Regular saver accounts?

[clockworks]

I've had "regular saver" accounts for the past few years, as these have paid better interest rates that normal instant access savings accounts.

I've currently got 3 of these on the go (Lloyds, Halifax and Santander), as well as 3 current accounts that have been paying either interest or rewards (Lloyds, Santander and Nationwide), and a Halifax current account that used to pay interest, and a Nationwide ISA.

Total in all these is just over £30k, and I have a monthly surplus of around £1200.

One of the regular saver accounts is coming to an end in 2 weeks, and the interest rate is dropping to 0.01% (Halifax).
Normally I would open another regular saver, move the balance into a current account, and trickle it back into the new regular saver - or take the money out and spend it on a car.

Problem is, I've run out of things to buy right now, and I'll be needing a large sum to pay for an extension in a year or so.

I'm not keen on my savings depreciating through inflation, but I don't want to take any risks as I'm only 3 years from state pension age.

I've looked for savings or current accounts that are paying above inflation interest, and there just don't seem to be many out there right now - perhaps not surprising given the state of the economy.

Any ideas?

[greygoose]

Premium bonds, you probably won’t win a million but you can get your money back any time.

[33q]

I do the multiple reg saver thing

Try opening accounts with HSBC, First Direct and M and S.

[OMITN]

I’ve just gone for NS&I I come bonds for the saving we’re doing for a loft conversion. The income is paid back to you monthly (so no compound interest benefit) but my plan is to add back the income amount to the monthly deposit. It’s only 1.15 but that’s as good as I’ve seen for cash with a degree of easy access. Just need to transact in minimums if £500 (I’m saving more than that each month).

[Simpo Two]

clockworks said:

I'm not keen on my savings depreciating through inflation, but I don't want to take any risks as I'm only 3 years from state pension age.

I've looked for savings or current accounts that are paying above inflation interest, and there just don't seem to be many out there right now - perhaps not surprising given the state of the economy.

Any ideas?

Forecast inflation of the UK is 1.8%, so if you put your money into a bank or building society at, say, 1.0 %, you'll have a guaranteed loss of 0.8% a year in real terms. And you're only 3 years from state pension age.

The only place you'll beat inflation (ie not get poorer) is to invest it. Yes there is risk but your pension fund is (probably) invested in the markets too. You can view this one of two ways: (1) Markets are depressed now so will rebound over the next 1-3 years, pile in. (2) choose defensive fund/s. I'd be very surprised if they don't beat 1% interest.

'Total in all these is just over £30k, and I have a monthly surplus of around £1200.'

IMHO you can afford to take a risk. Regular saver accounts, along with all bank/BS deposit accounts, should really be called fk All accounts so as not to be misleading.

Edited by Simpo Two on Saturday 29th August 10:40

[mikeiow]

Simpo Two said:

clockworks said:

I'm not keen on my savings depreciating through inflation, but I don't want to take any risks as I'm only 3 years from state pension age.

I've looked for savings or current accounts that are paying above inflation interest, and there just don't seem to be many out there right now - perhaps not surprising given the state of the economy.

Any ideas?

Forecast inflation of the UK is 1.8%, so if you put your money into a bank or building society at, say, 1.0 %, you'll have a guaranteed loss of 0.8% a year in real terms. And you're only 3 years from state pension age.

The only place you'll beat inflation (ie not get poorer) is to invest it. Yes there is risk but your pension fund is (probably) invested in the markets too. You can view this one of two ways: (1) Markets are depressed now so will rebound over the next 1-3 years, pile in. (2) choose defensive fund/s. I'd be very surprised if they don't beat 1% interest.

'Total in all these is just over £30k, and I have a monthly surplus of around £1200.'

IMHO you can afford to take a risk. Regular saver accounts, along with all bank/BS deposit accounts, should really be called fk All accounts so as not to be misleading.

Sad but true!
Even ones like M&S, which currently offers a rate of 2.75%, isn’t really: the last amount (max £250pcm) is only invested for 1 month of the year, so the average is something like half that....
If you are super nervous, perhaps put half in premium bonds (safe capital), and half into a defensive fund.

[bitchstewie]

Remember that risk isn't all or nothing.

Perhaps look at something like Vanguard LifeStrategy as a start point to get a basic feel for how there's a whole scale of risk between "cash in the bank" and "stocks".

If you want the safety of cash the "reward" is losing money due to inflation.

if you want the reward of making money the risk is that short term things can go up and down but over the long term historically they have gone up.

[Simpo Two]

mikeiow said:

Even ones like M&S, which currently offers a rate of 2.75%, isn’t really: the last amount (max £250pcm) is only invested for 1 month of the year, so the average is something like half that....

I blame Mr Dietz and his modifications...

[clockworks]

My company pensions are defined benefit, so no risk unless they go bust.
I've been drawing them for 10 years now anyway.

I fell out big time with HSBC 15 years ago (moved my accounts), and again when trying to sort out my father's affairs 3 years ago.
No way I'll have anything to do with them again.

I understand that you only get around half the headline rate from regular saver accounts, because of the way they are fed.

I've never had a premium bond, but it's something to consider, as is National Savings.

I wouldn't mind investing in tangible assets, but picking something that's guaranteed to at least break even isn't easy right now. I did OK with a 911 and a couple of Rolexes, not suer even those would be sound right now if things go bad.

Shame I'm not in the position to start the extension now, as that would solve the money problem.

[Simpo Two]

Cars and watches are a stupendously risky investment! It seems you're comfortable with both ends of the investment spectrum but not the massive middle-ground.

Not sure how the HSBC issue is relevant, but everyone seems to have a bank they hate, just as they have a drink they'll never touch again. Mine are Nat West and whisky.

The NS 1.15% appears to be the best no-risk deal. On £30K it will only make you £195 less well off each year in real terms. (-0.65%). Apart from your pension and this £30K cash, is there anything else?

Really, post this on the Intelligent Money thread (ignore the banter) as people there know more than me. You have £1200pcm coming in which is more than enough to iron out any slight dips. Learn about all options

[orangesrule]

I'm in a similar position to the op. My santander reg. Saver is about to mature. I already drip feed £300/month into a vanguard equity 60 isa. So thinking I will put the £200 that was going into santander, into this now but at a staggered position, basically doing two buys a month.

Edited by orangesrule on Saturday 29th August 15:03

[Herr Krupp]

NS&I probably best rate at the moment.

I dripped £400 per month into a Lloyds monthly saver account - earned the princely sum of £65.15.

[clockworks]

Simpo Two said:

Cars and watches are a stupendously risky investment! It seems you're comfortable with both ends of the investment spectrum but not the massive middle-ground.

Not sure how the HSBC issue is relevant, but everyone seems to have a bank they hate, just as they have a drink they'll never touch again. Mine are Nat West and whisky.

The NS 1.15% appears to be the best no-risk deal. On £30K it will only make you £195 less well off each year in real terms. (-0.65%). Apart from your pension and this £30K cash, is there anything else?

Really, post this on the Intelligent Money thread (ignore the banter) as people there know more than me. You have £1200pcm coming in which is more than enough to iron out any slight dips. Learn about all options

No, I wouldn't "invest" in a car or watch purely as an investment, especially not with the economy how it is now.

The 911 (964) was bought because I wanted one. The fact that it almost doubled in value during the 3 years I owned it was pure luck.

I bought my Rolex Sub for the same reason. I bought secondhand just before the market went silly, sold it a few months ago for over 3 times what I paid for it, because I had a gut feeling that prices had peaked, and I hadn't worn it for a few years.
I got a really good deal (20% off list) on a Rolex Hulk. I never wore it, because I didn't really like it. I sold it too early though, so didn't make much.

Is there anything else? Well, I've got a decent collection of watches and clocks and some other collections, maybe £60k of saleable stuff, all bought because I liked it, rather than for investment purposes.
4 bed house that's paid for.

I'm self-employed, and could carry on working as long as I want to, assuming that my health is up to it. I'll keep working until I stop enjoying it.

Financially, I'll be OK, I'll have enough income to see me out.
I just don't like the idea of my "rainy day" money being slowly devalued by inflation. Like I said, I have plans for a big chunk of the cash in a year or so, so I don't want to tie it up for too long, or take risks with it.

[Simpo Two]

Well, there is much to be said for buying something just because you like it - and any gain is a bonus.

Note you'll have another £14,400 arriving every year to do something with as well, in addition to the £30K. Maybe use your horological knowledge and contacts to trade in timepieces rather than just collect them? At least it would make a profit and thus beat inflation.

[75Black]

This might be worth asking NS & I directly, but I've recently been paid a lump sum as part of a family members will (£80k) that I'm planning to put into an NS&I income bond account, before I do so, I have some questions.

Do I need to pay money into the account monthly or can I just leave the money in there and will the monthly interest then be paid to me? What kind of returns would I be expecting? (Apologies, complete noob to this stuff)

[clockworks]

Simpo Two said:

Well, there is much to be said for buying something just because you like it - and any gain is a bonus.

Note you'll have another £14,400 arriving every year to do something with as well, in addition to the £30K. Maybe use your horological knowledge and contacts to trade in timepieces rather than just collect them? At least it would make a profit and thus beat inflation.

I've been buying a clock or two at my local 3-monthly antique auction, sometimes for my own collection, sometimes to sell on a commission basis at a local shop. The market isn't what it used to be, so there's not a lot of profit to be made. It does allow me to improve my own collection at minimum risk though, and every now and again I bag a proper bargain.

My real issue is that every time I get above my self-imposed minimum rainy day fund amount of £25k, I'm tempted to spend it on cars.
Oh, and my rainy day amount is how much I'd need to have in reserve to cover everything if I never worked again. Obviously the amount I need reduces as I get older, and closer to the state pension and a decent uplift in one of my company pensions - for some reason, indexing doesn't kick in until retirement age, then it doubles from what I've been getting for 12 years (projection).

[Simpo Two]

clockworks said:

My real issue is that every time I get above my self-imposed minimum rainy day fund amount of £25k, I'm tempted to spend it on cars.
Oh, and my rainy day amount is how much I'd need to have in reserve to cover everything if I never worked again.

Remarkably similar to my approach - when the business account reached £20K I'd buy a car That strategy no longer works as I can now buy any car I want, several times over. Did I mention investing?

NB Currently watching The Repair Shop with Steve the clockmaker. If that's what you do, what a fascinating job. So much better than sitting in front of a computer talking bks which is what seems to pass for a career these days!

[clockworks]

Simpo Two said:

Remarkably similar to my approach - when the business account reached £20K I'd buy a car That strategy no longer works as I can now buy any car I want, several times over. Did I mention investing?

NB Currently watching The Repair Shop with Steve the clockmaker. If that's what you do, what a fascinating job. So much better than sitting in front of a computer talking bks which is what seems to pass for a career these days!

Yes, repairing clocks is far more interesting than working in IT - I did that for 32 years!

It's a mix of engineering and art, with a fair bit of detective work thrown in. Takes patience too. There's a lot to be said for bringing something old back to life for the owner to enjoy again.

The Repair Shop has been good for my business, as more customers now appreciate the skill and time it takes to do a good job. Some still think it's just a case of dunking the movement in a bucket of paraffin and squirting it with oil though, and question why I have to charge £150 for a job they think takes a couple of hours.

[75Black]

anonymous said:

[redacted]

Thank you, I've gone ahead and opened an account!

[rich888]

If you're going to buy premium bonds then buy them tonight (31st Aug) rather than tomorrow (1st Sept) so they are entered into the monthly draw sooner.

For example, I bought some PB late July and they are going into the the Sept draw which will take place tomorrow, if I had waited to buy till 1st Aug they would be entered into October draw. Appreciate it's only one month longer but for the sake of timing is well worth doing.

Quickest way is to log into NS&I Premium Bonds page and click on 'Buy more', then use your debit card to make the payment, doing it this way ensures there is no delay with the purchase - I know this from experience!