First time investing...advice and ideas?

[esxste]

I'm expecting to have around £25-30k from selling my house.

Depending on how other non-financial opportunities pan out, this money might be used for a deposit on a new home in 12 months, or it can go into longer term investment opportunities.

The question is how should I manage this money in the next 12 months? I currently don't have an ISA, or other major savings or investments beyond my work pension.

I'm not expecting/looking for get rich quick schemes; just some sensible strategies to maximise my money until my future path in life becomes clearer.

Barring bank details and PINs, I'm happy to give more information on request

[trickywoo]

12 months isn't long enough to think about stocks and shares particularly with the volatility knocking around at the moment.

For longer term an ISA based S&S fund or funds is the way to go. I went in just before that mini China led crash but am still up 40%+ overall. Rathbone Global Opportunities.

For 12 months, and if you have a plan for the money, an easy access cash ISA is probably the best option. With the balance in the best interest paying deposit account you can find.

[Jimmy Recard]

I’d probably just go for a savings account for that time period. Boring, but you’ll know what your return would be.

Depending on your tax bracket, you could have £500 or £1000 tax-free interest allowance. You won’t earn mega bucks, but you’ve got full control of it and you’ll get a guaranteed amount of interest.

Money Saving Expert always seems good for finding the best interest rates.

Personally I would put it all into a savings account and then trickle something into a Stocks and Shares ISA. It depends how much you think you’ll need in the short term

[esxste]

Thanks guys, much appreciated.

I'll take a look at some savings accounts

[anonymous-user]

trickywoo said:

12 months isn't long enough to think about stocks and shares particularly with the volatility knocking around at the moment.

For longer term an ISA based S&S fund or funds is the way to go. I went in just before that mini China led crash but am still up 40%+ overall. Rathbone Global Opportunities.

For 12 months, and if you have a plan for the money, an easy access cash ISA is probably the best option. With the balance in the best interest paying deposit account you can find.

why an ISA?

[trickywoo]

Badda said:

hy an ISA?

Might as well fill it up when the allowance is there. You never know, in the future he may have more available to invest than the allowance. No point missing out.

I do appreciate however, it may be possible to get a better return on a deposit account outside of an ISA at the moment and if you aren't likely to be at the allowance limit in the future its less of a concern.

[esxste]

trickywoo said:

Might as well fill it up when the allowance is there. You never know, in the future he may have more available to invest than the allowance. No point missing out.

I do appreciate however, it may be possible to get a better return on a deposit account outside of an ISA at the moment and if you aren't likely to be at the allowance limit in the future its less of a concern.

The plan is to be at the allowance limit in the future

[Bobajobbob]

For that period of time NSI has reasonable rates on easy access account or you could take a punt on premium bonds.

[davepoth]

trickywoo said:

Badda said:

hy an ISA?

Might as well fill it up when the allowance is there. You never know, in the future he may have more available to invest than the allowance. No point missing out.

I do appreciate however, it may be possible to get a better return on a deposit account outside of an ISA at the moment and if you aren't likely to be at the allowance limit in the future its less of a concern.

You get £1,000 interest free at the moment as a standard rate taxpayer outside of an ISA - on a £25,000 deposit you would need to get an interest rate of 4% for it to make a difference. However, if you do continue to add to your savings then it would make sense to use an ISA.

Some kind of savings account rather than shares is probably best - the stock market can do down as well as up and 12 months is probably a bit short term to guarantee even getting your money back.

[esxste]

anonymous said:

[redacted]

yeah since you guys have kindly pointed me towards savings rather than investments; I've done a little research and discovered that by opening a few accounts I could spread the cash around a bit into accounts with tasty 12 month introductory offers on the first £2-5k.


Premum bonds seems like a safe choice too...

[smithyithy]

esxste said:

yeah since you guys have kindly pointed me towards savings rather than investments; I've done a little research and discovered that by opening a few accounts I could spread the cash around a bit into accounts with tasty 12 month introductory offers on the first £2-5k.


Premum bonds seems like a safe choice too...

I have a Lifetime ISA as my main savings (for my first home) but also recently switched from Barclays to Nationwide as my primary bank. Their FlexDirect current account pays "5% AER (4.89% gross p.a.) interest on in-credit balances of up to £2,500 (fixed for the first 12 months)*. You must pay in at least £1,000 per calendar month" - so my wages go into there and it will pay significantly more than Barclays current account did. Also get access to a linked online savings account that pays 5% AER for the first 12 months - max monthly deposit is £250 so I just prop that up at the end of the month.

Not huge figures, but at least the money that I have sitting in accounts will actually earn something rather than nothing (Barclays savings account I used have paid 0.5% - what's even the point); and obviously this is all secondary to the LISA that pays 25% each month as per its design.

I wouldn't feel confident putting the money into something like S&S in the short term when the money is for a house.. Too much of a risk to gamble on short term gains.