Sold the house and lost my job - now what?

Hebbs

Hello all,

I have had an offer on my house, if it all goes through; I intend on keeping the money as savings and will move into rented accommodation.

This will tally up to be around £400k; now, with the present volatility of the markets, and presumed future downfalls of the housing market. I am not sure what is the best way to invest the money; I am also concerned with putting it all into one account, such as, the Abbey e-saving account (gross rate p.a. 6.5%).

My personal thoughts would be:
Each figure will be divided into two (30k for my wife and myself)

• 60k premium bonds
• 70k Abbey e-savings (6.5%)
• 70k Bradford & Bingley Internet Saver – Issue 2 (6.15%)

Leaving me 200k to still invest; do I keep spreading it across to other banks?

Last question, can you claim back the interested tax deduction if that is your only form of income?

Thank you in advance

liitleblackcat

Don't do premium bonds. See Martin's article on how useless they are. http://www.moneysavingexpert.com/savings/premium-bonds

Baldur

Don't forget that the £35k compensation offered by the FSCS scheme (which, I presume, is why you are trying to slit the capital into appropriate amounts) is the maximum payable and includes capital & interest, so you may wish to put less than £35k each into any one institution to allow for the interest earned.

CLAPTON

if interest is your sole source of income then

you can get the first 5435 tax free
the next 2320 at 10%
the rest is taxed at 20%

so at the end of the year you will need to reclaim the tax


it will be worth using your tax free ISA allowance (3600 each)

Biggles

Not the question that was asked, but why lumber yourself with rent when you could be a mortgage-free owner-occupier? That would be a far better use of money, whichever way you think house prices are going in the short term.

If you're not careful, your savings will deplete to the point where you'll need a mortgage to get back into the housing market and find prices are going away out of reach.

Mikeyorks

Hebbs wrote: »

I am not sure what is the best way to invest the money;

In which case .... you need an expert. Too much at stake to DIY. Get an IFA to advise ..... a wholly independent one who specialises in investments - not one tied to a Bank or similar institution.

But don't ignore post #5. Downsizing to mortgage free and leaving a lump sum .... could be a good way to go.

Mikeyorks

CLAPTON wrote: »

if interest is your sole source of income then

you can get the first 5435 tax free
the next 2320 at 10%
the rest is taxed at 20%

For one second I thought you had that wrong! But you're quite right ... you can attain the new 10% band - and go into the 20% band ...... solely provided the interest starts within the 10% sector. Don't think my brain had absorbed that:rolleyes:

chesky369

Sorry to be a bit personal, but how old are you? I mean, are you thinking you will either get a job or retire early? Guess you know about ISAs even though your tax position is unusual.

No, please don't even think about premium bonds - you want sensible money, not wishes.

chesky369

By the way, Mikeyorks etc. is correct, get yourself a good IFA.

deaglecat

For that sort of money.. you may wish to consider a hedge against a fall in sterling. I could suggest one of the IoM based offshoots of a UK building society with a Euros based account... not for all your investment - but as a hedge.

meatandtwoveg

caveat_emptor wrote: »

I'm sure you'll correct me if I'm wrong but doesn't the 10% band only apply if your savings interest doesn't exceed 2320. If it does the 10% band does not apply.

Your wrong!

10% band only applies when your only source if income is savings interest.