Investment/savings advice please!

RichIbizaSport said:
I'd wait until April and open a p2p ISA with ratesetter. Set it up to reinvest monthly at 3.5% ish.

Maybe don't put all your eggs in one basket, in which case I'd put up to £20k in a 123 current account. As for DD, you can setup paypal as one if you haven't already, just buy some 99p tat on ebay and pay via DD.
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Don't do this (P2P ISA), ok for medium term but you will suffer for having to pull your savings back out, as you in effect have to sell the loan to someone else.

Personally I normally recommend to switch ISA and keep it in an ISA for anything medium term or above, but I would just go with the current account route right now.
There is massive competition for current accounts and they don't want savers money so the market is just not functioning right now.
 
Boycey0211 said:
Well since your previous post I've had a look at some houses online. I'm not sold on new builds particularly, found a nice listed place with garage for 170k that potentially I could go and have a look at.

I know what you mean though, chances are its only going to go up, and then I could look at using one of these other ideas for future savings instead.
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Point Macca makes is with house price inflation as it is assuming you can get onto the ladder you really want to.

E.g Say house price inflation is 4%.
That £170k house goes up £6,800 in a year, more in year 2 etc etc
You need to be saving significantly (I would say double that minimum) in order to be better off waiting. Every year you wait the house price goes up, and you will take in reality probably a year longer to be mortgage free.
Once you can get onto the ladder (read pyramid scheme) you really want to.
 
Mercenary Keyboard Warrior said:
Point Macca makes is with house price inflation as it is assuming you can get onto the ladder you really want to.

E.g Say house price inflation is 4%.
That £170k house goes up £6,800 in a year, more in year 2 etc etc
You need to be saving significantly (I would say double that minimum) in order to be better off waiting. Every year you wait the house price goes up, and you will take in reality probably a year longer to be mortgage free.
Once you can get onto the ladder (read pyramid scheme) you really want to.
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Yeah thats the reason i've been having a look. Whereas before I was happy waiting and trying to make my money work for me a bit better, maybe it isnt the wisest choice, whereas buying would be
 
Mercenary Keyboard Warrior said:
Don't do this (P2P ISA), ok for medium term but you will suffer for having to pull your savings back out, as you in effect have to sell the loan to someone else.

Personally I normally recommend to switch ISA and keep it in an ISA for anything medium term or above, but I would just go with the current account route right now.
There is massive competition for current accounts and they don't want savers money so the market is just not functioning right now.
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... Can you explain your first point a little? If your cash is in a P2P ISA it stays in that wrapper for each new (and reinvested) loan you make within that account.

I'm assuming at some point he'll want to pull all the cash out and put into a house deposit, in which case using up his yearly allowance doesn't matter - because he isn't using it for anything else.
 
RichIbizaSport said:
... Can you explain your first point a little? If your cash is in a P2P ISA it stays in that wrapper for each new (and reinvested) loan you make within that account.

I'm assuming at some point he'll want to pull all the cash out and put into a house deposit, in which case using up his yearly allowance doesn't matter - because he isn't using it for anything else.
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I think he means the profit hit you take for taking it early, I've seen around 5-10% of the interest earned bandied around on various sites.

Cheers though everyone, as above its really been the kick up the backside needed here too!

All came about after talking to my mate in the pub last night, hes had a lower 5 digit sum in low risk shares ISA for a few years and hes laughing now. Wish I'd been more careful rather than just stashing it all away in a low interest account.
 
The Santander 123 is a no brainer really, opened one last night online in about 10 minutes, with an acceptance email coming through a few minutes later.As soon as the details arrive in the post I'll stick the full 20k in it and sort out the dd's.
 
Uther said:
The Santander 123 is a no brainer really, opened one last night online in about 10 minutes, with an acceptance email coming through a few minutes later.As soon as the details arrive in the post I'll stick the full 20k in it and sort out the dd's.
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This is such a good account for stashing some cash. We've had a joint one for years and we were so happy with it we opened one up each as well
 
Everyone with over about 9k who requires fairly easy access needs a 123. It's a no brainer, if you can fill it like the OP could it's 40-50 quid a month interest for a 20% taxpayer. Even less the fee it's vastly better than an ISA.
 
I invest in engineering shares and generally make around 30% over a 3 year period give or take a little. A lot of the larger engineering companies are safe as houses and just consistently (Albiet a little slowly) just continually tick upward.
 
Peerzy said:
1) Open a Santander 123 current accounts, put £20k into it.

2) Open a Tesco internet savings account and use this account to create 2x £1 direct debits on the Santander 123 current account.

3) Set up a standing order on pay day to send £500 from our normal current account to the new Santander 123 CA, have a standing order set for the next day to return £150 of it (so that you save your £350 pcm and complete the £500 monthly credit to the account that is required).

The above will generate 3% interest (minus a monthly fee of £5), so roughly £40 after basic tax.

For the remaining £15k either do the above again with a second Santander 123 CA or spread it across a number of the other high interest paying decent current accounts;

Nationwide do 5% up to £2.5k
Lloyds do 4% up to £5k
TSB do 5% up to £2k
Tesco do 3% up to £3k

You can open multiples of each of the above without much issue.

All of the above would be medium returns for no risk. It's easy enough to average 4% or so for £35k by using the above accounts and a few monthly savers (LLoyds, First Direct and HSBC all offer 5%-6% on monthly savers).

You can earn more by investing money into stocks and shares, property etc.... but these all come with risks.
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That is a very helpful post for the OP, this is why I like OCUK
 
I've made £175 on premium bonds in a year on 10k, looks like the 123 account could have made me about 300 over the year.
But I could win a biggish lump sum on the PB's

I guess its guarranted income vs chance
 
Boycey0211 said:
I think he means the profit hit you take for taking it early, I've seen around 5-10% of the interest earned bandied around on various sites.

Cheers though everyone, as above its really been the kick up the backside needed here too!

All came about after talking to my mate in the pub last night, hes had a lower 5 digit sum in low risk shares ISA for a few years and hes laughing now. Wish I'd been more careful rather than just stashing it all away in a low interest account.
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Yes exactly this.
As your investment is loaned to individuals with loan agreements P2P ISA will be great for depositing medium/long term savings. Although I would say technically you have departed from something that can be deemed savings and moved to investments.
When/if you want to cash out of P2P you need to either wait for the loans to be repaid, or sell your loan to other(s) lenders. So you get your cash back. This comes with a loss normally to cover fees etc.
The big risk in this situation comes with interest rats changing.
The loans are normally relatively short term at fixed rates, thats fine but IF (however unlikely) rates did jump the loss for selling a loan on would lever up very quicky. Eg if you were an investor you wouldn't buy a loan paying 3% interest if you could earn 7% elsewhere. In order to get someone to take that loan you would in effect have to take a loss to give them their 7% return so in effect discounting your own loan.

ISAs confuse, ie blur the line between savings and investments.

Savings should be accessible quickly and return is not the primary motivation
Investments are not normally accessible quickly but give a higher return

You should not put your money into a place where reasonably the time to get it back exceeds the urgency you may need it.

There is basically no point currently having notice accounts but in a normal market place you would ideally have
1) Instant access savings for the normal emergency situation eg fix car
2) Longer term savings paying a better rate but on notice to withdraw, eg a 90 day account eg 6 months mortgage payments stashed away should the worst happen
3) Mix of investments satisfying your risk/reward profile

Some people will never have 3, their risk reward profile will mean 2 which is pretty much risk free satisfies their requirements.

ISAs cloud the issue as they make things tax free but they do not change the underlying nature of the investment.
Instance access ISA = risk free (bank guarantee)
Notice ISA = risk free, but penalty for fast access
S&S ISA = some risk, shares can go down instead of up, company could go bust
P2P ISA = still lending over medium term, hard to get access to the funds quickly without penalty, money not lent is sitting earning no interest
 
With 2 people (a married couple) you can use the above methods I've posted to earn interest on tons of money.

It appears easy enough to get 3 S123 CA each (so a total of 6) and then you could go for another 3 joint accounts (total of 9). T&C state 2 each only but I've not had any issues.

So that gives you £180k @ 3%, then using the same method (1 account each and 1 joint, total of 3) for all the other current accounts from Tesco, Nationwide, Lloyds, TSB etc... you can earn a decent return on well over £250k in cash if you wanted to.

Avoid keeping more than £70k in each bank personally though as that's the limit you are covered to. Check banking licenses aren't shared as well (HSBC and First Direct as an example).
 
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