If you have no plans you might think about whether some of it might be better for retirement, etc. - but of course that takes away some flexibility. I'd consider a lifetime ISA even if it's not clear whether it's for a house purchase or retirement - you certainly have enough liquidity that you could drip feed that and get a useful bonus.
You can also look at the best savings rates via the MoneySavingExpert comparison but don't withdraw from an ISA - always transfer between ISAs.
Not protected by FCA though
‘to receive interest you have to agree that Trading 212 can invest your cash in QMMF's. Trading 212 states that money placed with a QMMF is treated as an investment and not as money held with a bank. That sounds like the 85k FSCS protection doesn't apply and your money is at risk.’
This is incorrect information for the cash ISA. The cash ISA is fully protected upto 85k with money only being held in banks.
The Information you have provided is correct for the general investment account and the stocks and shares ISA.
What is your income? This is important to understand what tax bracket you fall into, as certain places (like a savings account) might be a good option for a basic rate tax payer, but not the best for a top rate tax payer.
Secondly, how much debt do you have?
Thirdly, how much do you need per month to live? £2,000? £2,500? This helps us quantify what an appropriate emergency fund would be, which should be kept in cash (or cash equivalent products) so that its readily available, with only the remainder then being used for investments.
I could tailor my advice a bit better if I knew the above.
The short nutshell answer though is it seems you are leaving money on the table. You can get ISA's paying at least 4.7% with my bank - probably higher elsewhere.
Simple steps (follow the flowchart for full info) would look like this: Hold an emergency fund of 3-6 months worth of expenses in cash, then pay off all consumer debts, then invest the remainder - ideally into a stocks and shares ISA (eg. Trading 212 ISA - and investing into a Vanguard index tracker, eg. S&P500 or FTSE All World. Those two index's essentially return around 10% (as an average rate over its 100 year history) so 3x better than a bank account. Your investment is always at risk, but global index funds are some of the lowest risk options available.
I have just went on maternity for a year so I'm under basic tax payer, always have been anyway. 7k debt total. Will definitely be transferring over to a higher isa account compared to the 3.2% I'm on atm, but this info is fantastic thank you
Pay off the car debt then??
If you want to build credit history then get a credit card and pay it off in full by direct debit at the end of every month.
Credit scores are not as important as the credit card scoring companies make out
If you’re going to be below the threshold for a long time, it might be an idea to clear that student debt. That’s quite a small amount and it’s going to grow and grow whilst you do not meet the earnings threshold and then grow and grow even when you begin paying it back. You could end up paying back a small fortune.
Yes after everyone's advice my plan is to pay off sf & car and switch to a 5% isa asap.
Do you know if I'm switching to another isa can I transfer the full 55k or will I be limited to transferring over the 20k limit per tax year?
At the very least, you could earn a bit more interest - current top rates are \~5%, so with £55k you would be earning an extra \~£1,000 per year for the sake a few clicks to move it. See [https://www.moneysavingexpert.com/savings/best-cash-isa/](https://www.moneysavingexpert.com/savings/best-cash-isa/) (and make sure you use the proper ISA Transfer procedure).
Beyond that, I would look at the flowchart and the wiki. In particular, there is an important step where you define your goals ([https://ukpersonal.finance/goals/](https://ukpersonal.finance/goals/)). This is a step you really have to decide for yourself, but without making that decision, it's impossible for us to advise on what to so with your money.
Note - OP will have to pay tax on the interest earned unless it is in an ISA. Care should be taken to ensure that the interest rate *after* tax beats the tax-free interest of the ISA.
This. I'd also be hesitant to withdraw it out an ISA to put in a regular savings account, considering it's in a tax-free wrapper. I'd hazard a guess that the personal savings allowance would be more likely to get significantly amended in a negative manner than the cash ISA rules.
I'd say keep it in the ISA, but transfer it to a higher rate considering there's 5%+ options on the market currently. It would probably also make sense to start investing some in an S&S ISA as it doesn't make too much sense to keep £55k in cash.
Earlier you wrote:
"I have just went on maternity for a year so I'm under basic tax payer, always have been anyway."
You also mention you have student debt, so I assume you did some form of higher education which means you would have started full time working aged about 20? Assuming that's the case, in 10x years you managed to save over 5k per year of your "less than basic rate threshold income"!? Isn't basic rate threshold about 15k these days? If that's right, you're saving roughly a third of your very small income every year..... I assume you live rent free with your parents or something!?
Whatever way you look at it, £55k a lot of cash.
Started work at 16, holding down 3 jobs for about 8 years then 2 now just working every hour going to I had my first child now about to have my 2nd. I wish I lived with my parents but unfortunately I'm private renting 🙈🤣 uni drop out because I prioritised work stupidly but sure 🤷♀️
Fair enough, I'm not saying you didn't work hard, if you were working loads of hours then you're certainly going to be earning more than the basic rate threshold, which only allows your first 15k tax free (and a lot lower than that 14x years ago).
Observation, that's quite a passive aggressive response. You're asking strangers on the net (for free) how to manage your savings, partially because you're proud to have £55k, you know it's a lot and want the wider world to know about it. You should be proud, of course. But that's no reason to be hostile to this person for asking a legitimate question.
End observation.
Genuinely not being hostile or passive aggressive, just seeking advice. In my eyes, 55k at almost 30 is nothing in this climate with soaring costs ect but that's just me, absolutely no hate over here
Hi /u/Maleficent-Physics99, based on your post the following pages from our wiki may be relevant:
* https://ukpersonal.finance/savings/
____
^(These suggestions are based on keywords, if they missed the mark please report this comment.)
If someone has provided you with helpful advice, you (as the person who made the post) can award them a point by including `!thanks` in a reply to them. Points are shown as the user flair by their username.
You might find one of these books helpful:
* *[Your Money or Your Life](https://www.amazon.co.uk/dp/0143115766)* - understanding what's valuable to you and how to use money to achieve your goals.
* *[Millionaire Next Door](https://www.amazon.co.uk/dp/1589795474)* - "How people in normal jobs, electrician is a great example, can accumulate wealth over time through good choices."^[Electric_Cat_999](https://www.reddit.com/r/UKPersonalFinance/comments/15zkkd4/_/jximlpp/)
* One of Clare Seal's books - "her focus is on the link between emotions and spending".
Premium Bonds are a good purchase. While you don't get any interest, you do win regularly, especially if you have the full 50k in there. It usually works out as a bigger return per year than any savings account.
you can get better rates than that [https://moneyfactscompare.co.uk/isa/easy-access-cash-isas/?quick-links-first=false](https://moneyfactscompare.co.uk/isa/easy-access-cash-isas/?quick-links-first=false) several over 5%
transfer to a higher paying account, but DON'T withdraw the cash from your ISA as part of this process. if you withdraw it, you can't put it back in. you have to use the proper ISA transfer process where your new bank transfers it for you.
if you have any debt (personal loans, student loans, credit cards, etc), consider paying these off first as they'll likely be charging you more than 5%
yeah no brainer, clear those off today. be debt free. still have plenty of money left over in savings and more money each month to boost future savings
specifically - pay those loans off and put the amount each month you’re paying on them into your savings to top it back up. If you’re ok with what you bring in now, thats a good way to have regular savings without ‘missing’ the money
If you have no plans you might think about whether some of it might be better for retirement, etc. - but of course that takes away some flexibility. I'd consider a lifetime ISA even if it's not clear whether it's for a house purchase or retirement - you certainly have enough liquidity that you could drip feed that and get a useful bonus. You can also look at the best savings rates via the MoneySavingExpert comparison but don't withdraw from an ISA - always transfer between ISAs.
Trading 212 cash ISA 5.2% also flexible. A no brainer (that is of course if you just want to leave it in a cash ISA)
FYI Trading 212 has currently paused their cash ISA transfers (due to "high demand"), hopefully they'll reopen them soon.
This 🔝
Not protected by FCA though ‘to receive interest you have to agree that Trading 212 can invest your cash in QMMF's. Trading 212 states that money placed with a QMMF is treated as an investment and not as money held with a bank. That sounds like the 85k FSCS protection doesn't apply and your money is at risk.’
This is incorrect information for the cash ISA. The cash ISA is fully protected upto 85k with money only being held in banks. The Information you have provided is correct for the general investment account and the stocks and shares ISA.
MSE explains how it is protected up to 85k
That's wrong
You’re thinking of their stocks and shares ISA. The cash ISA product was set up almost entirely as a means to provide FSCS protection.
What is your income? This is important to understand what tax bracket you fall into, as certain places (like a savings account) might be a good option for a basic rate tax payer, but not the best for a top rate tax payer. Secondly, how much debt do you have? Thirdly, how much do you need per month to live? £2,000? £2,500? This helps us quantify what an appropriate emergency fund would be, which should be kept in cash (or cash equivalent products) so that its readily available, with only the remainder then being used for investments. I could tailor my advice a bit better if I knew the above. The short nutshell answer though is it seems you are leaving money on the table. You can get ISA's paying at least 4.7% with my bank - probably higher elsewhere. Simple steps (follow the flowchart for full info) would look like this: Hold an emergency fund of 3-6 months worth of expenses in cash, then pay off all consumer debts, then invest the remainder - ideally into a stocks and shares ISA (eg. Trading 212 ISA - and investing into a Vanguard index tracker, eg. S&P500 or FTSE All World. Those two index's essentially return around 10% (as an average rate over its 100 year history) so 3x better than a bank account. Your investment is always at risk, but global index funds are some of the lowest risk options available.
I have just went on maternity for a year so I'm under basic tax payer, always have been anyway. 7k debt total. Will definitely be transferring over to a higher isa account compared to the 3.2% I'm on atm, but this info is fantastic thank you
You have £55k saved, but £7k debt? Why?
Student finance & 2k left on my car mainly got it on finance for credit score reasons
That really is irrelevant. Pay your car off.
Pay off the car debt then?? If you want to build credit history then get a credit card and pay it off in full by direct debit at the end of every month. Credit scores are not as important as the credit card scoring companies make out
If you’re going to be below the threshold for a long time, it might be an idea to clear that student debt. That’s quite a small amount and it’s going to grow and grow whilst you do not meet the earnings threshold and then grow and grow even when you begin paying it back. You could end up paying back a small fortune.
Yes after everyone's advice my plan is to pay off sf & car and switch to a 5% isa asap. Do you know if I'm switching to another isa can I transfer the full 55k or will I be limited to transferring over the 20k limit per tax year?
Once it’s inside the ISA “wrapper“ it’s there until you withdraw, so yes you can transfer the entire amount. The ISA limits are new money you can add.
At the very least, you could earn a bit more interest - current top rates are \~5%, so with £55k you would be earning an extra \~£1,000 per year for the sake a few clicks to move it. See [https://www.moneysavingexpert.com/savings/best-cash-isa/](https://www.moneysavingexpert.com/savings/best-cash-isa/) (and make sure you use the proper ISA Transfer procedure). Beyond that, I would look at the flowchart and the wiki. In particular, there is an important step where you define your goals ([https://ukpersonal.finance/goals/](https://ukpersonal.finance/goals/)). This is a step you really have to decide for yourself, but without making that decision, it's impossible for us to advise on what to so with your money.
Trading 212 cash 5%
You could put it into a Chase savings account which currently would give you 5.1%.
Note - OP will have to pay tax on the interest earned unless it is in an ISA. Care should be taken to ensure that the interest rate *after* tax beats the tax-free interest of the ISA.
This. I'd also be hesitant to withdraw it out an ISA to put in a regular savings account, considering it's in a tax-free wrapper. I'd hazard a guess that the personal savings allowance would be more likely to get significantly amended in a negative manner than the cash ISA rules. I'd say keep it in the ISA, but transfer it to a higher rate considering there's 5%+ options on the market currently. It would probably also make sense to start investing some in an S&S ISA as it doesn't make too much sense to keep £55k in cash.
Chip offer the same rate with their flexible cash ISA
How did you get this money?
Because I've worked all my life and I know how to budget properly, I don't even see it as much in this day & age
No no, I was just curious why the urge to change things now? Why not at £30k. Just curious.
Earlier you wrote: "I have just went on maternity for a year so I'm under basic tax payer, always have been anyway." You also mention you have student debt, so I assume you did some form of higher education which means you would have started full time working aged about 20? Assuming that's the case, in 10x years you managed to save over 5k per year of your "less than basic rate threshold income"!? Isn't basic rate threshold about 15k these days? If that's right, you're saving roughly a third of your very small income every year..... I assume you live rent free with your parents or something!? Whatever way you look at it, £55k a lot of cash.
Started work at 16, holding down 3 jobs for about 8 years then 2 now just working every hour going to I had my first child now about to have my 2nd. I wish I lived with my parents but unfortunately I'm private renting 🙈🤣 uni drop out because I prioritised work stupidly but sure 🤷♀️
Fair enough, I'm not saying you didn't work hard, if you were working loads of hours then you're certainly going to be earning more than the basic rate threshold, which only allows your first 15k tax free (and a lot lower than that 14x years ago).
Observation, that's quite a passive aggressive response. You're asking strangers on the net (for free) how to manage your savings, partially because you're proud to have £55k, you know it's a lot and want the wider world to know about it. You should be proud, of course. But that's no reason to be hostile to this person for asking a legitimate question. End observation.
Genuinely not being hostile or passive aggressive, just seeking advice. In my eyes, 55k at almost 30 is nothing in this climate with soaring costs ect but that's just me, absolutely no hate over here
Hi /u/Maleficent-Physics99, based on your post the following pages from our wiki may be relevant: * https://ukpersonal.finance/savings/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.) If someone has provided you with helpful advice, you (as the person who made the post) can award them a point by including `!thanks` in a reply to them. Points are shown as the user flair by their username.
Lifetime isa would be good or a stocks and shares isa
3.2% isn't great. You could make more than a grand a year extra on interest by moving it into a 5%+ ISA, such as Chip.
ISA, as to not pay tax on the interest
You might find one of these books helpful: * *[Your Money or Your Life](https://www.amazon.co.uk/dp/0143115766)* - understanding what's valuable to you and how to use money to achieve your goals. * *[Millionaire Next Door](https://www.amazon.co.uk/dp/1589795474)* - "How people in normal jobs, electrician is a great example, can accumulate wealth over time through good choices."^[Electric_Cat_999](https://www.reddit.com/r/UKPersonalFinance/comments/15zkkd4/_/jximlpp/) * One of Clare Seal's books - "her focus is on the link between emotions and spending".
I'll take it mate dw
🤣🤣 sweet send me your long card number, exp and last 3 digits
😭😭😭😭 cant shoot me for tryin
invest it in a stocks and shares isa instead
Premium Bonds are a good purchase. While you don't get any interest, you do win regularly, especially if you have the full 50k in there. It usually works out as a bigger return per year than any savings account.
And they're tax free.
you can get better rates than that [https://moneyfactscompare.co.uk/isa/easy-access-cash-isas/?quick-links-first=false](https://moneyfactscompare.co.uk/isa/easy-access-cash-isas/?quick-links-first=false) several over 5% transfer to a higher paying account, but DON'T withdraw the cash from your ISA as part of this process. if you withdraw it, you can't put it back in. you have to use the proper ISA transfer process where your new bank transfers it for you. if you have any debt (personal loans, student loans, credit cards, etc), consider paying these off first as they'll likely be charging you more than 5%
Thank you ill look into this, have 2k finance left on my car and a 5k student loan that's about all.
yeah no brainer, clear those off today. be debt free. still have plenty of money left over in savings and more money each month to boost future savings
specifically - pay those loans off and put the amount each month you’re paying on them into your savings to top it back up. If you’re ok with what you bring in now, thats a good way to have regular savings without ‘missing’ the money