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What to do with redundancy of £20k+?

ClintEast Avatar
8y, 9m agoPosted 8 years, 9 months ago
Hi all

At some point in the near future i am going to be made redundant after 18 years i should walk away with a nice sum of money lets say £20k+.

I just wanted some opinions on what to do with the money in terms of saving's/ISA/Bond Tracker.

Sadly i still live at home at 36 (If anyone remembers the programm "Timothy" then thats based on me although he was a tad older).

I want to be able to put a deposit on a house so where ever i put some of this money i need to get at it if need be.

My friend suggested a "Bond Tracker" and he says that you get the inflation rate + 1.5%. I dont know if this is true or not and the important is this is Tax Free. However i think he said he is in a 3 year bond tracker and cant take his money out before.

Any suggestions are welcome please as i am a little clueless as what to do with this money once i get it (which is hopefully June this year).

Regards

Clint.
ClintEast Avatar
8y, 9m agoPosted 8 years, 9 months ago
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#1
ISA can only have a max of £3000 cash each year added

maxi ISA also allow for £4000 of stocks and shares to be added
#2
if u'r a risk taker, then convert to $ to make most of the current advanteous exchange rate (eventhough if the u.s goes in recession... chances are rate will fall further), and put money in high interest dollar account (you are looking at 7% interst on $ accounts)

if you want to take even more risk, go ahead, be wild, and convert to yen to make most of the japanese high interest rates (8% is just very common)

otherwise you could always look for a £100,000 worth property, with teh down payment of around 30k, and mortgage of £70k (over 25years), if you manage to put it to rent at around £500-600/month, then you're not paying anything out of your pocket (infact you're making a profit of around £50/month that you'll have to declare :p) => that is what i've done currently, eventhough i'm going to reduce my mortgage when i renegotiate my interest rate.
#3
put it all on premium bonds and hope your luck is in?
#4
buy gold :thumbsup:
#5
hashman
if u'r a risk taker, then convert to $ to make most of the current advanteous exchange rate (eventhough if the u.s goes in recession... chances are rate will fall further), and put money in high interest dollar account (you are looking at 7% interst on $ accounts)

if you want to take even more risk, go ahead, be wild, and convert to yen to make most of the japanese high interest rates (8% is just very common)

otherwise you could always look for a £100,000 worth property, with teh down payment of around 30k, and mortgage of £70k (over 25years), if you manage to put it to rent at around £500-600/month, then you're not paying anything out of your pocket (infact you're making a profit of around £50/month that you'll have to declare :p) => that is what i've done currently, eventhough i'm going to reduce my mortgage when i renegotiate my interest rate.


if you do the house thing wait until the 20/30% house market correction happens, will be within the next 2 years mark my words on this.
#6
Daytrader
if you do the house thing wait until the 20/30% house market correction happens, will be within the next 2 years mark my words on this.


So you think house prices will drop by that much?

To be honest living at home with parents is doing my nut in but the thought of buying property on my own on a clerical salary is scary.

Thanks for the other replies.
banned#7
get 3K into an ISA before the new tax year starts and then put another £3.6K in for the tax year 08/09. best rate is ICESAVE at 6.05% tax free,

Your mates bond is terrible if only 1.5% + inflation. Comes to about 3.5% going on the governments heavily manipulated inflation figure of 2% (yeah, we all know the real rate is around 10%!)
banned#8
Daytrader;1662474
if you do the house thing wait until the 20/30% house market correction happens, will be within the next 2 years mark my words on this.

You really shouldnt give financial advice like this as some people may actually believe your complete guess :roll:

Cant see how prices will fall whilst the amount of immigration remains as high as it is.
#9
bogeyman
buy gold :thumbsup:


I'd go with silver myself has hit the magic $20oz now (which most experts said was unlikley)
I expect it will be $26/27oz by year end.

But to be honest I stick with ISAs and spread your money over high interest savings accounts.
#10
A back of a beermat summary of ISA's:

A Mini Cash ISA can contain
* A Cash pot of up to 3k

A Mini Shares ISA can contain
* A Shares pot of up to 3k

A Mini Insurance ISA can contain
* A insurance pot up to 1k

A Maxi ISA can contain (7k max)
* A Cash pot of up to 3k
* A Insurance pot of up to 1k
* A Shares pot of what ever is left over from the 7k

http://www.hmrc.gov.uk/isa/rule-change-april08.htm

In any one tax year, you can contribute to either (but not both):
* One Maxi ISA
* One Mini share ISA and/or One Mini Cash ISA and/or One Mini Insurance ISA

NB: Contributions are the only thing that matter - ISA's held from previous years are irrelevent, so long as you don't contribute to them.
#11
Cheers for the info.
#12
Sadly i still live at home at 36 (If anyone remembers the programm "Timothy" then thats based on me although he was a tad older).


I believe the programme was called "Sorry" with Ronnie Corbett.

"Language Timothy"

"Sorry mother".
#13
thesaint;1662869
I believe the programme was called "Sorry" with Ronnie Corbett.

"Language Timothy"

"Sorry mother".


As long as it's not like little britain. "bitty!" :whistling:
#14
csiman
You really shouldnt give financial advice like this as some people may actually believe your complete guess :roll:

Cant see how prices will fall whilst the amount of immigration remains as high as it is.


imigrants cant afford £200,000 houses they usually come here just for benefits anyway, and most of the financial advisors and big banks/building societys all agree house are over priced by 20 to 30%, i honestly think there is going to be a correction, or there should be.

oh and they would be fools just to take my advice anyway without financial advisor help, but house's are overpriced by that amount.
#15
Daytrader
imigrants cant afford £200,000 houses they usually come here just for benefits anyway,



You sound quite knowledgeable, which benefits do they get?
#16
Just invest it and stay at home. Treat your parents home to a few treats; plasma Tv etc.
#17
well you hear it on the news and read it in papers all the time, like family with kids getting £30,000 a year etc please dont get me on the subject it really gets my goat ;)
#18
Daytrader
well you hear it on the news and read it in papers



/palmface
#19
Daytrader;1662993
well you hear it on the news and read it in papers all the time, like family with kids getting £30,000 a year etc please dont get me on the subject it really gets my goat ;)


I guess it depends what rag you buy :whistling:
banned#20
Daytrader;1662947
imigrants cant afford £200,000 houses they usually come here just for benefits anyway, and most of the financial advisors and big banks/building societys all agree house are over priced by 20 to 30%, i honestly think there is going to be a correction, or there should be.

oh and they would be fools just to take my advice anyway without financial advisor help, but house's are overpriced by that amount.

nationwide & halifax both have issued statements that they expect house prices to remain stable in the short to medium term.

Also, I didnt say immigrants would be buying houses did I?

They do need places to stay though hence rental prices going up further hence people not selling and even buying to let increasing further.

This 20/30% reduction you seem so sure about has been mentioned on and off for the last 5 years. Meanwhile prices have risen 50% in that same period. I would never view a house mainly as an investment, it should be viewed as your home.
#21
so have you decided what to do with the money yet.
#22
Well i dont have it yet (I will get it in June). Probably put x amount in ISA's and the rest not sure about maybe a high interest saving account.

Regarding purchasing a home i need to find work first and then i think i will wait and see how the housing market goes (Although it will probably be a flat/apartment that i buy) over the next year or two. Save as much as i can.

Fortunately the goverment in my area do this scheme for first time buyers where you can purchase property at a reduced rate say 80% of its market value mostly in regenerated area's. The only snag with that is when you come to sell it you have to sell it at 80% off its value but personally i dont plan to change homes like people change car's.

Thanks for the input btw from all.

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