Where to save £300k safely?

exel1966

It all comes down to individualities in the end though. Some people (myself) think those odds are resonable enough to risk the potential loss, others will think the complete opposite and wouldn't go anywhere near them.

Of course there are other factors to take into account if you were to look at the even bigger picture. One of them is inflation and what your £30k would be worth in 10 years time compared to now, but that argument could also be used when looking at interest rates currently payable.

[Deleted User]

exel1966 wrote: »

Of course there are other factors to take into account if you were to look at the even bigger picture. One of them is inflation and what your £30k would be worth in 10 years time compared to now, but that argument could also be used when looking at interest rates currently payable.

For the example above, the site then goes on to say:

Retail Price Index (RPI)

To match the rate of inflation, so that your cash has the same buying power next year, it would need to grow by £12,600.00.

The probability that this won’t happen, and therefore your spending power will be decreased if you save in Premium Bonds is 96.7 %.

marioo

Abbey bank offers 7% return (gross) on 1year fixed rate bond. The minimum you can put in is £30000.

Jonbvn

First off you should look at NS&I products. You & OH can put 60k into Index Linked Saving Certs which are tax-free.

Given the large sum of money, I would buy 30k of PB's which may not on average give you a good return, but you will not lose any money regardless (except to inflation).

The other thing to remember is that you and your OH can put 70k total (35k each) in each bank/BS risk free.

Finally, should you wish to avoid the hassle, you could consider putting all the money with large bank (e.g. HSBC, Barclays etc.) If they were to go bust, then money would be the least of of our worries!

dunstonh

Are you using the interest as a form or income or are you leaving the interest in the savings account?

jimbo076

The idea would be to leave the interest in the account. Reality might be a little different!!

earlgrey_3

Jimbo, you're covered for £70K per institution for joint accounts or £35K for individual ones so spreading between four of them should be plenty.

But you really need to try to make some long term plans if you can. Are you going to stay out of the housing market permanently or will you be looking again? Is this intended to be your pension money?

Being heavy in cash is probably the smart move over the next 9-12 months but if you're looking long-term there could be some windows of opportunity at various points. The stock market is low and could go lower but there will be times when it's a good bet to put a few bob in provided you're happy to ride out the bumps.

jimbo076

We are relocating to Canada by the end of the year so whilst the housing market over there cools down we want to keep our money invested here. Additionally, the exchange rate isn't so good so that's another consideration. We know will be double taxed on savings but we are resigned to that until things stabilise a little.

dunstonh

That last bit changes the things as you dont want to find yourself paying tax twice on the interest (one here and again in Canada). So make sure anything you do now is flexible to change and it would be worth getting advice from a tax adviser that knows a bit about Canadian taxation. (Cook County on the forums may be about and read this and give an answer about the taxation side..

earlgrey_3

Sound advice from Dunstonh. Double taxation on that amount of interest is serious money and well worth getting advice on.