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What to do with £25k?

(5 Posts)
Euphemia Sat 20-Jun-15 20:19:50

I have an endowment policy maturing later this year: what should we do with it?

We're both 48, in secure employment, no mortgage or debts of any kind, one DD early teens.

We'd like to invest it wisely for the future, for retirement or for DD. We are both VERY low risk, and would rather keep the money in a shoebox than invest it anywhere at all risky!

Any suggestions?

HermioneWeasley Sat 20-Jun-15 20:26:18

Not sure what you mean by "invest" if you're very low risk? Do you mean risk losing their capital for potential growth, or just what's the highest rate savings account?

Some options would be

A cash ISA (each of you using your allowance over a couple of years)
Premium bonds
Various bank/building society bonds
Stocks and shares ISA

specialsubject Sun 21-Jun-15 17:22:40

invest always means risk. At the moment 'save' means 'get it destroyed by inflation'.

until the latter changes here's the best paying places to put it:

two x TSB Classic Plus accounts (one each) - £2k in each, pays 5% interest
two x Club Lloyds accounts (one each) - £5k in each, pays 4% interest
remaining amount in a Santander 123 account paying 3%.

these will just stay ahead of inflation which is not really as low as they tell us.

you will need to set up standing orders to move money around the accounts to meet the minimum payment in per month. The Santander and Club Lloyds accounts also need 2 direct debits each. The Santander charges a £2 a month fee but also gives cashback which should negate it.

if you don't have enough direct debits, set up some small charity payments.

pain in the arse to do but once it is done, can be left to generate interest.

cash ISA rates are lower and unless you are big tax payers, may not be worth it. Do some sums.

specialsubject Sun 21-Jun-15 17:23:08

ps do not use fixed rate accounts or savings accounts, rates are pitiful.

Melonfool Fri 26-Jun-15 10:22:24

The TSB account needs £500 a month going into it (though it can go out again - we are opening it at the moment,will seed it with the £2k for the 5% then pay the mortgage amount into it each month and pay the mortgage from it).

The Santander cashback is only on very specific things - 1% on S'der mortgage payments, then certain % on phone/mobile phone bills and utilities. Think that's all. I think it might be 3% on utility bills - and you can pay what you like to utilities....so set your gas payment as £1000pm, get £30pm cashback (no tax on cashback btw), then happily accept the rebate the gas co sends you, agree you don't need the dd to be that high, then as soon as you're off the phone reset it to £1k smile

And don't forget those interest % are before tax, you won't get quite that much and if you're a 40% (or higher) tax payer then you will need to declare the interest on a self-assessment and pay some more tax at the end of the tax year.

I have generally been a HR tax payer but I am self-employed and can manage my income so I don't go into the 40% band now, but historically all my cash is in various ISAs, but I am going to have a look at the Lloyds one.

OP - you don't say what other savings you have?

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