£70,000 sitting in account

[DownstairsMixUp]

Anyone savvy with money know if there's anything I should be doing?

I lost my dad earlier this year and as he did not retire, me and my brother each got £70,000 each. The solicitor involved due to the way he died is going for a claim in court which could also get us another 25,000-£125,000 each. We don't know when this will be over right now.

I'm studying and still have two years to go and me and my husband own our own home. We are not sure if we will stay in this area so have just got the money sitting in my savings which has a 0.05% interest rate. We have decided that once I've qualified and the solicitor money comes through we will need to decide whether to just buy the rest of our home or obviously sell and go elsewhere.

In the meantime, is there anything I can do with the 70,000 for two years? I'm not from a money background so to have this sort of money sitting in my account is weird. Is it best just leaving it in the savings account? A brief Google tells me interest rates aren't great right now. Any ideas?

Thank you

@ShandlersWig

Premium Bonds. Totally safe. With that amount you'll at least win the same as youd get from a high street account but the opportunity to win a million. Your 70k does not reduce and is imeadatly accessible (well, about 4 to 5 days).

Wouldn't be the £70k since the max you can invest is £50k

Premium bonds are NOT a good bet at the moment.
Interest rates are so low so the prize fund Is small and your chance of winning is tiny.

Martin Lewis as always explains it well

But premium bonds are probably as good as you can get from instant access right now. The OP is planning to buy property in a couple of years, which makes investment hugely risky, could increase, but could also lose money.

While there's a good chance someone with a few thousand or less will win nothing, with £50k in PBs the OP has a good chance of matching or getting close to the 1% payout rate.

At least it's almost certainly going to be way better than the 0.05% she's currently getting from her 'savings' account, completely risk free and easy to get back in a few days.

I'd buy £50k of PBs, put the rest in a fixed rate account for a couple of years. Then the OP is free to buy whenever she wants to, if she buys before the fixed rate matures , she can use that to pay down her mortgage when it becomes available.

@Davros

I keep seeing Premium Bonds recommended on here but BEWARE, they are about to go through a massive change.

That's a bit of an exaggeration. The payout rate is about to drop to 1%. Still in line with other instant access accounts.

I averaged over 2% in 2019 and am over 5% so far for 2020 as I won £1k a couple of months ago.

I think seeing an advisor is a good idea. It sounds like you may have use for the money in the near future so I’d be wary of stocks and shares if you need the cash. Or if that tempts you maybe try a smaller amount like people have suggested. Suppose it depends on your future plans. Also if you anticipating receiving some more higher monetary amounts in the future advice would be useful.

Maybe financial advice for the best savings accounts/bonds you can get access to until you need the money. I know premium bonds are dropping soon but my partner has 20k and wins regularly at least £50. I’ve invested a smaller amount and haven’t won but it’s my emergency fund and had an interest rate of less than 0.5 when I took it out the isa.

My savings builder for household/holiday savings which was a decent rate has been cut twice this year and is how 0.75%. With the pandemic and brexit I’m just accepting rates will be pants. I’m too risk averse and don’t have enough larger savings to do stocks and shares, maybe one day once the mortgage is paid off!

They don't need to pay an advisor to be told that the money needs to stay in cash if they want to use it in 2 years. Details of products available can be found for free on Moneysupermarket etc.

BarbaraofSeville fair enough. I was vague because I don't really know the details!

Premium Bonds is the way to go.

Paying off our mortgage was the single most freeing thing we ever did.

It's not so much about having more money each month, but the reassurance that if your job turns toxic or unexpectedly goes under, you don't have to worry as much. Since paying off our mortgage DH felt able to quit a job that was causing him great stress and send the better part of a decade as a SAHD. I've been able to retrain and leave a career that was grinding me down. We've both been able to choose jobs that we enjoy rather than ones that pay the mortgage. I've turned down several promotions because I'm good and enjoy what I do now and don't want or need the stress that comes with more money and more management (which I hate)

Oh come on!

The posters suggesting the OP invests in stocks and shares need to give their heads a wobble.

Have you read any of the literature which comes with these products? Minimum of 5 years and OP wants her money out in 2 years, you don't need to be a financial adviser to work out that it's not suitable. Stocks and Shares are designed for the medium to long term, not for short term investments. Yes, some people make money in the short term and walk away happier, but what if OP lost 30% of her investment? Would she be able to remain invested until the market recovers?

OP, look at NS&I and cash ISA's. It's what any decent financial adviser would tell you to do with your short term savings needs.

@Nikhedonia

Oh come on!

The posters suggesting the OP invests in stocks and shares need to give their heads a wobble.

Have you read any of the literature which comes with these products? Minimum of 5 years and OP wants her money out in 2 years, you don't need to be a financial adviser to work out that it's not suitable. Stocks and Shares are designed for the medium to long term, not for short term investments. Yes, some people make money in the short term and walk away happier, but what if OP lost 30% of her investment? Would she be able to remain invested until the market recovers?

OP, look at NS&I and cash ISA's. It's what any decent financial adviser would tell you to do with your short term savings needs.

Assuming you aren't looking to pay off your mortgage, that is. Personally, I'd keep an emergency fund and pay off the mortgage. But if you want to keep the money in savings, look at the most tax efficient investments (ISA and NS&I)

Oh, I missed that they already had a mortgage - in that case, assuming that your mortgage interest rate is higher than what you can get in savings, which isn't always the case, pay as much as you can off the mortgage, after keeping around £10-20k back for emergencies (and watching out for limits on penalty free repayments).

A financial adviser who told you to put your money in NS&I wouldn’t be meeting the rate of inflation and would lose you money definitely.

@oneglassandpuzzled

A financial adviser who told you to put your money in NS&I wouldn’t be meeting the rate of inflation and would lose you money definitely.

Inflation risk, yes.

The stocks and shares ISA suggestions opens the OP up to risks including but not limited to;

• Capital risk
• Market risk
• Inflation risk
• Currency risk (if not invested in the UK)
• Liquidity risk (depending on the assets the fund invests in)

Inflation risk over the short term is no where near as bad as the above. Hence stocks and shares investments should be considered over the medium - long term unless you accept the above and other risks and have sufficient capacity for loss.

Stocks and shares ISA and in April repeat. Alternatively use £50k deposit for a btl. The house will go up in value and you can sell if you need to. Get an agent to manage.

My son works in investments and says the bank is the best place for the money

@caringcarer

Stocks and shares ISA and in April repeat. Alternatively use £50k deposit for a btl. The house will go up in value and you can sell if you need to. Get an agent to manage.

I want your crystal ball if you think that's a sensible plan to keep a house deposit safe for a couple of years.

All the NS&I rates are currently terrible: www.nsandi.com/products

Premium Bonds is the best, but you might not get any 'wins' ...but you have a minuscule chance of a substantial win.

Easy access and two-year fixed savings accounts: www.moneysavingexpert.com/savings/savings-accounts-best-interest/#easyaccess

Your mortgage is a debt. If you are paying interest on it than is higher than any of these savings accounts, then it will pay off, as long as there are no over-paying costs.

OR your pension will attract the tax bonus. Ask them how much you can pay in this year and next.

@caringcarer

Stocks and shares ISA and in April repeat. Alternatively use £50k deposit for a btl. The house will go up in value and you can sell if you need to. Get an agent to manage.

And how do either of those tie in with the OP's objective to have access to her savings in two years?

Could you turn your mortgage into an offset mortgage?

Depending on where you are in the mortgage period you could remortgage to an offset mortgage and put the £70k in there to reduce the interest paid on the mortgage. Then any more money can be added easily. You can also use it easily instead of tying it up for long periods of time.

@Mumblechum0

That product sold its share of Tesla recently so you may notice a difference.

@cloud, I know 😟. So far though,it’s still been an outstanding investment. DH, DS who’s a derivatives trader), and I all have q large chunks of our portfolios in SM so we’re watching carefully!