Where would you put £10k of savings?

[Bigredriding]

We have about £10k which is doing nothing in a high street bank account. I’ve had a little look at investing in shares and would like to do this, but it looks confusing and as though it would take a lot of time and energy. I’ve heard Premium Bonds are only marginally better than a savings account. We have a mortgage and could pay some of that off, but would prefer to have the money accessible for home improvements/emergency etc and grow it a bit if possible. We’re quite young and have a long time on the mortgage left, so it would be a bit of a drop in the ocean.

Does anyone know anything about buying shares? Or what would any good with money mumsnetters do?

Is your mortgage account offset? I would do that, or premium bonds. Or a private pension.

Half in a cash ISA and half premium bonds?

I use premium bonds for anything I’m likely to need access to within a year I’ve won lots of times and probably more than id get in savings account

I wouldn’t invest in individual shares unless you can afford to lose it. The market is very volatile at the moment and if you don’t know what you’re doing, you’re basically gambling. Don’t forget you will also need to pay brokerage fees when you buy or sell, so if you’re dealing in small amounts, the brokerage can wipe out any gains. A lot of firms aren’t paying dividends at the moment so that’s another negative. If you want exposure to shares, you could look at a FTSE 100 tracker as an alternative, but you need to think of it as a long term thing.

Interest rates are very low at the moment across the board so it is hard to get decent returns, but I like my premium bonds. I have £30k invested and win something most months and there is always that chance of the £1m!

It's not advisable to buy shares with money you want to be "accessible", and there's really no sensible interest rates anywhere. So you can't really grow the money.

In fact, with such low interest rates you're better off spending the money. If you do need a kitchen, you might as well buy it! Wherever you put cash it won't keep up with inflation.

So, buy something of value to you, or pay down the mortgage a bit.

I would get premium bonds

Stocks and Shares ISA? That would mean any returns or growth would be tax free:
www.moneyadviceservice.org.uk/en/articles/stocks-and-shares-Isas

Or, Lifetime ISA? Now you can’t access this for anything but retirement because you own a house already. But the government top up what you put in by 20%.

ISAs have annual limit, so you might have to deposit 5k now and then 5k after 5 April (next tax year).

Premium bonds without a doubt

@PlanDeRaccordement

Stocks and Shares ISA? That would mean any returns or growth would be tax free: www.moneyadviceservice.org.uk/en/articles/stocks-and-shares-Isas

Or, Lifetime ISA? Now you can’t access this for anything but retirement because you own a house already. But the government top up what you put in by 20%.

ISAs have annual limit, so you might have to deposit 5k now and then 5k after 5 April (next tax year).

The annual limit for an ISA is £20k.

It's a bit worrying that someone suggesting someone gets one doesn't even know the current limit.

@VanGoghsDog

It's a bit worrying that someone suggesting someone gets one doesn't even know the current limit.

How so? I live in France. So excuse me for not knowing all the details of foreign savings vehicles like U.K. ISAs. At least I know enough to suggest a tax free way for OP to save money in stocks and shares unlike everyone saying “premium bonds” which will cause taxes to be due.

Premium bond wins aren't taxable.

Also worth remembering that the first £1000.00 (per annum) of savings interest is tax free (and up to £5000.00 if you are on a lower income).If you pay the higher rate of tax it's only £500.00

www.gov.uk/apply-tax-free-interest-on-savings

In short, shares come with risks - they can go down as well as up. Premium bonds are safe; and you could potentially win a big prize with no risk. I know which I would choose in such uncertain times.
I only had mine a couple of months and I had a small win (better interest rate than I could have got elsewhere)
I would have kept them but they were needed for bills

This is good on whether PBs are worth it:

www.moneysavingexpert.com/savings/premium-bonds/

We have an offset mortgage as suggested above.

I've got similar savings.

I've got around 9k in premium bonds because I like the idea of the big win and it's not doing a huge amount elsewhere.

I've got £1k in a sharesave at work so the money is always safe and I can have it back or buy the shares at the end of it.

I've just started saving a small amount (£75) each month in a very high risk stocks and shares ISA. I know it's not lots, but I don't want to "risk" lots of money being lost. I can afford that. The three year prediction looks interesting. But it is just that. A prediction and I could lose money on it.

Last year I researched appropriate savings vehicles for some money DH and I had in a high street bank savings account.

We discounted stocks and shares because every recommendation is to commit your cash to a minimum of 5 years. Whilst we don't need immediate access we realised that we might want the cash during a period when share values had fallen and we'd be unable to ride it out.

Eventually we decided on Premium Bonds. We win something every month (£25 up to £125) and we've quadrupled what we would have got in interest from our former amount (although it's still quite low!).

@SadderThanEeyore

In short, shares come with risks - they can go down as well as up. Premium bonds are safe; and you could potentially win a big prize with no risk. I know which I would choose in such uncertain times. I only had mine a couple of months and I had a small win (better interest rate than I could have got elsewhere) I would have kept them but they were needed for bills

Premium bonds aren’t that safe. They’re essentially lottery tickets to a prize draw. No interest is paid, and they will lose real value due to annual inflation.

“With Premium Bonds, there is no interest earned. Instead the interest rate funds a monthly prize draw for tax-free prizes. Remember that inflation can reduce the true value of your money over time.”
www.nsandi.com/products/premium-bonds

They are subject to inheritance tax though.
www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm10082

Premium bonds.
Already won £75 since September on £5000 investment. Friend has the same and won nothing so luck like with everything,

Premium bonds

It's like 10,000 lottery tickets and you can access easily if needed.

We win virtually every month

What taxes are due on premium bonds?

@AuldFox

What taxes are due on premium bonds?

Inheritance taxes.

To be honest, interest rates are very low everywhere at the moment.

I've had £1K in premium bonds for decades and won hardly anything. DP has around the same and has had a few £25 wins over the years. It's very random.

I invested a lot in NSI bonds when their interest rates were over 2% earlier in the year (talking about a lot more than your £10K) but now the rates have dropped an aren't much better than ISAs.

The only way to get high growth is high risk stocks and shares but you risk losing a lot of your capital unless you know what you're doing.

TBH £10K isn't a lot in terms of an investment (don't mean that in a nasty way) and the best you can hope for at the moment is to keep pace with inflation....so any ISA paying up to 2% is your answer and one where you can access the money easily or lose the interest if you take it out early.

Premium Bonds. Then download the app.

@MarthasGinYard

Premium bonds

It's like 10,000 lottery tickets and you can access easily if needed.

We win virtually every month

I've had PB for decades and won bugger all.

You only pay tax on premium bonds if the annual amount paid exceeds a threshold, which is linked to your tax band. Do for most people, it is tax free.