If I don't buy now, what shall I do with the money?

[IWillAlwaysBeinaClubWithYouin1973]

No traffic on the money thread so hoping someone here will have an idea - sold my house in January, I have £185k from the settlement, that's all I have (no other savings). I thought I was going to buy almost immediately (using that as a deposit) so just split it between two standard bank accounts - now it looks like sale might fall through and I need to rent and think again. I work part time, low income (but not on benefits), kids grown up, single, no debt. I didn't invest in anything because as I say I thought I'd be buying this month.

Are there any tax implications, legal reasons, or just common sense reasons why I can't just shove a bit in some premium bonds, leave the rest to hand in a basic savings account (or two) and see how the next 6 months go whilst I start looking for a house again? Am I missing a problem or an opportunity here?

put £50k in premium bonds. no tax or any other implications. you can then take out when you need. you might be missing an opportunity with the rest - someone else hopefully will advise.

Shop around for the best savings accounts you can get, Hargreaves Landsdown is good because you can choose from loads.

I wouldn’t bother investing it’s too risky for the short term.

As above, if you're planning to buy soon, there probably aren't any opportunities that are likely to pay off short term. You might as well put 20k in a cash ISA though if you haven't already used your ISA allowance. You should also check that your two banks are not part of the same financial institution (e.g. Halifax & Bank of Scotland) as then you only get £85k of protection split between them.

Something like a 95 day notice account may be a better option if you are planning to shop around a bit for a property.

yes £20k in an ISA and rest spread - £85k in accounts that you can withdraw quickly ie instant or a short notice account ie 7 days

mix of
50k premium bonds
£20k ISA
balance easy access savings probably get 4-5%

Even at 4% that’s £600 per month intérêt so make sure you’ve got it in savings accounts plus premium bonds.

£50k in Premium Bonds and then put the remaining into an NS&I account until you decide what to do.
No £85k limit with NS&I (gov backed) so all your money is perfectly safe.

There may be tax to pay on the interest from a savings account, ISA and premium bonds are tax free.

But you can only add £20k.

Another option is a money market fund, e.g. Amundi CSH2, which most places (HL, AJB, Fidelity, etc) will have. It tracks the overnight rate (sonia) - currently 4.46% but you will be taxed on the interest. This is generally higher than easy access accounts, and about the same as the best fixed term deposits, without having to fix the term.

well, it will cost you 6 months rent and house prices always increase long term - so if your goal is to buy then maybe try to rent for 3 months if the current sale can't be salvaged?

I don't think I could cope with that @jaundicedoutlook - sounds tricksy!

I meant am I missing something with regards to where to put the money - what did you mean? (I'm not asking should I rent or buy)

My point is - put it whereever you like but unless you do something risky with it there's a good chance you will lose money. I'm not suggesting you stick it in crypto or do anything risky - stick it in savings accounts / premium bonds as a safe option no reason not to but in a way it will cost you e.g. the cost of 6 months rent plus the house prices increase. Why give I don't know what 6 months rent but say its 6k, why give 6k of your money away?

My HSBC saver pays well, 4% I think and you get a bonus if you don’t withdraw. My house deposit of around 50k makes around £150 a month after tax (I have one ISA and 2 savings accounts). I pay 40% tax, or it would be more. It will have made me a few thousand whilst i’m waiting to buy next year.

Yes to this- make sure you keep a note of the non-ISAed accounts even after closure and interest earned as with those kind of deposits you may be liable to pay tax on the interest over your allowance once the tax year ends.

Why wouldn’t you ask a financial adviser or at least, your bank for advice?

Crypto, horse trading and bingo. Lots of ways to part with your money.

I’d never ask your bank. They’ll just recommend you put it in their shit products.

Given she’s not locking it up indefinitely, I wouldn’t spend money on an IFA.

Thank you everyone, some interesting comments here. I had no idea the money should earn so much interest, I was literally clueless - so even if I don't buy for 6 months, putting into something should pay a lot towards rent.

A standard 5% interest rate would make you 4625 over 6 months, there might be income tax to pay on that if you've already used your tax free allowance - premium bonds don't pay interest btw, so assuming you would still be a basic rate tax payer thats 4625 minus 8.5 percent so you will still profit approx 4200, and if you pay 6k? in rent then you're down 1800 pounds, but as you say its still a big help towards the rent.

Lots of great safe advice above. Don't bother with paying for an IFA or getting pushed by a bank into paying for their products. Use MSE to find the best rates for simple saving.

(For entertainment purposes only - Not financial advice - Do your own research) Keep £1K back. Open a Trading 212 investment account. Buy some BATS, BP and ABDN shares. Watch the dividends roll in and learn how to work the stock market. It's far easier than people think.

I've researched this recently as in a similar position.

Remember you should have no more than £85k with any one bank.
https://www.moneysavingexpert.com/savings/safe-savings/

Put £20k in a cash ISA. I've gone with Trading 212 as the rate is 5.07% (including a bonus for first 12 months). There is a good summary of the best options at https://www.moneysavingexpert.com/savings/best-cash-isa/

You will need to split the rest between 2 bank accounts. Personally I am going for a bank account with a 60 day notice period because conveyancing will take longer than that. I went with Kent Reliance although I think the rate has changed slightly since then. Again, good summary of options here
https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/#notice

A few people have mentioned premium bonds. I considered it but I think you'd get better returns from other savings accounts.
https://www.moneysavingexpert.com/savings/premium-bonds/

^ Re the PB. Yes the base prize rate is lower than commercially available but it's tax free so you need to be getting the PB rate + 20% (min?) to make it worthwhile not having PB.

Then there is the unlikely chance (and fun element) that you may be the big life-changing winner, each month.