What would you do with 500k?
Discussion
So have the above amount just sat, from various savings etc, currently in an easy access but decent rate savings, spread across a few accounts for protection. But understandably I will have to pay a fair wallop of tax on it, gross is around £1500 a month. Need reasonably easy access as it's to be used to buy a family home once we find something we want. That could end up being next month or it could be 2 years time.
Own business 50k salary currently as that's all I need tbh. Living in a house we originally intended to be a rental, which is what it will become once we move on so has a small mortgage of around 130k but at like 2% so pointless clearing as rental will cover it once we move on.
Own business 50k salary currently as that's all I need tbh. Living in a house we originally intended to be a rental, which is what it will become once we move on so has a small mortgage of around 130k but at like 2% so pointless clearing as rental will cover it once we move on.
coxy0072004 said:
As lovely as that would be it's not feasible at 38.
Barely feasible at 65...!It sounds like you're doing the right thing currently. If you're not both paying higher-rate tax make sure the cash is in joint accounts, etc.
NS and I is less faff because you don't need to worry about protection so much. And 50K of premium bonds would give you a little frisson of excitement each month
Grandad Gaz said:
Pay off the mortgage would be the first thing I would do.
I eventually want to use it to purchase our family home outright. The house we are in right now is planned to be a rental. Pointless paying out a 2% mortgage to then need the funds for the family home and borrow at a higher rate. 4 years fixed left to go at which point I'll probably clear that too as I have a decent directors loan being repaid. 
My alcoholic ex wife got a £350k inheritance just over a year ago and there's only £40k left already.
That money would have changed my life.
I still can't work out what she blew it on but then posh rehabs at £8k a week and a £25k rehab holiday abroad and her and the kids living on Deliveroos, who also deliver booze btw, can eat away at it. Not working doesn't help and a Zip Car permanently parked outside as if owned must be eye-wateringly expensive.
Sorry OP, no help, I just noticed your amount and wanted to vent my spleen.....again.
Anyway, you sound sensible so good luck with it
That money would have changed my life.
I still can't work out what she blew it on but then posh rehabs at £8k a week and a £25k rehab holiday abroad and her and the kids living on Deliveroos, who also deliver booze btw, can eat away at it. Not working doesn't help and a Zip Car permanently parked outside as if owned must be eye-wateringly expensive.
Sorry OP, no help, I just noticed your amount and wanted to vent my spleen.....again.
Anyway, you sound sensible so good luck with it
Serious answer??
You want the cash to buy a house, so needs to be easy-ish access, you just want to minimise the taxable income coming from it…
Maximise premium bonds. Much as you can into ISA, not much more you can do really, is there? (Buy a “depreciation-proof” car with some of it?? - though you then have the risk of losing value, the cost of insurance, storage, potential hassle, etc. etc.).
Although you mentioned you own your own business…
What’s the issue with taking the interest on your 500K as your income and not paying a salary from your business?
You want the cash to buy a house, so needs to be easy-ish access, you just want to minimise the taxable income coming from it…
Maximise premium bonds. Much as you can into ISA, not much more you can do really, is there? (Buy a “depreciation-proof” car with some of it?? - though you then have the risk of losing value, the cost of insurance, storage, potential hassle, etc. etc.).
Although you mentioned you own your own business…
What’s the issue with taking the interest on your 500K as your income and not paying a salary from your business?
Edited by GiantCardboardPlato on Saturday 10th June 13:34
GiantCardboardPlato said:
Serious answer??
You want the cash to buy a house, so needs to be easy-ish access, you just want to minimise the taxable income coming from it…
Maximise premium bonds. Much as you can into ISA, not much more you can do really, is there? (Buy a “depreciation-proof” car with some of it?? - though you then have the risk of losing value, the cost of insurance, storage, potential hassle, etc. etc.).
At least someone read what I wrote! Unsure where all the retirement stuff came from. I just wanted to reduce the tax paid essentially if possible as paying 40% on the interest is a fair chunk! I can only transfer 20k to an isa which I will do anyway. Or anything that may give a better ROI.You want the cash to buy a house, so needs to be easy-ish access, you just want to minimise the taxable income coming from it…
Maximise premium bonds. Much as you can into ISA, not much more you can do really, is there? (Buy a “depreciation-proof” car with some of it?? - though you then have the risk of losing value, the cost of insurance, storage, potential hassle, etc. etc.).
I'm already in the car game anyway, so no need for more toys.
GiantCardboardPlato said:
You want the cash to buy a house, so needs to be easy-ish access, you just want to minimise the taxable income coming from it…
Maximise premium bonds. Much as you can into ISA, not much more you can do really, is there?
If you're prepared to keep rolling them over, are short dated gilts an option?Maximise premium bonds. Much as you can into ISA, not much more you can do really, is there?
Sounds like you're clued up on the options. When I was in a similar position a couple of years ago I did what you're doing
Might it be worth paying for a one off chat with a good IFA in case they have a suggestion you hadn't considered?
Here's a list of best interest accounts, just in case you aren't aware of some of them
https://www.moneysavingexpert.com/savings/savings-...
Might it be worth paying for a one off chat with a good IFA in case they have a suggestion you hadn't considered?
Here's a list of best interest accounts, just in case you aren't aware of some of them
https://www.moneysavingexpert.com/savings/savings-...
From the information available you say you earn 50K but pay 40% tax. Currently UK 20% tax band is £12,571 to £50,270, so if I was you I'd reduce my salary to below £50,270 which will move you into the 20% tax band, this gives you £1,000 of interest free income compared to £500, it also saves you £3,500 of tax on your interest income. Don't know if you had all these savings in April but if you did you could have doubled up on ISA's and shielded £40K. I assume you are married as you say we, so if so, your partner could also put 20K in an ISA which would shield £40K. If your partner's income is low you may be able to take advantage of tax relief if the saving were in their name, for instance, personal allowance = £12,571, also for those earning less than £17,571 up to £5,000 of interest income can be tax free.
https://www.gov.uk/apply-tax-free-interest-on-savi...
https://www.gov.uk/apply-tax-free-interest-on-savi...
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