Does anyone else ONLY save into Non risk accounts?

[investmentquandry]

Having been badly burned with a shareholding I had (huge loss), I currently keep my savings in a cash ISA (4.10%), and a digital saver (6%). The digital saver has £5k in it, and there's no point adding more, as anything over £5k only attracts a 1.25% interest rate.

I am going to get a lump sum soon, from my Pension, and I'm thinking of placing this into a NS&I savings bond (3.6%).

This will mean that I am not risking any of my capital, but I like the no risk element.

Is this foolish, or do lots of people do this?

I'm definitely in the no risk category! I have decent savings but they have been built up over years.

You can get better interest rates than that though. I just moved mine to an easy access ISA that's 4.4% (incl a one year bonus so will move again in a year)

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Which Bank was that with please? Mine's with Barclay's and I can make 3 withdrawals without penalty.

I only use run of the mill savings accounts. I'm currently getting between 4 and 5.2% across a few different savings accounts.
Things to consider are how much interest can you accrue before paying tax on savings and how much you have in each banking institution.
Do you need to take your lump sum out now? If you are only moving it from your pension to a savings account it might be worth keeping it or some of it in the pension.
Martin Lewis recently did a piece on typical luck on ns and I premium bonds which looks at the return a typical customer gets depending on how much you have but many people with typical luck get much less than 3.6%.
i generally look at the money saving expert page for the best rates at the time

I was going to suggest MSE too. My new ISA is with the post office, unlimited withdrawals, but they don't offer that rate anymore.

https://www.moneysavingexpert.com/savings/best-cash-isa/

Me (and DH). Savings all in premium bonds as we don't really need the interest and it's a bit of fun every month.

DH wants to put some of his pension lump sum into stocks and shares but it will be a small amount we can afford to lose.

We are both very anti-risk and probably overpaid by thousands on our mortgage by taking fixed rates but I come from a background of poverty which stays with you in terms of wanting financial security.

I don’t like risky investments

partly because i would be shafted if I lost money and I don’t have the energy to start saving all over again

i am also not too sure I like the whole “ risk everything to help the economy” mentality , as demonstrated by current government thinkings on is as

investmeng for industry or the county shouldn’t be reliant on ordinary individuals taking risks. Because if they lose no one will give a shit about them

Id guess that it's quite normal for loads of people, maybe even the majority, to keep their savings in cash

Theres tons of info on the best savings rates online, you can easily do better that 3.6%

My pension is in a stocks and shares ISA - but I don't put it in individual stocks.
I invest in the indexes and keep a healthy cash sum there as well so I don't need to sell whenever the market is bad. I can actually afford to buy a little when the market drops.

I found this to be the middle ground so my capital grows and is not at too much risk. I also cannot afford to lose it - time is not my side to start from scratch again.

I’ve been moving a pension lump sum
and an inheritance in to isas for the last few years (and moving them about ) and the surplus is in a Barclays high interest saver

I have a mix, safe NS and I bonds, premium bonds and an ISA but also dabble with a shares T212 isa...a lot of safe stocks but i also buy some new ones which are volatile I have a very small amount in usa stocks, S ans P 500, its down 17% , but that is a long term thing so not worried about current dips. my premium bonds holding is 50k and returns appx 4%.

Me.
I didn't grow up with money and I can't bring myself to take risks with what I do have for my kids.
I have savings accounts, bonds, isa and premium bonds. The interest rates are only going down at the moment, so I'm more tempted by additional premium bonds. Especially as child savings rates seem even lower, and I don't really want my kids to be able to access large amounts of money at 18.

Me. I don’t know enough about financial stuff to take risks.

We used to have stocks and shares ISAs and they performed overall really well but we had a fantastic IFA until 6 years years ago when be retired.

He sold his business to another IFA who we didn't like at all as we quickly realised he wasn't interested in us. His commissions were way higher than our previous IFA charged but the agreement to obtain the business was that he only charged the same to the clients he acquired via our previous IFA. Our investments started to lose money and this new IFA wasn't even aware.☹️

He then tried to offload us to some big company which we flatly refused to be part of so we transferred all the investments into various cash ISAs and really haven't looked back as we earn a very healthy amount of interest every month and as DH is early 70's and I am late 60's we honestly don't feel we have the time to wait for stocks and shares to recover fully should they plummet.

You transferred out of a pension into an ISA? Or just never bothered with an actual pension and just saved into ISAs?
Anything you need within the next 5 years, maybe cash is the best option. For anything longer term you will likely be better off investing in a well diversified portfolio.

You transferred out of a pension into an ISA? Or just never bothered with an actual pension and just saved into ISAs?

Some pensions come with a lump sum (one of mine does).

I don't take any risk. I'm getting between 4 and 5 percent on my savings and I'm happy to keep saving for a house on my own.

I'm 43 now and lost a lot of money through divorce. But if my savings keep slowly rising for the next 3 years I should be able to buy a small house just for myself.

Thanks for all the replies. This has been brilliant to read, because I felt like I was maybe being silly only keeping money in "safe" accounts. I had a lot of shares in one bank that I worked for, and they plummeted and I lost about £40k. It's made me VERY risk averse. I only have an ISA now, and bog standard accounts with no risk to the capital.

Me, I’ve got around 3 months salary in a cash ISA. It’s not much and there’s a possibility I might need to use it in the near future depending on my work situation, so it doesn’t seem sensible to invest at this stage.

There's nothing wrong with keeping a lump sum in cash savings. Many people do. The downside is that over time the effects of inflation will erode its spending power.

You could consider putting some of it into a money market fund. It's a relatively safe investment into short-term, high-quality securities like government bonds, aiming to offer a slightly higher yield than cash savings, with easy access. Essentially, it's a place to park your savings while potentially earning a bit more than a savings account. Current rates are about 5.1%

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I take it there's a chance you could lose capital with this?

Yes, it's possible. They are not risk-free, and they do not have the FSCS protection given to savings.

They are very low risk because they are invested in a mixture of high quality Government and Corporate bonds of short term duration, certificates of deposit, and cash.

I believe the only fund to lose capital in a Money Market fund in the past 25 years was The Reserve Primary Fund in the US, which held 1.5% of its holdings in Lehman Brothers in the 2008 financial crash. Although only a small percentage of the fund's holdings were affected, it caused a run on the fund with investors all trying to withdraw their money at once.
Investors did receive the full value of their capital, as the Federal Government stepped in to guarantee the value of the investments.

I can't bear risk. I know how much money I need to save and I can do that. I would feel such anxiety about the ups and downs of the market that it wouldn't be worth it to me.

It's a very good thing to know your own risk tolerance.

Do you have a pension? Most DB pensions are invested in the market... The longer time frame lowers the risk.

@RichcatPoorcat . You don't need to take them risks. Flagstone and RAISIN offer higher rates than inflation.
But also cutting back on takeout coffee or takeaway food more than covers any inflation rises throughout a year

I'm very risk averse. I prefer lower guaranteed returns over riskier but higher returns. Perhaps we'll take more risks once we've reached our immediate financial goals over the next 3 years.