50k what would you do?

[topsyturvypants]

What would you do with 50k if it was your only money in the world? Ie no assets, property etc.
I'm interested to know peoples thoughts on investing at the moment.

Pay off my electricity bills, and not worry about them for a couple of years.

More seriously, round here I could buy a small property outright, and probably would.

Invest. Pension for the tax relief.

I too have saved up this amount of money or thereabouts and it's just sitting in a savings account. I don't know what to do with it.

• How old are you?
• Are you currently in work?
• If so, are you in good health and expecting to work to state retirement age?
• Is it secure employment?
• Do you have a pension?
• What are your family circumstances, ie do you have DC you may need to support at Uni?
• What are house prices like where you live?

Thanks for your replies.
Yes I'm in work but not very well paid as I'm in the arts as is my husbands. 2 children to support for a good few years yet, yes have a pension but not a good forecast. Expensive area and house prices ludicrous. ....

I'd put it into an index fund such as the S&P 500. Since it began it has an average yearly return of 10%. Leave it in there until you need the money for something and it will grow over the years much more than it would sat in a savings account. Also relatively low risk, although investing will always pose some risk of course. The rewards will be worth it.

Assuming you have no debts:
Ensure you have Life Assurance for both you and DH plus also critical illness cover.
Invest in your pension, either in a LISA or a SIPP depending on your age. Check deadlines for end of year if you want to invest in 2021/22.
Set aside 3-6 month income in an easy access savings account / potentially Premium Bonds.

Investments would be the wise choice. If you don’t want to do that then stick it in NSI premium bonds while you decide - someone with £50k has far higher odds for winning £25. When I had 50k in bonds I was getting 25-50 a month for 2 years.

Personally, if I didn't have any savings or debts, I would work out what 6 months of my outgoings were (not salary, but what you actually spend in 6 months - rent, bills, food and commitments you can't get out of like phone contracts etc).
Then take this amount from the 50k and put it somewhere accessible, but that also pays the best interest rate you can find. Interest rates are crap at the moment, so maybe premium bonds?
I'd put the remaining money in a stocks and shares ISA, invested in a low cost tracker fund. Limited to how much can be paid in over a year, but could put this years max in and then pay in the remaining money next year.
If you qualify for a LISA and want to save up for a house deposit (or lock some money away for retirement) I would investigate this and consider putting some money in there (limited to a max of 4k a year though).

Thanks everyone, lots for me to read up on there, thank you.
I'm looking at the tax implications with all of these options, any words of wisdom With Minimising tax on investments?

I’d use it as a deposit to buy a property. Otherwise I’d put it in a S&S ISA.

ISAs are tax efficient, you don't pay tax on interest or returns, and you don't pay tax when you cash it in. But you are limited to how much you can pay in each tax year.

Lifetime ISAs (LISAs) are not only tax efficient, but the government will pay an extra 25% in for you! So if you pay in 4k (the max each tax year) you will get an extra 1k on top. Plus returns on the investment.
But you have to have the account open for at least a year to get the bonus, and it is only available to certain ages.
Also, if you cash the LISA in early you lose the bonus. The LISA is intended to be used either towards a house as a first time buyer, OR when you reach pension age (or maybe it is 60?) So taking the money out before this age, and not for a house deposit, will mean you lose the extra bonus.
Martin Lewis on Money Saving Expert has a good article on LISAs which is worth checking (they wont be right for everyone).
Actually there's quite a lot of good info on that site which might be useful to you if you haven't looked already.

Thank you, yes his website is great and very clear for a novice like me. Unfortunately my partner and I are mid 40's so we don't qualify for the LISA which is annoying.... so it's looking like it's stocks and shares is probably the best option at this stage .
Thank you for all the advice, I really appreciate it!

I had about 15k in a cash ISA for a few years and am really pissed off with myself that I didn't put it in a S&S ISA. I would have put some of your 50k in a S&S ISA.. (max 20k per year I think?), and some in premium bonds. Adding to your pension might be a good idea, but I don't know much about that.

I actually was in this position and used it as a deposit on a house. We did also need a mortgage, would you qualify for one?

Oops, sorry, I see you already said you're in an expensive area. S&S a good choice then. Vanguard is popular with beginners.

If you’re thinking of stocks and shares isa the limit is £20k per person so you could open 2. With the remaining £10k you could either top up your pensions or save in a General Investment Account (with the same provider as your ISAs)

Real world inflation is currently around 10%, so if it is just sitting in a bank getting 1 to 2% interest it is losing value by the day.

There is no simple answer, unfortunately, but essentially you have two (combinable) options. Either invest in something like stocks or shares through an ISA and/or pension (though once it's in a pension you can't touch it until you reach 55, going up to 58) or spend it on something which is of value to you. A house would be best, but if that's not possible things like furniture or even a car that will last for a longish period so that you get the value.

Deposit for a house. You don't want to rent in retirement.