What is the best place for extra savings once ISA is maxed?

[Delphigirl]

Hi, I would be grateful for advice. I have a regular monthly amount going into 2 ISAs which add up to the £20k a year max. I am in the v lucky position of having an insanely good final salary indexed linked pension so do not need further pension provision. No mortgage. Because of promotion, reduction of school fees etc I have an additional 2-2.5k-poss £3k per month to invest somewhere. Is it best to just put it into some fund which has a different profile to my ISA funds, or is there something else tax efficient or high growth I should do with it? Any particular funds that I should look at? I am early 50s, work full time, will retire in 10-15 years or so, will be high earner until then even if I go part time before retirement. I know I’m in an unusually lucky position. Many thanks.

Invest in for youngsters in your life. Junior isa or junior sipp. Alternatively in a vanguard index fund for yourself but there are tax implications. What do you do date one ask?

Normal stock broking account - remember your capital gains allowance of £12.3K pa. Research VCT's There's always a holiday home/let.

Thanks both. Thinking of buying a bit of gold to hedge against equities and inflation and I understand if I buy coins it is vat and capital gains tax free. Good idea, dumb idea? Gold price is high but I think will be more likely than not to go higher in the med-long term...

You say you’re paying into 2 ISAs - is one of them a cash ISA? What’s the interest rate at the moment - the vast majority don’t offer anything higher than bog standard savings accounts so in my opinion it’s a waste of your ISA allowance - I’d be putting everything into your S&S ISA and just open the highest interest savings account you can for the cash (or stick them in premium bonds).

Outside from that - assuming you don’t want to maximise tax efficiency via your pension or opening JISAs etc then I’d open up a General Investment Account and stick the rest in there. If you’re happy with the way your S&S ISA is performing you can just match it.

No they are both S&S isas. They are really one ISA but with two different portfolios within it with two different risk profiles/asset allocations.

Max out £50k premium bonds? With that much invested its likely you'll win something most months, it's instant access (we'll within 24 hours) so you can always withdraw if it doesn't work for you.

Premium bonds would be my choice also.

I wouldn't invest in gold as a) it's volatile and b) I don't want to support mining on ethical grounds

Just get a general investment account and replicate your ISA. Fill your ISA and then next year Bed and ISA to clean down the gains in your GIA and feed your GIA for next time.

Watching with interest. @Dindundundundeeer can I ask you how the GIA works in terms of tax? I understand that annual tax would be due on income or dividends as above £500 or £1000 (depending on your salary) AND that CGT will be payable above a certain value once you sell, again if it exceeds your allowance. Is that right? But I'm struggling to understand the CGT - does that plus annual tax not mean you end up being taxed on your 'profit' twice?

It does indeed mean you can get taxed on your profit twice if you use accumulation units. If you use income units, you could reinvest and that would rebase that money.

To be honest if you have >£12.5k of gains, it’s not something anyone is going to be sobbing about on your behalf I’m afraid!

Also it’s dividend tax that is due on any equity income so a different to your savings income.

@Dindundundundeeer many thanks. Nowhere near that cap, hadn't realised it was that high.

Quite honestly, and I realise you may be doing plenty in this vein anyway without having mentioned it, I would ask myself the question when is it enough for me? If you have more money than you know what to do with/have goals for, I am firmly of the belief it should be spent or given to charity, not pointlessly hoarded.

But specifically in investment terms I would be maximising my children's positions ie JISA, pension, Lisa if post 18. Again depending on my goals for them and how much I am happy with them having at 18, in the case of the JISA. Only after that would look for a general fund and share account.

I also meant to say well done on your hard work Dashel.

And that I am starting a Death File, for ease of administration in the event of my unexpected demise. My DH is a total ostrich, I run our financial affairs, which creates significant risk should I die unexpectedly.

Have you set up unit trusts and/or pensions for your kids?

Sorry that second post is meant to be on a different thread

Unit trust for kids need a wrapper

Pensions for the children, free £720 a year if they aren’t tax payers, a no brainer IMO. Tax efficient options include VCTs, and EIS schemes. I would a small amount in to P2P, in one of the instant access accounts.

Assume you have got a sensible cash savings pot, and have done the normal planning things, e.g. wills?

Have you thought about part time work sooner than you might have originally planned or even stopping completely long before 67?

It sounds like you have lots of options, you just need to work out your priorities.