Investment advice - £30K

[Robw73]

I am due to receive a lump figure of £30K in the next few weeks.

I will need this money towards my next mortgage, but until that day arrives, any advice to the best, safe investments would be greatly appreciated.

With very minimal research I am thinking:

£20K Premium Bonds
£10K Santander 123 account.

Any thoughts / recommendations welcomed.

Thank you.

[gregf40]

I'd be lending it out on a P2P lender and cashing it in when you need it. Should get 4-6% return.

[GingerMunky]

£30k is a lot of money, but maybe not enough to make it cost effective to get some financial advice.

Hargreaves Lansdown have some model portfolios that would be a great help if investing in shares.

Markets look very edgy right now so maybe get a 1 or 2 year bond, capital protected.

[ikarl]

you can get 3% on upto £20k in a Santander 123 account

[Fishtigua]

996 Turbo.

Will only go up and you can have some fun!

http://www.autotrader.co.uk/classified/advert/2015...

[Ginge R]

When do you need it for your mortgage?

[Robw73]

Ginge R said:

When do you need it for your mortgage?

Tricky question to nail down exactly.
2 - 4 years at a guess.

To resurrect this thread, the funds are due to me in about 3-4 weeks.
I've discovered some high(ish) accounts for smaller amounts, TSB & Nationwide, any other options that I should be reviewing?

[Ginge R]

China looks like it's going to devalue its currency again (two days in a row) and Russia has just released data that'll make your knees tremble. If it's just two years, if it's for something as important as a roof over your head, I'd strongly consider parking it in a decent interest bearing savings account with suitable access.

[HonestIago]

BOS can give you almost 3% on upto £15k (across three separate accounts). Nationwide (£2.5k) and TSB (£2k) give just under 5% though.

[shigs]

gregf40 said:

I'd be lending it out on a P2P lender and cashing it in when you need it. Should get 4-6% return.

This, it has a lot of flexibility and not as risky as it may sound on the surface. Definitely worth looking into.

[gregf40]

shigs said:

gregf40 said:

I'd be lending it out on a P2P lender and cashing it in when you need it. Should get 4-6% return.

This, it has a lot of flexibility and not as risky as it may sound on the surface. Definitely worth looking into.

I think the risk is certainly worth it for increased return.

I've linked to a couple in my profile (which I lend through) which you get a £50 sign up bonus for if you sign up through my 'refer a friend' links - if anyone is interested.

[Ozzie Osmond]

shigs said:

not as risky as it may sound on the surface.

Oh really? How exactly is that risk assessed? Does the P2P arrangement have the backing of a government guarantee? Does the individual lender actually have any knowledge of the real risk at all?

[gregf40]

Ozzie Osmond said:

Oh really? How exactly is that risk assessed? Does the P2P arrangement have the backing of a government guarantee? Does the individual lender actually have any knowledge of the real risk at all?

For something like Zopa they only lend to people with very good credit ratings - you will never lend more than £10 (I believe off the top of my head) to one person so there is significant diversification if you are lending larger sums.

They also have a reserve fund which is used in the case of a borrower defaulting.

I don't care who I lend to and frankly, wouldn't want to know. I just care about the expected default rate across the platform.

[jmsgld]

Santander 123 20k @ 3% was the best I could find.

You can also have a joint account with the same deal, so for a couple it is up to 60k @ 3%.

This was the best I could figure out for no risk and complete access.

[Sharted]

gregf40 said:

For something like Zopa they only lend to people with very good credit ratings - you will never lend more than £10 (I believe off the top of my head) to one person so there is significant diversification if you are lending larger sums.

They also have a reserve fund which is used in the case of a borrower defaulting.

I don't care who I lend to and frankly, wouldn't want to know. I just care about the expected default rate across the platform.

Eh? £10 max loan, sounds like top quality borrowers.

[Timmy40]

gregf40 said:

Ozzie Osmond said:

Oh really? How exactly is that risk assessed? Does the P2P arrangement have the backing of a government guarantee? Does the individual lender actually have any knowledge of the real risk at all?

For something like Zopa they only lend to people with very good credit ratings - you will never lend more than £10 (I believe off the top of my head) to one person so there is significant diversification if you are lending larger sums.

They also have a reserve fund which is used in the case of a borrower defaulting.

I don't care who I lend to and frankly, wouldn't want to know. I just care about the expected default rate across the platform.

Looks very interesting. Thanks for the links. I like the way you can do a long term calculation, for example what if I put £15k in plus £200 a month over 20 years, I end up with £130k at 5% p.a.

OK it's hardly going to buy a super yacht or fund a retirement, but as part of a diversified portfolio that all adds up I can see the attraction alongside other investments, and the sums involved are very small so if things did go pear shaped it would hardly be a disaster.

[gregf40]

Sharted said:

gregf40 said:

For something like Zopa they only lend to people with very good credit ratings - you will never lend more than £10 (I believe off the top of my head) to one person so there is significant diversification if you are lending larger sums.

They also have a reserve fund which is used in the case of a borrower defaulting.

I don't care who I lend to and frankly, wouldn't want to know. I just care about the expected default rate across the platform.

Eh? £10 max loan, sounds like top quality borrowers.

I said 'you' will never lend more than £10 to one person. That £10 forms part of a much larger loan when combined with other lenders.

[Ginge R]

Greg,

Out of interest, if the business is a start up, how is the credit rating always credible (or validated)? And how objectively is the Zopa due diligence scrutiny erred and tested?

Not being a knob, genuine question mate.

gregf40 said:

For something like Zopa they only lend to people with very good credit ratings - you will never lend more than £10 (I believe off the top of my head) to one person so there is significant diversification if you are lending larger sums.

They also have a reserve fund which is used in the case of a borrower defaulting.

I don't care who I lend to and frankly, wouldn't want to know. I just care about the expected default rate across the platform.

[85Carrera]

Fishtigua said:

996 Turbo.

Will only go up and you can have some fun!

http://www.autotrader.co.uk/classified/advert/2015...

Don't do this. Pig ugly 996s will take the biggest hit when the classic car bubble bursts.

[gangzoom]

jmsgld said:

Santander 123 20k @ 3% was the best I could find.

You can also have a joint account with the same deal, so for a couple it is up to 60k @ 3%.

This was the best I could figure out for no risk and complete access.

I've come to the same conclusion - I'm rather risk averse when it comes to savings.

We've opened up two accounts already, and will do a joint one soon. Your can expect to get back around £40/month from each maxed out account including all their 'cash back' offers - but there is an additional 20% tax to pay if your in the 40% tax bracket (Santander take off 20% by default). Still £100/month post-tax interest from x3 Santander accounts isn't bad going given the current financial climate.

Clearly your make lots more if your willing to take the risk - But everyone's risk threshold is different.