What would you do with this money?

(58 Posts)
123Yellow123 Thu 25-Aug-16 23:37:49

I am being gifted £45,000 and am trying to decide what best to do with this.

Facts are:
- At uni building up significant student loan for another four years (mature student)
- Student loan will not cover full living expenses, so far have worked, but this may not be possible throughout, so need buffer accessible
- No other debt, incl. credit cards
- £20,000 in existing savings being transferred amongst debit and savings accounts and as of its introduction also into Help-to-Buy ISA
- Renting and as student no chance of getting a mortgage
- Really want to buy as soon as I finish and am again in position to get a mortgage and hopefully start a family

Would you just keep it in regular savings account? Premium bonds? Or what?

(Name changed)

MoonStar07 Thu 25-Aug-16 23:40:35

Can't you buy a small propert outright somewhere I'm thinking kind of Manchester? Like cheap (looking into rental incomes) and then keep the rental income?

123Yellow123 Thu 25-Aug-16 23:53:21

Wouldn't be able to buy anything outright near where I live I don't think. Also, obviously there would be the risk of something going wrong (e.g. replacing boiler or sth) and I would have zero buffer.

NisekoWhistler Thu 25-Aug-16 23:56:11

Moonstart, what planet do you live on, not a chance you can get a property in the second largest city in the uk for 45k!

NisekoWhistler Thu 25-Aug-16 23:58:09

I'd stick it in PremiumBonds until you decide. Wait for all this Brexit mess to calm down a little and then I'd try to buy 2 house to rent out, that said you'll need a job to get the mortgage.
Don't worry about you student loan , it's the cheapest money you'll ever borrow

Kayakinggirl86 Fri 26-Aug-16 00:02:59

Niseko, Manchester is not the second largest City in the UK! Birmingham is the second largests; 3rd Leeds; 4th Glasgow. Manchester is 9th.
Not to sure about Leeds but you 100% could buy a flat in Glasgow for that money.
Misses point of tread.

Blondie1984 Fri 26-Aug-16 00:04:15

I spoke to a financial advisor earlier this week as i have some savings currently just sat in a normal savings account. He said that I may as well just leave it there as the interest rates on offer at the moment are so dire - but i need to have easy access to that money as i'm hoping to buy so it might be different if you are happy not to touch it for a while

Have you thought of talking to an IFA?

RubbleBubble00 Fri 26-Aug-16 00:07:13

Keep chunk easily accessible then invest rest until your able to buy

Theimpossiblegirl Fri 26-Aug-16 00:10:41

That's a good deposit. As long as you are only incurring regular student debt (that won't hit your credit rating) I would save it to put towards a property purchase when you're ready. Interest rates are pretty low so personally I'd go low interest/low risk rather than investing with the possibility of it going wrong.

QueenLizIII Fri 26-Aug-16 00:11:30

Premium bonds are probably your worst option. If you dont win anything from it, then you will only get £45,000 back. It wont earn any interest at all.

Even though interest rates are so low right now, you would still get some interest as opposed to none from using premium bonds.

Try and find a new bank account package where they give you a savings account included with a special introductory interest rate, for a year or so.

Benedikte2 Fri 26-Aug-16 00:15:54

Keep the lump sum in a secure savings account for the time being and until you are ready to buy a house. Seek advice about best type of account.
Make a will in case anything should happen to you.
Any investment etc that pays much is not safe and you risk losing your money.
Good luck

Mittensonastring Fri 26-Aug-16 00:17:55

Santander 123 current account instant access up to 20k need couple of direct debts coming out. You would make about £50 a month. This was and probably is still the best thing to do. Check on Money saving experts website. They give money back in certain household bills. Stick 20k in and then set a payment from your regular bank account of X per month to keep it maxed out at 20k.

Don't bother with an IFA.

123Yellow123 Fri 26-Aug-16 00:25:37

Mitten, I'll def look into Santander account. Thanks.

Chocolateteabag Fri 26-Aug-16 00:51:31

There is also Tesco current acc (3% on £3000) and TSB (5% on £2000, have to have £500 going in each month but set up a standing order to put it in then out the next day)

Santander rate drops to 1.5% in Nov - but that could happen to all other accounts too.

Moneysavingexpert website/forums are definitely worth your time - lots of similar questions there

houseHuntinginmanchester Fri 26-Aug-16 01:10:33

HAHAHAHAAHAHAHHAHAHAHAHAHA to the first reply on the thread

gringringringringringrin

MauledbytheTigers Fri 26-Aug-16 01:11:48

The city of Manchester may be 9th but as a metropolitan area it's 3rd so although niseko's figures are off, it's still a valid point...manchester house prices aren't cheap in the desirable areas. And even in a non desirable area you'd struggle to find a house for 45k unless looking much further from the city centre (Burnley etc).

OP unfortunately it's shit at the moment..my windfall is either in Santander or overpaying the mortgage which isn't an option for you. I'd advise using it as a deposit at your earliest opportunity.

SatansLittleHelper2 Fri 26-Aug-16 01:30:25

Well according to rightmove Manchester has plenty of cheap properties albeit not in the greatest of areas.www.rightmove.co.uk/property-for-sale/property-55194178.html

Personally i'd keep hold of it until you complete your degree and maybe want to settle down in a few years. 45k is a good deposit on a house.

Mysterycat23 Fri 26-Aug-16 03:32:33

In some cases student loan income can be counted as income for mortgage purposes OP. Go ask your bank as a first port of call, but be aware different lenders have different criteria. NB. If you do decide to buy a house you're best off with an independent mortgage broker who looks at whole of market.

Champagneformyrealfriends Fri 26-Aug-16 08:00:51

Santas that's a shared ownership though so not outright buying a property.

Champagneformyrealfriends Fri 26-Aug-16 08:01:15

Satans sorry grin

monkeysox Fri 26-Aug-16 08:10:54

Santander 123 account has had rate halved from 3% to 1.5% I think angry

MoonStar07 Fri 26-Aug-16 08:14:13

I'm sure you get a property somewhere in Manchester for 45k a friend of mine his sister bought a property outright in Lancashire around that mark. They live down south. Purely not to keep it in a bank account and to have the rental income

monkeysox Fri 26-Aug-16 08:18:06

Example rental property.
Town on east coast mainline. This is a three bed with a tenant in it.
[http://www.rightmove.co.uk/property-for-sale/property-50118907.html]

InformalRoman Fri 26-Aug-16 10:16:38

The best instant access online accounts are currently giving 1.1%, although this is generally dropping back to 0.85%.

The Santander 1-2-3 account has to have £500 per month paid in as well as two direct debits, and there is a monthly £5 fee.

rosesarered9 Fri 26-Aug-16 10:17:10

I'd put it in a savings account with a good interest rate so you earn some extra money.

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