Savings advice

scottduffy

scottduffy

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Scott
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This is not so much for me as my parents. I have been searching most of the morning online and have actually given up and made an appointment with a financial advisor near so we'll see what they say.

The reason is they have just sold their home so have roughly £100k + sitting about doing nothing much. They were considering renting as they've not found anywhere for sale yet that they like and it got me thinking. How much could they expect to earn from £100k in a savings account or current account? I have no idea about this but was thinking if it's a couple or a few hundred quid monthly they would almost be covering their rental or at least a chunk of it and of course they'd have the benefit of moving quickly to purchase something they liked.

Not sure if they put it in an ISA they would always have access to it.

Does anyone know anything about savings? Any advice would be appreciated.



Regards

Scott
 
Good luck with that one it is dire out there, I think the best at the moment is 10 year fixed bonds.
 
Not sure that would work. I'll wait and see what the guy tells them on Friday. They will want access to it though be it after a few weeks notice or something like that. When I worked for HSBC there were a million options but that was 15 years ago and things have obviously changed a lot.
 
They should be able to clear £100/month. Doubt you can rent anywhere for that.
 
scottduffy said:
Not sure that would work. I'll wait and see what the guy tells them on Friday. They will want access to it though be it after a few weeks notice or something like that. When I worked for HSBC there were a million options but that was 15 years ago and things have obviously changed a lot.
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Things have changed as it is now much cheaper for banks to borrow money direct from the BOE with the insanely low interest rate which means they don't need to pay investers.
 
haha that's shocking. Martin's money savers one of the threads stated for £100k they would clear £3650 a year so closer to £300 a month. Probably best to just up the flat/house search then so it's not being frittered away on rental. Cheers.
 
Mr Bump said:
Things have changed as it is now much cheaper for banks to borrow money direct from the BOE with the insanely low interest rate which means they don't need to pay investers.
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And might get worse next month ;)
 
Not a great deal of return, not good times at the moment.
 
scottduffy said:
haha that's shocking. Martin's money savers one of the threads stated for £100k they would clear £3650 a year so closer to £300 a month. Probably best to just up the flat/house search then so it's not being frittered away on rental. Cheers.
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Yes, I actually looked at one where you can stash more than a couple of thousand pounds. The 3% one is a max of £20K, so you'll need five of those ;) If you don't mind splitting and moving it around you can generate a little more, but as most have a limit of £2K or £5K for interesting rates you'll need an awful lot of accounts.
 
dejongj said:
Same as on money saving market. You'd need five of those for the amount the OP has to store somewhere :(
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Yep but sometimes that is what you have to do.
I think banks know people can't be fussed to shop about just like gas and leccy.
 
Mr Bump said:
I think banks know people can't be fussed to shop about just like gas and leccy.
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Yep they are more than happy to take your money and make more money from it, but they are certainty not happy in compensating us, for the privilege.

As I've said in the past, when I was young and trying to pay off mortgage, the rates were sky high.
Now that mortgage is paid off and there is a "few quid in the bank" the interest rates are, and have been for some years, rock bottom.
Us of a certain age have been hammered at both ends :(
 
Mr Bump said:
Yep but sometimes that is what you have to do.
I think banks know people can't be fussed to shop about just like gas and leccy.
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I know, but for £100K you'd be talking about nearly 50 accounts that you have to open in order to achieve that. Then take away the time required to figure out which banks actually belong to each other so you protection doesn't get devalued, then I'd question, as there even that many unique instituation that you can stash your money with?

BTW I said 50 as the vast majority have like an upper limit of £2K to get the good rates. Now if there were 5 that would allow a £20K deposit and paid the 3% then fair enough that is manageable. But spreading it much thinner is a royal pain in the backside. May as well go spread betting and get better returns :)
 
Interest rates are just unbeliveably bad right now, to the point where it's much worse to have cash than property. We have 4 or 5 different accounts to try to get some sort of return, but getting even 3% is very difficult.
 
Think is though interest rates and cost of living increases are low so if you are getting 3% thats actually kind of growing your money.
 
Have you thought about putting some into Premium Bonds?

It's a lottery but you don't lose your money...
 
dejongj said:
If you don't mind splitting and moving it around you can generate a little more,
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With £100k you need to split it at least once anyway, and be careful not to use a different named flavour of the same parent bank twice.
 
Alastair said:
With £100k you need to split it at least once anyway, and be careful not to use a different named flavour of the same parent bank twice.
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Indeed, as highlighted earlier in this thread. The problem is that in order to get 3% you'd need to near off split it 50 times, as I said before and I paraphrase "good luck with that"
 
Mr Bump said:
Think is though interest rates and cost of living increases are low so if you are getting 3% thats actually kind of growing your money.
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That may be dependant on where you live. If you factor in house prices in the south then CoL is going up faster than that.
 
With £100k a bank isn't the place to be investing, or at least not a savings account.

I would be looking at a FTSE tracker, you can pick the level of risk and then let the overpaid traders do the dealing for you. Of course there is risk though but the low risk ones are pretty safe.

Alternatively, if it's viable in their local area they could buy a flat, property always pays in the long term.

We have £20k in a 123 account and whilst it is better than it doing nothing it is naff all in terms of useful return - might be able to buy half a crate of wine a month.

edit: actually, we did have £20k in a 123 account but it was doing nothing so we bought a car.
 
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Nawty said:
With £100k a bank isn't the place to be investing, or at least not a savings account.

I would be looking at a FTSE tracker, you can pick the level of risk and then let the overpaid traders do the dealing for you. Of course there is risk though but the low risk ones are pretty safe.

Alternatively, if it's viable in their local area they could buy a flat, property always pays in the long term.

We have £20k in a 123 account and whilst it is better than it doing nothing it is naff all in terms of useful return - might be able to buy half a crate of wine a month.

edit: actually, we did have £20k in a 123 account but it was doing nothing so we bought a car.
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I was going to say that a car looses more value, but aren't actually that certain anymore :eek:
 
Comfortably Numb said:
You're allowed to have a 123 account each, & a joint one, so you could get £60k in those.
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Yes, but is it worth the hassle? you'll net about £150 in total per month. Not a bad little bonus each month but not really something to get excited about in terms of investment, in a year your £100k will have become about £102k.

Now really isn't the time to be saving unfortunately but depending on your parents age, sensible things to do would be:

Max out some ISAs and wait for the interest rates to go up (will be waiting a while)
Invest in property, it always goes up long term
Get a managed fund (FTSE tracker is easier/cheaper)
Pay AVCs into the pension fund (this CAN be very beneficial)
Buy shares that normally have 6%+ earnings per share (of course there are risks involved but it can be safe, see FTSE tracker fund)

Something else to note is that savings are only guaranteed up to £75k so if they are going to lump it in a bank account then split it across two different banks.
 
kendo1 said:
Have you thought about putting some into Premium Bonds?

It's a lottery but you don't lose your money...
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We've been putting small amounts of money into PB's for quite a few years now. Even when interest rates were much higher than they are now, we've bettered the rates ordinary savings accounts would have earned us.
OK you could be unlucky & `win` next to nothing, but your money is safe & there is always the chance of a big win every month.
 
I agree that it takes a bit of setting up, but you effectively have a 3% instant access account.

As far as investments are concerned, I'm a fan of peer to peer.
 
dejongj said:
Indeed, as highlighted earlier in this thread. The problem is that in order to get 3% you'd need to near off split it 50 times, as I said before and I paraphrase "good luck with that"
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I was thinking more along the investment protection limit, which is about £75k. Having £100k in the same bank (nevermind account) is too risky.
 
Alastair said:
I was thinking more along the investment protection limit, which is about £75k. Having £100k in the same bank (nevermind account) is too risky.
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Worth pointing out that is £75k per person so they can invest the lot with one bank if they wish, they just need to make sure no more than £75k is in one name.
 
Lend it to their offspring for them to use instead of a mortgage, lower interest for the borrowers and better interest rate than banks for lenders
 
tijuana taxi said:
Lend it to their offspring for them to use instead of a mortgage, lower interest for the borrowers and better interest rate than banks for lenders
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Probably too long term for the situation described.
 
I sympathise with the OP. There is no low risk and short term method of earning any decent sort of return.

We are almost in a similar position with a desire to move. Estate Agents want us to put our house on the market but we would be concerned that it'll sell swiftly as houses in our area tend to. Where we want to move to, there is much fewer houses available and we don't want to be in the position of having to rent especially with quickly rising prices.
 
Tulipone said:
I sympathise with the OP. There is no low risk and short term method of earning any decent sort of return.

We are almost in a similar position with a desire to move. Estate Agents want us to put our house on the market but we would be concerned that it'll sell swiftly as houses in our area tend to. Where we want to move to, there is much fewer houses available and we don't want to be in the position of having to rent especially with quickly rising prices.
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Neighbours of our have exactly that problem. Their is 'sold' in principle, but three months later they still haven't found a house in the area they want to move to, not even rental. Yet prices keep going up. It still is not great out there.
 
Tulipone said:
I sympathise with the OP. There is no low risk and short term method of earning any decent sort of return.

We are almost in a similar position with a desire to move. Estate Agents want us to put our house on the market but we would be concerned that it'll sell swiftly as houses in our area tend to. Where we want to move to, there is much fewer houses available and we don't want to be in the position of having to rent especially with quickly rising prices.
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Hi Buddy,

I was in exactly the same position last year. We had to move to get our son into the same school catchment area as his cousin for childcare reasons and we hadn't seen anything that we liked. We were terrified to put ours on the market just in case it sold quickly and we had nowhere to go. We put it on the market on the Monday and it sold on the Wednesday. Three days it was for sale and then the panic set in. The saving grace for us though was that the buyers didn't have to sell and were renting so they could move whenever suited us. They agreed to give us 2 or 3 months and we found a house that we'd previously looked at but didn't consider as it was out of the budget we set. It dropped in price and we bought it.

Our problems started however when we found out that both sales had to complete on the same day for legal reasons. Up till then we naively thought we could sell ours and move a month or so later if we paid both mortgages. We had loads of work to do to ours including plastering the whole house, new windows, doors, kitchen and bathroom and this took just over a month to complete working flat out. We couldn't rent anything for less than 6 months so we ended up staying in separate houses with my wife and son in her parents and me in mine. It was horrendous. I was leaving my new house at 7pm to put my son to bed, returning till about 11pm then heading to my parents a fair distance away and back for Evan at 7am. We spent a couple of weekends in hotels just to have time together.

I have never been so stressed in my life. So glad it's all done but I wouldn't ever want to move home again. Especially to one needing a makeover.
 
In my experience offspring never pay back loans :(
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They will get it in the end so help them out now when its needed most, that way you get to see the enjoyment it brings, what better way to spend your cash

One of my favourite sayings "ain't no pockets in a shroud" so true!!
 
tijuana taxi said:
Lend it to their offspring for them to use instead of a mortgage, lower interest for the borrowers and better interest rate than banks for lenders
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Seeing as it's possible to get a 2yr fixed rate of 0.99%, what percentage of interest would you expect offspring to pay? You could get 2% from regular savers accounts.
 
tijuana taxi said:
They will get it in the end so help them out now when its needed most, that way you get to see the enjoyment it brings, what better way to spend your cash

One of my favourite sayings "ain't no pockets in a shroud" so true!!
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If you have plenty to splash around that's a great analogy :)
 
tijuana taxi said:
They will get it in the end so help them out now when its needed most, that way you get to see the enjoyment it brings, what better way to spend your cash

One of my favourite sayings "ain't no pockets in a shroud" so true!!
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But his parents will need the money for their new home when they find one.
 
[QUOTES}seeing as it's possible to get a 2yr fixed rate of 0.99%, what percentage of interest would you expect offspring to pay? You could get 2% from regular savers accounts.[/QUOTE]

Guessing that comes with a hefty set up fee, was meant tongue in cheek and probably buy premium bonds myself with returns being so poor.
 
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