Should I switch cash savings earning 4% into an ETF?

[Touty]

Cash savings earning 4ish %

I live off the interest on the savings. Should I invest in an ETF instead?

Depends the time frame of when you need to access the money. Stock markets is long term, 10 years, the shorter you go the riskier it is.

@1wer ok, im 53 and not working.
no real private pension. Own my home outright.

Sounds like you need the money to live off so keep it in cash.

Any money you don't need to access for the long term i would put into a sipp for the government top up (2880 cap per year for non working ppl) then stocks and shares isa in a fund that matches your risk appetite.

General vibe is there is a going to be a big dip soon in the markets so I would wait for that not exceeding the tax year.

If you have 4 years ish of expenses in cash, then the rest can be invested. The cash is a buffer which you spend from and replenish from the investments in good times. It does have risk as markets can be down for long periods, so you may be selling investments in a falling market, but there is no gain without risk.

Read about Cashflow Ladder approach, where money you will not access for 10+ years is more aggressively invested than money you will use in only a few years time.

Revolut is offering 5 percent on instant access cash savings accounts.

Agree with @nannynick and also @1wer point about paying into a pension.

Are you now not expecting to work again so you need an income to take you up to state pension age?

Keep what you need for the next 2-3 years in cash.

Check what age you can withdraw from a pension - at 53 it could be 55 or 57, depending on your date of birth. But obviously you don't have to withdraw at that age, much of it could stay invested for decades.

But in any case, pay £2880 per year into a pension as it will be topped up by 25% due to tax relief and you'll be able to take at least 25% out as income tax free, possibly more if your income is below the personal allowance.

Make sure you use your ISA and personal savings allowances each year, but yes, after pension contributions and keeping the next 2/3 years of expected spending in cash, you should be investing.

Meaningful Money is excellent for learning about managing money in preparation for retirement and has a good explanation of the cashflow ladder:

The Ultimate Guide to Retirement Investing: Build a Cashflow Ladder - Meaningful Money – Making sense of Money with Pete Matthew | Financial FAQ

If it's in cash and you live off the interest, is there enough interest for you reinvest so the balance keeps pace with inflation?

How long are you planning to live off this interest?

What's your plan for when interest rates inevitably drop below 4%?

If you do put it into the stock market, is there enough to divide it and keep a couple of years cash buffer while still providing enough growth from the invested pot to live on?

Why are you not working - is it ill health that means work will never be a future option, or could you go back to work if finances required?

Too many questions to be able to give an answer. You need to model the possible scenarios. All will have risks, so you have to decide which risks are least likely and what you can hedge against.

There’s nothing left over once if paid living expenses, if expenses rise I’ll have to take it out of savings.

Savings could last until state pension age. Could also equity release, no one to leave it to.

Work, well it’s complicated. I do want to but I don’t know what I want to

im in a bit of a rut