£26k which savings account to put in

[Eggybreadwithnuts]

So my dilemma or asking for thoughts on this. Ive got £26k coming to me (inheritence). Plus each month DH wants to put his pension cira £1,300 away, as he's still working so want to save/put away.

So we're planning on doing this:

£20k into a 1 year Isa, that will gain interest
The £6k balance, using for home improvements
AND
Monthly pension, savings...just into a savings account prob with bank we use or should we look for one that gives us the highest account???

Anyone

Do you know what you intend to use the savings for / when you might access the cash? I think an ISA is a good idea and, unless I were expecting to use the funds soon, I would look at a stocks and shares ISA rather than cash ISA as they tend to generate better returns (but they do entail more risk).

Do you have premium bonds?

They are also tax free so can be useful if you’ve maxed out your ISA allowance for the year. Then at the start of the next tax year transfer into the ISA.

Next year’s ISA allowance will be lower for cash ISAs, so if you hit the maximum then you probably want a stocks and shares ISA for the rest or leave it in the premium bonds if you’re very risk averse.

Trading 212 currently has a 4.5% year long cash isa which is probably the best interest rate you will get on cash at the moment. It’s a very easy platform to join and navigate.

Assume you’re both debt free (aside from any mortgage) and have a fully funded emergency fund (3-6 months worth of essential expenses) then I’d max out both your annual ISA allowances, S&S ISAs will have better returns the longer they are invested. Why only paying extra into his pension? Yours can be topped up too.

No mortgage or debts.
Ooo never thought of premium bonds!!! Good call

Returns on £33K in my PBs are currently at 7.1%, which is better (and more fun!) than any bank or ISA

The interest on £26K in premium bonds will be much less than either a S&S ISA long term or a high interest Cash ISA short term. Use your ISA allowance or use it to supplement your income while you put money into YOUR pension.

Premium bonds are fun but they are called poor people's savings.
I have then but only for tax.
Id start with a few grand in a stocks and get used to it then build up to more.
Index funds USA .
Have a little in pb but not much.

Also you can open a sipp if you need a pension

Repeated post

Ive also got a pension from I company worked for 30 years ago!!! I asked for a statement and it came through as £28k ...so I need to know what Im doing with that too at some point 🤯

@gokartdillydilly but if your on our mn pb thread you just know that's not the usual case.

Also stocks can...can double every 7 ISH years.

And i find watching it going up very exciting !

@Eggybreadwithnuts
Again with that amount is move it to a sip under your control .

With stocks you want diversification eg loads and loads of companies across many different sections like tech ,banks ,mining and so on . USA is usually best looks at vanguard funds .

Nahhh not interested in stocks and shares.

No, I'm not on that thread, just wanted to share my own experience 😊

Martin Lewis has lots on his website about premium bonds. With the current prize rate of 3.3% you are likely to average winnings of 2.8% on a holding of £26k

@gokartdillydilly it's on the money section here and good fun we all gather each month in anticipation and then share pot size and winning amount or non win

Stocks and shares ISA. Worldwide tracker like HSBC’s all world.

Watch the Martin Lewis episode that was on last night all about it.

People are not getting the money they could be by putting it in savings accounts or premium bonds.

But if OP is retiring soon and might need access to her money within the next 2-5 years S&S might not be a prudent option. So it all depends.

This is the last financial year you can put up to £20k in a cash ISA so I would put £20k in one of those, the rest in an easy access account like the one Chase does at 4.5%. Premium Bonds should be the option after you’ve exhausted ISA’s and savings accounts and when you have a lot more money spare than what you have now.

@ValenciaOrangeJawline good point. However if she can wait that capital will give her a small income if she skims off 4% when the stocks are up. Retraining her initial investment.
I can't see how she could draw on it in cash without eventually depleting all her capital ?
And she certainly couldn't rely on an income from pb. Usually people spread their money around a little to protect the stocks capital
But op isn't interested anyway.

Personally I would put it in a stocks and shares ISA. I'm gradually reducing my premium bonds as the return is so hit and miss

You can put it in mine if you like!
I'll see myself out…

True. But I'd personally hate to see £26k in a basic savings account earning hardly anything/barely keeping up with inflation if it was 5 years. Its much more likely to gain a decent amount in a S&S ISA.

We need more details really.