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Original poster

What to do with £6k

44 replies

Rainyshowers · 04/02/2018 13:34

I am being gifted £6k. I am a home owner and are fine paying the mortgage. I would like the money to be saved/ invested for the best possible return. I would like to access it in around 5 years to put into moving house. This may not happen but s a possibility.

I have very minor savings. Say £1k.

I am not financially knowledgeable so any advice as what to do would be great. I'm a SAHM but will return to work in a few years. I voluntarily pay £50 month into an Aviva pension too.

OP posts:
Babyroobs · 04/02/2018 13:44

You could put it in one of those save to buy Isa's where the government give you an extra 25% or something as long as you use it to buy a property.

MyBrilliantDisguise · 04/02/2018 13:45

You can only do that if you're not a homeowner already, though.

Original poster
Rainyshowers · 04/02/2018 13:46

I already own a home and have a mortgage

OP posts:
flyingfromage · 04/02/2018 13:49

Who is your mortgage with? If it were me I’d over pay my mortgage. Rbs have a tracker which shows how much overpayments will reduce your mortgage term by. For me 5k was some thing like 5 years and 11k of interest. I’m not very savvy on interest etc but I’d prefer to pay less interest overall as rates are so low just now you’ve no chance of making anything like that much in interest by investing.

flyingfromage · 04/02/2018 13:50

I think I win the prize for using interest in the same sentence the most times.

Scabetty · 04/02/2018 13:54

I would use it to reduce my mortgage term.

KanielOutis · 04/02/2018 14:16

Is there any jobs that you want to do in the house? New bathroom, carpets, plastering, decorating, furniture? £6k could go a long way.

Original poster
Rainyshowers · 04/02/2018 14:35

Yes there is lots I could improve in the house but I want the money to be saved/ invested rather than spent.

OP posts:
RandomMess · 04/02/2018 14:38

It's not going to earn much being invested, can you overpay on your mortgage?

Look at the best savings rates your bank offers, have a look at fix bonds and ISAs

littlebillie · 04/02/2018 14:55

Premium bond £2k remainder into cash isa actually the post office has 1.45% for one year. It's not exciting but you need more than £1k as a buffer at lest this way you may have a win with premium bonds and you will secure a decent interest in the next 12 months

Original poster
Rainyshowers · 04/02/2018 16:09

So my mortgage rate is 1.89%. Am I better paying off some of that then putting it into an ISA at say 1.45%. Because I would save more on mortgage rate then I could save in an ISA?

I'm interested in @littlebillie your suggestion of a premium bond.

OP posts:
Original poster
Rainyshowers · 04/02/2018 16:15

We have £1k savings and my pension is pittiful. Only £2k and I'm early thirties. I was thinking to put it in my pension so I get the tax 20% added. But then I thought it would be better to use it in 5years if we buy a new house based on two people earning. At the moment our mortgage or based on one income. So to make the next step up. To me this makes more financial sense then to put in in a pension.

OP posts:
mathsquestions · 04/02/2018 16:25

Paying off mortgage is your best bet and keep monthly payments the same. Can you bump up your monthly payment a little; will push your mortgage life even more

Original poster
Rainyshowers · 04/02/2018 16:27

Yes I can overpay on my mortgage. I already overpay by £100 a month. But I can put in a lump sum of £6k with no charge. I've checked.

OP posts:
Original poster
Rainyshowers · 04/02/2018 16:29

But maybe I should put it in a pension?

OP posts:
SvartePetter · 04/02/2018 16:31

Stocks and shares ISA. Low cost passive investment fund or ETF. Vanguard is normally good. I had a 15% return on investment last year. This is not risk free, but if you choose a widely invested fund ( many companies) then you are well diversified.

TalkinPeace · 04/02/2018 16:32

I would say premium bonds

its too small an amount to be worth putting into a pension
your mortgage rate is low enough that it will not make that much difference
cash ISA rates are dire

pinkcarpet · 04/02/2018 16:36

You need to work out your timescale here. If you definitely want to use the money within 5 years keep it as cash or buy a fixed rate bond/bonds for 1,2 or 5 years. If you’re actually happy to tie the money up for longer then put it in a stocks&shares ISA or if you only want the money in retirement put it in your pension. You said you’re a sahm at the moment so presumably you currently don’t pay any tax and your £50 a month into Aviva comes from DP salary?

flyingfromage · 04/02/2018 16:48

How long is your mortgage fixed at though? It won’t be 1.89% forever

TalkinPeace · 04/02/2018 16:51

How long is your mortgage fixed at though? It won’t be 1.89% forever
Could be
I never fixed any of my mortgages and sometimes paid less than that

Original poster
Rainyshowers · 04/02/2018 16:52

Yes the £50 a month pension is from Dp's wage. The mortgage is fixed for just under 5 years now.

OP posts:
Original poster
Rainyshowers · 04/02/2018 16:54

Sorry the mortgage has another 4 1/2 years at this rate.

OP posts:
NameChange30 · 04/02/2018 17:03

You mention a DP, not a DH. So in my opinion the best investment would be to use some of your money to get married. Of course a no frills registry office wedding is very cheap but the money would allow you to have a modest celebration if you wanted.
Marriage will give you financial protection if your relationship ends or your partner dies. As an unmarried SAHM you’re in a financially vulnerable position. Are you joint tenants or tenants in common on the house paperwork? Are you on your partner’s pension? Do you both have wills naming each other as the beneficiary?

user187656748 · 04/02/2018 17:07

Id pay some off the mortage

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