Safest place for house sale cash (6-12 months)

[johnnyBv8]

Appreciate this is a first world problem, but PH is great for answers to these....

We're in the process of selling our home, and will be renting until we find somewhere else to buy. With the equity we'll get out of the house sale plus other existing 'cash' savings (ISAs, easy access etc), we'll have around £850k in cash in the bank. Not sure when we'll get a new home, but realistically it could be 6-12 months.

I know that FSCS gives 18 mths protection up to £1m in this scenario, but I still feel I need to spread the risk. Interest rates are so low that returns between different options are minimal, and I want low risk as a good proportion of this is to help us buy a long term family home.

I'd really appreciate any suggestions on anything that I can do beyond spreading it amongst NS&I (despite ridiculous rate) and other savings accounts. Any other low risk solutions?

Thanks in advance.

[WillB]

https://www.flagstoneim.com/

I used the above for 8 months in a similar position to yourself and recommend them.

As I'm sure you know, the rates are poor at the moment, but flagstone allows you to split easily, if you don't want the hassle of managing many accounts yourself.

[Rojibo]

Depending on what your assets may look like after the house purchase have you considered private banking?

I can recommend Lloyds.

[johnnyBv8]

WillB said:

https://www.flagstoneim.com/

I used the above for 8 months in a similar position to yourself and recommend them.

As I'm sure you know, the rates are poor at the moment, but flagstone allows you to split easily, if you don't want the hassle of managing many accounts yourself.

Thanks for this - just had a look at their page. Looks like you pay £500 (plus annual fee) to avoid the need to set up all the separate accounts - but they're all just savings accounts. Is that right?

[WillB]

johnnyBv8 said:

Thanks for this - just had a look at their page. Looks like you pay £500 (plus annual fee) to avoid the need to set up all the separate accounts - but they're all just savings accounts. Is that right?

Could be, I've not used them for about 8 months and the savings rates were higher back then. From memory, they were charging 0.25% from and a waived annual fee.

[55palfers]

I'd be inclined to both get the maximum Premium Bonds holding. You never know. Very safe too.

[BritPop]

Hargreaves Lansdown Active Savings has a similar setup but no minimum or annual fees.

[Simpo Two]

WillB said:

johnnyBv8 said:

Thanks for this - just had a look at their page. Looks like you pay £500 (plus annual fee) to avoid the need to set up all the separate accounts - but they're all just savings accounts. Is that right?

Could be, I've not used them for about 8 months and the savings rates were higher back then. From memory, they were charging 0.25%...

= £2,125. Which is a big pile of pound coins on your coffee table.

If it was me I'd max out on PBs then put the rest in a defensive fund and hang on.

[johnnyBv8]

Thanks all - I’ll have a look at Hargreaves Lansdown option. I’ve already got 2x premium bond accounts at the limit. I moved savings out of NS&I income bonds last month when the rate dropped, but I guess I may be best to use this again.

I wondered if there were any low risk stocks etc that might be worth considering.

[WillB]

johnnyBv8 said:

I wondered if there were any low risk stocks etc that might be worth considering.

I moved all my cash with Flagstone into stocks, as I decided it was worth the risk with the market having crashed hugely and they have done well over the months since then, but, there is always a risk with shares/funds.

It's generally considered, if you need the same amount of money out in a less that 2 years that stocks 'may' be too big a risk.
But, if it were me, I'd certainly consider it.

Do have a read of the Intelligent Money sticky thread on here. Julian / Nik there are really helpful.
I have some money with them in the PH Recovery and Equity funds and the performance has been very impressive.
Past performance can't be used as a guide for the future (blah blah) but certainly worth taking a look

[NickCQ]

johnnyBv8 said:

I wondered if there were any low risk stocks etc that might be worth considering.

Don't do it. If you need the money again in 6-12 months it's just not worth the risk.

[troika]

NickCQ said:

johnnyBv8 said:

I wondered if there were any low risk stocks etc that might be worth considering.

Don't do it. If you need the money again in 6-12 months it's just not worth the risk.

I would agree. However, if you did fancy a flutter in solid stocks, I feel Unilever and GSK look relatively good value.

[Mr Whippy]

£170,000 FSCS cover with joint accounts at Building Societies.

You’d get 4 joint accounts to cover off £680,000 and then another £170,000 with NS&I and you’re at £850,000.

Bit of a faff swizzling it all around when required... but I’ve found cheques to solicitor is the easiest approach anyhow.

[KTF]

Temporary high balances are covered. No need for multiple accounts: https://www.fscs.org.uk/how-we-work/claims-process...

[johnnyBv8]

KTF said:

Temporary high balances are covered. No need for multiple accounts: https://www.fscs.org.uk/how-we-work/claims-process...

Thanks - I'm aware of this in principle, but can you imagine how long it would take to get the compensation through?! I'd rather spread the failure risk, so that I don't have all eggs in one basket with the potential that house purchase/life is restricted by waiting along with thousands of others for a compensation claim to be honoured.

[BobToc]

If we’re at the point where retail depositors are losing their cash in banks, dealing with a bit of bureaucracy is going to be the least of anyone’s worries.

[chip*]

If a single Bank (whose core business is primarily L&D's!) is too high a risk for you, and you want to sleep at night, just go all in with NSI Direct Saver @ 0.15%.

https://www.nsandi.com/products/direct-saver

[Mr Whippy]

From what I’m aware of, building society tend to have a better asset vs liability position... even just in pure cash terms... though assets are probably more heavily in property (mortgages), than banks.

4 BS joint accounts and rest in NS&I, sorted.

If you’re lucky one town might have 4 BS in it that you can use. A few hours work and you’re done.

[johnnyBv8]

Ok, thanks all. Sounds like the answer is to keep it all ready access savings, avoid stocks (unless maybe putting a small amount in speculatively), and then splitting between BS and NS&I. I'd buy another car if it weren't for the fact that we probably won't have a garage over this period!

[NickCQ]

johnnyBv8 said:

I'd buy another car if it weren't for the fact that we probably won't have a garage over this period!

You should buy one of those 'appreciating classics' we keep hearing about