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20k savings..what would you do?

53 replies

mikado1 · 28/06/2023 15:48

I have a lump sum in my current account. It was once savings but the bank closed down so I now don't officially save and I'm making nothing on it (and I'm probably spending more than I should because it's there). I have no loans or debt, bar mortgage. I'd like to get some interest on it or maybe invest but I am clueless. What would you do?

OP posts:
BuddhaAtSea · 28/06/2023 15:49

ISA?

mikado1 · 28/06/2023 15:50

I'm in Ireland and don't know if we have that here.

OP posts:
eczemamummy · 28/06/2023 15:51

Overpay on mortgage xx

Caspianberg · 28/06/2023 15:53

I would overpay mortgage by £10k now. It will save more due to interest rates increasing

ShanghaiDiva · 28/06/2023 15:55

Fixed rate bonds. You can get 5.67% with charter savings fixed for one year. That’s for uk residents. Worth investigating offers Ireland.

SusiePevensie · 28/06/2023 15:57

Overpay the mortgage

mikado1 · 28/06/2023 15:59

Oh really? Mortgage overpay seems to be the most sensible? I was wondering if maybe a clever investment would be a good idea. I see ISA has a be started by 40 so I'm too late for that unfortunately.

OP posts:
catsnhats11 · 28/06/2023 16:02

Don't overpay the mortgage if you've got a good (low) rate. Get it out the account its in now though, your effective losing money on it! Premium Bonds?

mikado1 · 28/06/2023 16:07

Again I think in Ireland we don't have premium bonds but a strange thing called prize bonds! These enter you into a weekly draw!

OP posts:
ThisIsACoolUserName · 28/06/2023 16:18

I used half (£30k) of my savings (£60k) to pay off a chunk of the mortgage.
So for you £10k off the mortgage might not be a bad idea.

ChittyBangabang · 28/06/2023 16:21

catsnhats11 · 28/06/2023 16:02

Don't overpay the mortgage if you've got a good (low) rate. Get it out the account its in now though, your effective losing money on it! Premium Bonds?

Sorry but that is terrible advice. This is exactly the time to pay a lump sum as you're not paying as much interest and will make a big dent in the core.

Plexie · 28/06/2023 16:22

Find out what sort of interest rates on savings accounts are being offered in Ireland. A quick search suggests they're currently very low, around 1% or less.

Realistically you won't get much income on such low rates, but putting the money in a different account might stop you spending it so easily!

Longer term, do you have any other savings? Advice is usually to have enough money to cover at least 6 months' worth of outgoings (ie bills etc, not 6 months' worth of income). Then think about other options. Cash savings are safe in that you won't lose money but are unlikely to grow much when interest rates are low. Investments are usually better in the longer term but there's a risk to your capital (ie you can actually lose money) and it can be a rocky road when the markets fluctuate and you need to sit through the value of your investments plummeting, in the hope they'll increase in future.

greenspaces4peace · 28/06/2023 16:23

Investments are not doing well so far this year. Really avoid that. Simply find the best interest rate savings type account.
and yes buy down the mortgage.

CosyFanTucci · 28/06/2023 16:25

With some mortgages you can pay off a lump sum without penalty when your deal is due for renewal. So, if you're on a low interest rate currently, you're better off earning higher interest in an ISA (or equivalent), bank the interest, then pay off more of the mortgage before you move to a higher rate.

userxx · 28/06/2023 16:25

Chip is easy access at 4.21% which is decent. I wouldn't fix anything at the moment as interest rates will go up.

LondonLovie · 28/06/2023 16:26

On overpaying the mortgage that depends on your mortgage rate. If you have a low interest rate, you are better off putting the money in a bond, getting interest (which maybe higher) and then paying off a lump at the end of your Curent mortgage deal, and gaining the interest

mikado1 · 28/06/2023 16:35

Ok thank you all. I realise I sound v clueless. We upped the monthly payment of our mortgage last year so that is fixed for a few years anyway and means it will be paid off in 12 years, mid 50s. I will look into other bonds here or just get it out of account. Our State Savings might be the safest bet.

OP posts:
topnoddy · 28/06/2023 16:54

Buy a few tins of Heinz soup !

Freyya · 28/06/2023 16:57

mikado1 · 28/06/2023 15:59

Oh really? Mortgage overpay seems to be the most sensible? I was wondering if maybe a clever investment would be a good idea. I see ISA has a be started by 40 so I'm too late for that unfortunately.

Sounds like you’re thinking of Lifetime ISAs which have to be started by 40. Other types don’t have this rule!

Heatherbell1978 · 28/06/2023 17:02

Savings rates are a high. Overpaying your mortgage is only wise if your mortgage rate is higher than the savings rate. ISAs should always be your first port of call for tax free savings and if you can fix your money away there are great rates out there on fixed terms like 3 years. Be aware that you will potentially pay tax on savings if not in an ISA. Lower rate tax payers can earn £1000 a year tax free and higher rate can earn £500 a year. But if you're not UK based all of this might not be true!

newtb · 28/06/2023 17:42

Ask an accountant - look for someone with ICAI qualifications. Ask for a quote for finding an investment product. Don't whatever sign a letter of engagement before you know what there fees will be.
They will be knowledgeable about death duties - forward planning isn't a bad idea.

An IFA won't necessarily be up to speed, and solicitors often ask their accountants to check their calculations.

The legal 'stuff' as part of the ICAI means you have to know off the top of your head all sorts of numbers for company meetings. Lawyers get a much easier ride imho in not necessarily having to have tax info at their fingertips.
Nothing like being at a client and being asked about numbers needing to be present and votes etc for some obscure meeting buried deep in the Companies Act.

Cures constipation very quickly in my view. I hated company law with a vengeance and felt there should be a 2-way exchange.

Don't ever go to one of the big investment firms. We were told the cost of an investment report would be 250€.
It was. They 'forgot' to say it was their hourly rate. We were invoiced 1000€+VAT, as plugging in figures into a template with mail merge to produce our personnalised investissement report wasn't 4 hours work. He then drove his Audi xxx from Bordeaux to us to 'present' our report.

A well-formatted email would have done the job.

The firm was so good it was taken over by another and a question I asked in 2014 about which country non-property assets are in, is yet to receive an answer.

Bank accounts are up in the clouds somewhere. A house cannot be moved from one country to another, normally. Property is subject to inheritance laws and death duties where it sits.

Live in France, buy a burial plot in tbe UK and the French tax can't touch you for tax at rates up to 80% payable by non-blood relatives max allowance is 150k€ for children.

My uncle born in France has lived in the UK since the war. He told me he was moving back once I was there. From a mod cons bungalow to a damp wattle and daub farmhouse from 1762. A sheep pees on it and it falls down in a mud pile, like the one where he was born.
I asked him if he liked paying tax and how much his estate with my aunt would be worth. No tax in UK. 480,000€ in France.

He cackled at me as I suggested he stayed put. He'd no intentions of doing anything else. Just testing me. Bastard!

gogomoto · 28/06/2023 17:53

I secured a savings bond at 6.2% this week, something like that maybe?

Catmummyof2 · 28/06/2023 18:19

This reply has been withdrawn

This has been withdrawn by MNHQ at the poster's request.

Summerishereagain · 28/06/2023 18:22

mikado1 · 28/06/2023 15:59

Oh really? Mortgage overpay seems to be the most sensible? I was wondering if maybe a clever investment would be a good idea. I see ISA has a be started by 40 so I'm too late for that unfortunately.

LISA need to be started by 40 but you can open an ISA at anytime.

RagzRebooted · 28/06/2023 19:20

ChittyBangabang · 28/06/2023 16:21

Sorry but that is terrible advice. This is exactly the time to pay a lump sum as you're not paying as much interest and will make a big dent in the core.

Actually better putting it in a high interest account then using to pay mortgage when current low rates end.