National Savings - any good? Anything better?

Question

I have £70k to invest. It's in an internet savings account where it's getting 5%, but I'm a higher rate taxpayer so that's 3% after tax, barely keeping pace with inflation.

I don't want to see a financial advisor as I'm worried I'll get sold whatever gives them the most commission or have to pay so much for the advice that it wipes out a couple of years worth of income!

So I thought I'd try asking a bunch of unqualified strangers on the internet. Like asking your mates in the pub, only confidential (for a given value of confidential.) :)

What do you guys think? National Savings have these bonds where you tie your money up for two years but it's guaranteed a return of inflation +1%, tax free. Is this worth doing? Is there anything better?

Should I put it all in one place?

I am investing for the medium/long term (I want to buy a house in 5-10 years time) but I don't want to risk the capital. I want a guaranteed return... but high enough that saving isn't losing me money

Oh, I'm in the UK by the way. :) I always forget to mention that!

Answer 1

Icesave (Internet only savings account) has 5.7%. I can't see you getting better than that unless you're prepared to take at least some risk.
How about 50k in Icesave, and 20k in low / med risk shares ? That would still give you a very low risk overall, and a fair return.
There is a scheme that most banks (including Icesave) are in where you only get the first 32k back if they go bust, so bear that in mind.
Banks rarely go bust though.

Answer 2

You might want to take advantage (if you haven't already) of ISAs as this will ensure that you are making the most tax efficient savings.

National Savings are certainly the most secure place to keep your money. Look at all their products, because I would have thought that there are bound to be some that offer a better return.

I also agree that you should spread your investments. Given the term you are suggesting, then you could try out a more risky investment with a small part of your capital and see what success this generates. This may at least cover any loss to tax from other savings.

You should also consider premium bonds as the more money you invest the better the odds and you always get entered.

Considering the amount you have why not buy a property now? Even if it's a buy to let, your returns can usually be in double digits annually, not to mention the capital growth. Takes a bit more planning and work re: maintenance and so-on but can be done.

Answer 3

I have been consistently getting about 800% returns per annum (on a £1000/- initial investment - as that was the max I was ready to loose). After 1 year, my balance was £7600/- after withdrawing my initial £1000/- at month 8.

This was possible by playing the Forex Market at very low risk on the GBP / Yen Exchange rate only. If you are a very systematic person and can control the risk taking urge, you make money. Once you loose the control, you loose your money. What I do is I just do a One Touch over 180 days which are the lowest the system will allow.

I do not understand how they can afford that. We need to take care that the bet is placed when the daily trend is downwards. It works but only if we do not become gready.

Do register and try them out. They also give you £10/- free (after 15 days when you have done your address validation). So you can play and try with that amount and later inverst only after you are sure. Minimum investment to make a return are about £9.20 pence so you may initially make only 80 pence or so profit every few days if you do not put in any of your own money. I enclose my referal link but I will not earn any referal commision if you follow my strategy as they give a commision only if the payout is greater than 80%.

Well best of luck

http://mercury6.betonmarkets.com/GB/BOMUK/MX8064

Answer 4

Have a look at the National Savings Direct Cash ISA currently offering 5.8% AER variable. It's the highest instant access rate that doesn't include a short term bonus which will disappear after 6/12 months. You could put £3000 into this now and a further £3000 in the new tax year. If married your spouse could also do this and that would be £12,000.

Although you clearly want security, would you consider a guaranteed equity bond? This could give you 50% of any gain in the FTSE100 but you get all your money back if the FTSE drops. How about putting £27,000 into this and £27,000 into a direct access savings account where you could get 0.5% over Bank of England Base Rate (i.e. currently 5.75% gross)?

These are just generic options as it is impossible to give advice without talking to you. However I am a mortgage adviser and would be happy to discuss the above with you if you want to email me...

Answer 5

if you go to an independent financial adviser they will work on a fee basis , an hourly rate of between £100 and £300 per hour so the answer can be yours from a professional who is fully qualified and carries professional indemnity insurance for a very small fee. you should be aware that the Treasury sets the rates for national savings and has priced in the tax advantage when coming up with the rates.national savings is low risk , but their are low risk products which could give the potential for greater returns, but you have to decide between low risk and zero risk.As a higher rate tax payer on over £38k pa go and take professional advice,would you take free advice on Brain surgery or buy the cheapest parachute ?

Answer 6

National Savings Capital Bonds are the best deal as they have 5% tax free interest and unlike ISAs or similar you can buy as many bonds as you like.
Premium Bonds are worth getting if you think you are a very lucky person, otherwise go for Capital Bonds.

Answer 7

Insurance company's are the illness, you will never reform medical care without eliminating the insurance company's profit from the mix. National health care is not as big of a burden as you make it out to be. Canadians pay for theirs through a national sales tax. I feel the insurance company's are organized crime and the health care industry is in crisis because of them. 45 million Americans have no access to affordable health care. You are right about 1 thing though, it is not fair for the medical profession to charge two different fee's depending on whether you have insurance. This must be stopped.

Answer 8

Barclays premier customers get good advice on all that sort of thing. They have guaranteed returns on some investments with tie in times too. Premium bonds for £30k can give a good return too - but not gauranteed!

Answer 9

national savings good

Answer 10

The first answer has it you want safe "guaranateed" investments. Online savings banks are your only hope. Everything else has risk tied to it.