Reply to: Alternative to savings account?

[DealorNoDeal]

Which is why I like the idea of having a bit of physical gold as insurance against the unthinkable.

The chances of us ending up like this may be extremely remote but...

https://en.wikipedia.org/wiki/Hyperi...eimar_Republic

[jamesbrown]

Nothing is truly 100% safe (even your house ) - it all depends on circumstances. Ultimately, the gov't can do whatever it wants in a crisis that (eventually) has the support of Parliament, but there are some things that it is very unlikely to do. In practice, it is rather unlikely that an FSCS-protected account would receive a haircut (notwithstanding any misunderstanding of the concept of a banking license). Likewise, it's rather unlikely that the Treasury would fail to meet its obligations because Even Worse Things Would Then Ensue.

[Lance]

Which (dodgy) banks are you using? The FSCS underwrites the first £85K (£170K for joint accounts)

And yes, always worth a punt on the PBs just in case of a big win, but the effective interest rate took a hit recently IIRC, and watch out for inflation chipping away at the value of the holding.

awww. bless....

they changed the rules after the financial crisis.
If one bank fails FSCS will protect you. If all the banks might fail BOE reserve the right to haircut the accounts like they did in Cyprus.
The FSCS don't have any money. They aren't in a position to cover any money. They can only do so at the behest of the gov, or BOE.

Whilst it might take a severe financial shock to threaten that money, it's not beyond possible.

Whereas Premium bonds aren't a bank. They are safe. Except from QE/devaluation/inflation.

[HoofHearted]

the best thing about premium bonds is the risk. If you have £50k in a bank it might not be safe. Bonds always will be.

Which (dodgy) banks are you using? The FSCS underwrites the first £85K (£170K for joint accounts)

And yes, always worth a punt on the PBs just in case of a big win, but the effective interest rate took a hit recently IIRC, and watch out for inflation chipping away at the value of the holding.

[Lance]

I like premium bonds. I've had the maximum for years and my luck appears to be "average" based on their estimated "interest rate". (Sadly) I have a spreadsheet which tracks it. Best year was 1.65%, worst year was 1.05%. Certainly fits the "very little risk" bill. Gold...er..not so much.

the best thing about premium bonds is the risk. If you have £50k in a bank it might not be safe. Bonds always will be.

[sludgesurfer]

Yep, that's what we're thinking. At least there's the chance of winning something, which makes it a bit more appealing than just getting 0.5% interest.

Will probably buy a bit of gold too just in case post-covid everything turns to shyte.

I like premium bonds. I've had the maximum for years and my luck appears to be "average" based on their estimated "interest rate". (Sadly) I have a spreadsheet which tracks it. Best year was 1.65%, worst year was 1.05%. Certainly fits the "very little risk" bill. Gold...er..not so much.

[DealorNoDeal]

Because there's no risk to your capital when purchasing gold?

Well, based on that definition, there's quite a few alternatives to a savings account... scootie can run through them for you.

I did say "a bit". Probably no more than 5% of the capital.

[Lance]

Because there's no risk to your capital when purchasing gold?

Well, based on that definition, there's quite a few alternatives to a savings account... scootie can run through them for you.

no VAT or CGT on gold if you get the right coins.

[jamesbrown]

Will probably buy a bit of gold too just in case post-covid everything turns to shyte.

Because there's no risk to your capital when purchasing gold?

Well, based on that definition, there's quite a few alternatives to a savings account... scootie can run through them for you.

[DealorNoDeal]

Premium bonds.

Yep, that's what we're thinking. At least there's the chance of winning something, which makes it a bit more appealing than just getting 0.5% interest.

Will probably buy a bit of gold too just in case post-covid everything turns to shyte.

[LondonManc]

Premium bonds.

[cojak]

And bizarrely, that's exactly what I've done (and for 5 years as well).

I figured out that I will have learned how to get it out by 2026...

[sludgesurfer]

I've researched S&S ISAs and know where and how I'm going to invest my money but this is the bit I still don't understand. You put money into S&S, but how the hell do you get it out?

I've had a ropey S&S ISA for 15 years and it's just about broken even, and if I do anything with it I'll lose even more money.

Stocks and shares just seems like 'jam tomorrow' to me.

Jeez. Very ropey. Before inflation? Over a 15 year period, if you're invested in a collective investment i.e. a fund, or an ETF, or an investment trust, it would have been harder to have lost money than gained. If it's in individual stocks, then that's a different matter.

Stocks and shares are almost by definition, jam tomorrow.

I'm of the firm belief that for most financial advisors, when a client comes to them with an average risk appetite with some money they don't need for at least 5 years, they would be discharging their fiduciary duty best by writing the following on a post-it note then showing them the door...

• Vanguard.co.uk
• lifestrategy funds
• auto invest
• keep your password safe
• look again in 20 years

Of course, there's not much money in this approach for advisors.

I just wish someone had written that to me 20 years ago, or I just wish I'd found Morgan Housel:

https://www.collaborativefund.com/bl...show-on-earth/

Regarding getting your money out - you just sell the underlying holdings through the providers website then either keep as cash within the ISA wrapper should you wish to invest it in something else, or take it out completely (and forgo the tax advantages)

[sludgesurfer]

I've just put a wodge into a Virgin Money Savings Account. As we might need it in the next 12 months I couldn't go for any fixed term deals. The VM one is 0.5% but that goes down to 0.35% towards the end of April. Not likely to get any champagne corks popping but (marginally) better than nowt

Frustrating, but as you say, better than nowt. I have a general rule that if the annual gain in interest is greater than £100, then I'll change. I recently swapped an easy access account from Marcus to Coventry, only for Coventry to drop from 0.96% to 0.55% the next month.

[cojak]

don't sell your loans. Bad idea.
Just let the income drip out.
Similar with any form of non-cash investment though. Stocks and shares still need to be sold. If you need to withdraw the cash at any time, then 1% is very good rate. Better off drawing down equity in your house if you need cash than selling investments.

I've researched S&S ISAs and know where and how I'm going to invest my money but this is the bit I still don't understand. You put money into S&S, but how the hell do you get it out?

I've had a ropey S&S ISA for 15 years and it's just about broken even, and if I do anything with it I'll lose even more money.

Stocks and shares just seems like 'jam tomorrow' to me.