What to do with £450k currently sitting in a UK bank??

[matt uk]

Morning all,

Someone I know has £450k sitting in a UK bank. They sold their house in the UK 12 months ago and the proceeds are sitting in a High St bank account.

The guy currently lives in Australia and the interest on the £450k is drawn each month and wired out to his ozzie account.

So as you can imagine, he is sweating right now! My advise was to spread it around, but living in Oz he cannot set up any new accounts in the UK. He doesn't want to transfer it out to Oz as the exchange rate is not great and in he is likely to come back to the UK in a couple of years.

So where is the safest place to put it and any idea how he can get it there? Happy for it to be untouchable for 5 years and the interest rate earned is of less concern than the risk of losing his life savings. I suggested Government Bonds or even Premium Bonds. But being at a stage of life where I am more familar with a big mortgage rather than big savings, I'm not really sure on what to advise.

Any thoughts / ideas?

[Big Rod]

Sounds to me, that if he's not bothered too much about the exchange rate, and it's doable then shipping it out to Australia makes the most sense. Or am I missing something?

[steven182]

I have a cardboard box under my bed that could accommodate such quantities of money if he wishes to entrust me with it. PM me

[ChristianZS]

Is it worth just getting on a plane and coming over for a week to sort it out?

[matt uk]

ChristianZS said:

Is it worth just getting on a plane and coming over for a week to sort it out?

This is what he is thinking. It has to be said though that this is not a money-market savvy guy. If he came back to sort, where would you advise he put that sort of amount?

[JulesV]

He could buy a house from me and then let it for a couple of years.

[Marf]

Spandau that cash.

[matt uk]

Big Rod said:

Sounds to me, that if he's not bothered too much about the exchange rate, and it's doable then shipping it out to Australia makes the most sense. Or am I missing something?

Problem is that the exchange rate is not great at the moment and seeing as he'll be back in the UK in two year, transferring the money one way then back the other is expensive due to fees and sees it as risky to play exhange markets with his lifes saving. Whether this view is right or wrong I'm not sure?

[kambites]

He either needs to spread it across a LOT of banks (15 of them?) in order to make sure that it's all underwritten by the government, or put it into something real. What's happening to gold prices at the moment?

[AndyBe]

Why doesn't he just leave it as it is ?

[matt uk]

steven182 said:

I have a cardboard box under my bed that could accommodate such quantities of money if he wishes to entrust me with it. PM me

First solution I offered him was to 'take care of it'

[215cu]

Buy gold.

[sprinter885]

Cynically you could easily tell him to spend it & help spur UK economy on a bit !
Seriously-it rather depends on which bank he's with now but spreading it between conventionally viewed "safe" deposits would make sense right now. The trouble in these times is deciding which definition of "safe" he wants to use ! If he sticks with Bank deposit A/C look at well-capitalised banks with worldwide spread of business and ones that haven't been under pressure lately.

Even Government/National Savings might be viewed by some as risky given the committment they've just made to UK Banks & Local Authorities cock-ups in investing with Landsbanki (Iceland).

Some might say (today) now would be a good time to invest in shares if he's feeling REAL bold ! but still risky.

[Soir]

I think there is a limit on premium bonds, something like £30k per person.

stick it in northern rock!

[agentsmith]

matt uk said:

ChristianZS said:

Is it worth just getting on a plane and coming over for a week to sort it out?

This is what he is thinking. It has to be said though that this is not a money-market savvy guy. If he came back to sort, where would you advise he put that sort of amount?

its quite easy, look at moneysavingexpert.com - pick top paying savings accounts which are not associated with the same 'parent bank' (so as not to break the 50k per bank policy).

Bradford + Bingley pay 6.5%, ICICI 6+%, Halifax 7% websaver, im sure theres plenty of others - if he doesnt need the money for a while bond it whilst you can. ICICI is 7.2% if he does this. If he just wants somewhere safe, then NS+I or Northern Rock (i.e government owned are going to be best).

[Reevesy]

Does he have a building society account? They seem to be safer than banks atm, i transferred my savings into one yesterday and they said that they were benefitting from the current situation. Good interest rates too!

[matt uk]

AndyBe said:

Why doesn't he just leave it as it is ?

Like I say, not a money-savvy guy, watches News channels about banks collapsing, understands that up to £35k of savings are protected, and basically wakes up in a cold sweat that if Nat West fold his lifes savings go with it. Rightly or wrongly.

[stuart-b]

If he has that sort of money, he needs to speak to an independent financial advisor right away. I'm sure there are a few on Pistonheads, but you might want to post it under Business section.

[HRG]

The Post Office... It's underwritten by an Irish bank so the total amount is protected. Sounds good, but for that amount I'd speak to a truly independent financial adviser.

[matt uk]

stuart-b said:

If he has that sort of money, he needs to speak to an independent financial advisor right away. I'm sure there are a few on Pistonheads, but you might want to post it under Business section.

Good call, have done