Savings and Investments?

I was in a similar situation recently and, after research and discussions with an IFA, I bought a rental property.

The Royal Mail

quote:

Originally posted by Steve G:
I was in a similar situation recently and, after research and discussions with an IFA, I bought a rental property.

That wouldn't be radio rental now would it ?

quote:

Originally posted by Steve G:
I was in a similar situation recently and, after research and discussions with an IFA, I bought a rental property.

Not that much.. I bloody wish

30k per family member into the Premium Bonds?

Paul

I would put some/all of it in a cash ISA. The tax free allowance is £3k per annum(so if you have a partner that takes you up to £6k per annum you're allowed to invest).

There are a number of providers, I think the Guardian on a Saturday has a list of who is offering the best interest rates. Some are internet only and others postal/phone. You will need to check that you can have instant access (ie you ring them up and they send you a cheque the next day). The ones with access restrictions generally offer a slightly higher rate but the difference is marginal. Marks and Spencer has a no notice instant access one.

Otherwise if you have more than the £3-£6k you could go for something like ING who have a 5% interest paying account (they are ramming their adverts down everyone's throat like there's no tomorrow) but you will have to pay tax on your interest which will reduce it to 4% or thereabouts.

You could also go for Premium Bonds. If you do the sums on probability then on balance you are not likely to make as much of a return than if you put it in a decent interest bearing account. However there is always the chance you might do better than expected out of it which might appeal to you.

Otherwise if you have lots of cash that you can't afford to risk, buy government bonds. Safe as houses (more safe, in fact).

Howard

just re-read your posting. Government bonds won't work. I think they are for long term investments that you have said you don't want. I think premium bonds (not the same thing) have a 30 day notice period so they might still be in the running for you.

And no interest

quote:

Originally posted by Paul Hutchings:

quote:

Originally posted by Steve G:
I was in a similar situation recently and, after research and discussions with an IFA, I bought a rental property.

Not that much.. I bloody wish

You don't need the full value of the property. The banks we spoke to generally needed something like a 20% deposit for a mortgage on a rental property.

Chaps

I would advise against buying a rental property at the moment. Prices are high and will stabilise for a few years, if not drop.

Your profits on the rent are minimal and I am having to spend a fair amount of cash which will reduce my rental profits considerably.

The way to look at rental property is that someone else is paying the mortgage and you will do very nicely when you sell. I think you are best holding back a few years to invest in this particular market.

I bought one of my properties for an absolute gift in 1994 and I may well cash in once it is renovated and invest the cash into a tracker.


Regards

Mick

A number of banks over here offer Guaranteed deposit accounts with links to a range of indeces to define the growth - and the guarantee of your original investment at maturity as a minimum. The terms vary between 3 and 6 years.

Your ready call cash could be in the form of a cash ISA, mentioned earlier, so allowing you to put your money away for a period of time.

Ready access to all your funds does really limit you in terms of returns - hence the benefit of some funds into cash ISAs and the balance into longer term investments.

As mentioned earlier, you could also look into National Savings - whilst you may need to agree to an investment term, you can use the above mentioned cash ISA for ready access funds.

Brad

RBS are touting their wares over here now, I personally wouln't touch any British Bank again with a twenty foot bargepole, because of their sheer greed and mickey mouse operating methods, there again I doubt very much if they'd want to touch me either, innit.

Fritz Von So that's allright then

Fritz

You get tough with them, you tell them any more of this and you will take your overdraft somewhere else.

Regards

Mick

Most amusing Our Mick, and if I did happen to have an overdraught still, surely the bank would be making more from me than at present, or am I wrong my old chum ?


Fritz Von It's me trackin innit

Ere Fritz, stop taking my initals in vain - refer to them as "the Scottish Bank".

Brad

Paul

depending on your tax position, I'd pay off your mortgage if you have one.

when we got into the same position both my wife and I were both paying 40% tax so the return on any savings was only 60% of bugger all.

We got one of those interest offset mortgage accounts so any cash balance (i.e. savings) basically reduces the mortgage instantly. So its the same as if you receive the same rate on your savings as you are paying on your mortgage and there's no tax on it. So say your current mortage is 5.5% and you're paying 40% tax - you'd have to be getting 9.2% on your savings to equal this.

Our account with the Woolwich is really flexible - you can use all of the cash balance if you want to go on a spending spree with zero notice.

Finally there's something very comforting about making a big reduction to the mortgage - roof over your head even if you lose your job kind of thing.

Hope this helps
Phil