently come into a sum of money which has meant our mortgage has been paid off, and we have £150,000 to invest/save. Our joint income is abt £55k and we dont really have any other savings other than individual company pensions.

We're both not savvy about money saving and I keep reading about investing to the max re tax, but I haven't a clue where to start.

We're getting married in June, if this makes any difference to investments.

Any tips to kick off would be really appreciated.:D

Stavros_3

Hi and welcome, firstly you must use your tax free allowances, so both of you put away 3k each in a tax free ISA before the end of this year's tax allowance of 5th April, the ISA list is available on this site, others more worldly wise than me will be along shortly regarding the rest

Mikeyorks

WinifredB wrote: »

and we have £150,000 to invest/save. Our joint income is abt £55k and we dont really have any other savings

... a not inconsiderable sum .......so, see an IFA for advice (independent, not tied to your Bank etc).

WinifredB

Thank you.:D

If ISAs are taxfree, does this mean that the £150k that is currently in a bank account is not? And does that mean that the tax is taken before interest is paid to us?

Casaloko2k7

WinifredB wrote: »

Thank you.:D

If ISAs are taxfree, does this mean that the £150k that is currently in a bank account is not? And does that mean that the tax is taken before interest is paid to us?

Well You will pay Tax of the intrest you get from the £150.000 that you have in your bank.

If You both open an ISA of which you can only put £3000 in a year try and put £3000 in each before april the start of the new tax year therefore after april you can put another £3000 each in it. Hence this is because all ISAs are tax free but only £3000 a year can be put it which i think is going to increase.

But if say you put £3000 in your ISA and then took £500 out you cannot put £500 back is as you already deposited the maximum

As for the rest look for a high intrest savings account to deposit in to

CannyJock

Allowance for cash-ISA for 08/09 is going up to £3600 .

You'll get paid interest after tax.

If you're going to look into investment options, I'd say that you want to find a high-interest current account PDQ to put your money into.

B&B eSaver 2 would pay you £ 621 a month after tax on 150K .

My stock investements have tanked in the last year and I've no confidence things are going to get better in the next 6 months, so I'm staying out of the market just now and concentraing on cash.

nicko33

WinifredB wrote: »

Our joint income is abt £55k

Do you both pay tax at the Basic Rate, or does one of you pay at the Higher Rate?

tradetime

Possibly the first thing to decide is what period of time you can commit to not touching this money, ie nothing looming on the horizon, not considering moving to a more expensive property etc. Ensure any outstanding debts are paid off as in most cases debt will be costing more than you can realise in any interest. (Given that you have taken care of the mortgage I suspect not, though worth mentioning)

So again it comes back to how long you can leave this money to work for you. Less than 12 months and I would look at the best instant access accounts available (there is much info covering these on the site)

More than a year but less perhaps than five years, I would look at some of the fixed interest term deposits, currently there are still a few paying over 6%.

More than 5 years, and it may be worth exploring the possibilities of investment in stock markets or some other investment funds. I say may, because at this point you would have to also ask yourself whether you are prepared to risk losing some of your money, as performance of these types of investment almost always carries some risk, even though it may be described as low.

Given the title of your thread, again as others have said, seeking advice form a professional IFA would likely be the way to go, there are a few people on here who understand what IFA's do and how they are regulated etc (I do not) who can no doubt advise you what to look for with regards to selecting a good IFA.

In the meantime, again as others have said, I would look to open cash ISA accounts, you have £3000 allowance each for this tax year, 6th April 07 - 5th April 08 which expires in April, then from 6th April 08 another £3600 each for the 08 -09 tax year. Interest on those accounts will be tax free so they will generally beat all other ordinary savings accounts, there are a few still paying above 6%.

Then perhaps I would look at the best instant access, accounts to spread the remainder around at about £33,000 per account to take care of the protection of the financial services guarantee on your savings.

At this point you can relax and take your time considering the other options. Just don't rush into anything that can't be easily undone. As long as your money is safe and earning interest you are doing ok, and there isn't any need to rush into anything you may regret later. HTH

Jonbvn

After cash ISA's, I would suggest you have a look at Index Linked Savings Certificates from NS&I. You & your OH could put 60k into these immediately, which would be tax-free. You have to hold them for a minimum of 1 yr to get any interest.

With this amount an IFA is a good idea. Please note that generally they will not recommend the above noted certs.

tradetime

Please note that generally they will not recommend the above noted certs.

Out of curiosity, why would that be?

Aegis

Jonbvn wrote: »

With this amount an IFA is a good idea. Please note that generally they will not recommend the above noted certs.

Hasn't dunstonh noted before that IFAs are the biggest sellers of Index Linked Savings Certificates? I was under the impression that IFAs sold these fairly regularly to cautious clinets looking for medium to long term growth of capital.