£450k sitting in a UK High St bank account

[matt uk]

I've just posted this in P&P for general discussion but thought it worth posting here as well to see if anyone can advise.

Cheers,
Matt



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?

[jamesuk28]

Just stick it in the Post Office or National Savings.

[mmm-five]

If he gives it to me I'll happily set up another 8 accounts in my name for him to transfer the money into - and I'll only take half the interest.

[EL77]

Stick it in Northern Rock, Goverment owned and going nowhere!!

[EL77]

Or give it to me and i'll invest it in a car for the weekend!!!!

can assure the return but i'll keep most of it safeish!!!

[dazren]

I think NR may be closed to new depositors?

[Horse_Apple]

jamesuk28 said:

Just stick it in the Post Office or National Savings.

3 week lag on opening accounts.

The real problem is that he cannot open any more bank accounts here as he does not have a UK residence for proof of ID.

He needs to distribute some of it just to be safe rather than sorry.

Firstly, he should give a flying F about loss on currency transfers compared to loss of the whole amount.

Secondly, he can open Sterling accounts in Aus with someone like MacQuarie.

Thirdly, he needs to know what his protection is in Aus.

[matt uk]

Spoke with hin this morning. You're right and he has made the decision to get it into Oz asap. Exchange rate is quite good. Once there he'll carve it. They have a few government schemes he's told are paying out at 8% so he'll spread it around.

Getting it into the country he lives in seems the best thing to do so he has got control again.

[cannedheat]

Stick it in HSBC or First Direct.... job done.

[spikeyhead]

Split it into two accounts.

Take out a CDS on each bank that the accounts are with,

[spikeyhead]

coyft said:

spikeyhead said:

Split it into two accounts.

Take out a CDS on each bank that the accounts are with,

Who is the underwriter?

One that is well removed from either of the two accounts.

[Fiddlemesticks]

Hang on a moment, the exchange rate is fantastic - $2.60 - 1 GBP. Thats the highest for a fair while, seeing as it was $2.04 - 1GBP about 3 weeks ago.

Also he would get 8% interest here in Oz.

I understand that the security of the Oz banks is probably better than the UK ones.

If it was me i'd ship it over via www.hifx.com sharpish.

[gumball3K]

Personally its not a good idea with that money sitting in a typical bank account doing nothing. FSA have increased joint accounts up to £100k. If banks do go under then you're going to risk a great deal of your savings. Otherwise look for a much safer option by investing in other banks, gold and properties.

[ginettag27]

If they really want to put it into a bank account, check www.moneysavingexpert.com they usually indicate the best rates of interest on savings accounts, etc...

[Jack Blag]

Would now not be a good time to re-invest the money in property to let? He will still generate a regular income and the value of his investment should go up over the next few years.

[Horse_Apple]

Jack Blag said:

Would now not be a good time to re-invest the money in property to let? He will still generate a regular income and the value of his investment should go up over the next few years.

Best time to buy a property for investment is when everyone else is looking to do so, and then sell the moment you see a tramp wearing a pair of shiney Air Jordans or get financial advice off a cabbie.

I think there is more to come off UK property prices, possibly a lot more, and so I feel it is best to wait that market out until the FreeView presenter monkies are soiling themselves again over rising prices.

[rsstman]

i have several flats of varying prices ready for sale, of which on every single one the rents pay more than the mortgage.

surely a no brainer.

[matt uk]

Thanks chaps. He got the money out of the UK months back, did well on the exchange rate and it's sitting in various Government State bond type things at 8-10%.

He's watching the UK housing market with plans to swoop in as a cash buyer. At the moment his best bet looks like mid-2009 as he thinks there's more to come off house prices what with all the doom and gloom. But he's not in a hurry and will play the market as he sees fit. Lucky bugger.

[rsstman]

well feel free to tell him to swoop in as a cash buyer near me as i am sure we could offer a very good deal in London, Maidenhead, Dover or Northamptonshire.

[NoelWatson]

rsstman said:

i have several flats of varying prices ready for sale, of which on every single one the rents pay more than the mortgage.

surely a no brainer.

Really?