Making savings work

[IcarusFlies]

If you had £60k, what would you do with it? Currently 50k is in an ISA that hasn’t been changed in years. At a loss as to where to begin, but need to stop my ostrich approach…

Move it to a higher paying isa?

What are they for?
When do you need to access them?
What other savings or debts do you have?

Definitely think I should move to another ISA, just wondering if I should be doing anything else. Don’t need access to the savings in the near future, this includes a cushion in current account. No debts to consider, no other savings.

While interest rates were lower would have suggested a stocks and shares isa. But for now a cash isa also a good bet. What rate is it on?

How are your pension savings? And how old are you?

Is it a cash ISA? You can easily get fixed rate ISAs paying at least 5% interest at the moment.

If you move the money, make sure you 'transfer' it between ISAs - don't withdraw the money as it will lose its ISA status. Maybe split the £50k into 2 or 3 fixed rate ISAs with different durations. They'll mature at different times and that can cushion you from changes in interest rates.

How much is the cushion in your current account? Does that account pay interest? You might find an easy access savings account that pays more. See if your existing bank has one, as it's then easy to move the money between savings/current account if you need to spend it.

If you haven't used this year's ISA allowance, you could put some of the £10k in an easy access ISA so that it's accessible. Some have limited access (eg up to 4 withdrawals year) and have a higher rate than an easy access version.

Building societies that offer consistently good rates include:

Coventry Building Society
Leeds Building Society
Kent Reliance

If you're generally reluctant to keep on top of moving savings, I'd recommend a fixed rate ISA with one of the above because when the account matures they will automatically reinvest the money in an account with a similar duration, unless you give them instructions otherwise. As their interest rates are consistently good, you'll safely be getting a decent rate in the new account, rather than languishing year after year at a poor rate offered by many other institutions.

I’m in my early 30s. Hard to say how my pension is - I’ve been paying in for seven years but don’t know what I should be aiming for.

Very grateful for the advice so far - I will look at those providers!

I agree that to start out, just transferring it into a cash ISA with a decent interest % will be miles better than what you’re doing now. Figure out how long you’re comfortable locking money away for and then do it - I second the recommendation to have some longer terms and some shorter.

Once you’re comfortable you can think about putting some in a S&S ISA (noting you can only open one new ISA per year even if you transfer).

If you’re happy thinking long term (5+ years); using something like vanguard and putting it in an index fund may be something you’d like to explore.

I came back to say I’ve finally got round to transferring my ISA to Kent Reliance. It took under 5 mins for a 5% rate so I’m furious I didn’t do it sooner! But better late than never.