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What would you do with this money?

57 replies

123Yellow123 · 25/08/2016 23:37

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)
OP posts:
MoonStar07 · 25/08/2016 23:40

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 · 25/08/2016 23:53

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.

OP posts:
NisekoWhistler · 25/08/2016 23:56

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 · 25/08/2016 23:58

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 · 26/08/2016 00:02

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 · 26/08/2016 00:04

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 · 26/08/2016 00:07

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

Theimpossiblegirl · 26/08/2016 00:10

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 · 26/08/2016 00:11

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 · 26/08/2016 00:15

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 · 26/08/2016 00:17

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 · 26/08/2016 00:25

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

OP posts:
Chocolateteabag · 26/08/2016 00:51

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 · 26/08/2016 01:10

HAHAHAHAAHAHAHHAHAHAHAHAHA to the first reply on the thread


GrinGrinGrinGrinGrinGrin

MauledbytheTigers · 26/08/2016 01:11

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 · 26/08/2016 01:30

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 · 26/08/2016 03:32

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 · 26/08/2016 08:00

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

Champagneformyrealfriends · 26/08/2016 08:01

Satans sorry Grin

monkeysox · 26/08/2016 08:10

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

MoonStar07 · 26/08/2016 08:14

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 · 26/08/2016 08:18

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]

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InformalRoman · 26/08/2016 10:16

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 · 26/08/2016 10:17

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

SatansLittleHelper2 · 26/08/2016 11:17

There were loads of others champagne, I posted the wrong link. I was just having a nosy at that one Grin

Either ways i'd save it, the.income from rent off a house in a cheap area wouldnt be enough for me to take the risk tbh

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