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Original poster

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 · 29/06/2023 22:23

Usernamenotavailab · 29/06/2023 21:07

No. You’re comparing the entire mortgage to a lower amount in savings.

say my mortgage is 100k. I pay 2% interest which is 2000 per year.

I have 20k in savings. At 5% I earn 1000 per year.

so overall I am only paying 1k interest.

now if I use that 20k to pay off my mortgage, I will pay 2% on the remaining 80k- £1600.

so paying off my mortgage I am worse off by £600

follow?

Show quote history

Yes! Thank you.
I am in exactly the same situation as the OP, a small mortgage and savings. I am keeping the savings in high interest accounts, but I also overpay by £100 a £250 a month mortgage, because it lowers the interest even further. But that’s definitely not what I wrote 😂

fufulina · 29/06/2023 22:27

Your mortgage rate and term will define if paying a lump sum off the mortgage is worth it. If, for example, you have a two year fixed mortgage at 3.5% and can get a two year fixed bond at 5.5% clearly don’t pay the mortgage off - yet. Bung it in a cash ISA. It is certainly not terrible advice to earn more on your savings than you pay on your debt.

Earlystartsmakemegrumpy · 30/06/2023 20:27

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!

For £20k?!

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