Reply to: House Cash question

[Lockhouse]

No, the only conditions that the ISA wrapper add to the rules of the underlying product is that there is a limit of £3,600 contributed per year (and a total of £7,200 into your both your cash and your stocks and shares ISA) and you have to be UK resident to contribute.

I think it is possible that some 5 year bonds may qualify for a cash ISA, but the 5 year term is a rule of the underlying product, not a rule of the ISA wrapper.

It is also possible that you are confusing them with TESSAs (which cash ISAs replaced some years ago).

I thank you sir

[Gonzo]

I thought if you had a cash ISA you had to leave the cash in there for 5 years to shelter it from tax?

No, the only conditions that the ISA wrapper add to the rules of the underlying product is that there is a limit of £3,600 contributed per year (and a total of £7,200 into your both your cash and your stocks and shares ISA) and you have to be UK resident to contribute.

I think it is possible that some 5 year bonds may qualify for a cash ISA, but the 5 year term is a rule of the underlying product, not a rule of the ISA wrapper.

It is also possible that you are confusing them with TESSAs (which cash ISAs replaced some years ago).

[ASB]

At last a serious reply. Amount of equity is towards the upper end of your quoted range. Premium bonds I'd not thought of.

I thought if you had a cash ISA you had to leave the cash in there for 5 years to shelter it from tax?

Is it the Building Socs that market 1 year bonds?

Loads of people will market cash bonds. B'Socs, Insurers etc. But you need to consider the depositors protection scheme and spread it around. Also ensure you don't have related institutions.

If you could be bothered you could open about 50 current accounts paying up to 8% on regular savings and shuffle them all around (since generally the rules are deposit 1k per month and get around 8% on the first 2.5k in it. That would be taking rate tart to the extreme though.

Some of the banks will also offer money market accounts which are generally libor linked in some way. Generally you can only find the rates by ringing 'em. HSBC might be worth a quick call. Problem of course is than the minimums are often > than the 35k protection level.

Managed cash funds do exist as well, but I would imagine fees will likely eat up all of any rate improvement.

[Xenophon]

Strange thing this. I sold my last house last year (at the peak ) and went rented.
Reckon I've "escaped" with 150K savings (tax free) since then, as said house(s) have decreased in value.
Mmmmmmm nice.

Nice work. Add to that the fact that according to your forum name you are hung like a racehorse, it is all good.

[Ivor Bigun]

Or just how much in cold hard cash for us simpletons.

Strange thing this. I sold my last house last year (at the peak ) and went rented.
Reckon I've "escaped" with 150K savings (tax free) since then, as said house(s) have decreased in value.
Mmmmmmm nice.

[Lockhouse]

Lockhouse,

have you also considered simply taking x % of the cash and putting it into a foreign currency bank account at your local bank ?

Strange as it may seem, over a 12 months period you might do very well betting on the pound falling against currencies, the benefit of this is the cash is always liquid and can at any time be converted back to gbp and used for something

Anyone who had bought Euro 12 months ago would now be 20% up.

Milan.

Very good idea. ' Cept things could go the other way as well. Need to do some research first.

[moorfield]

Or donate it all to the Conservatives, and then when they get in, you'll make it all back plus more in the huge tax cuts they will make for us.

They might throw in a big K or a big P too if you're lucky.

[Xenophon]

Dim,

I know you're dying to tell us, how much did you make in capital appreciation and forex on the villa in cyprus ?

Milan.

Or just how much in cold hard cash for us simpletons.

[milanbenes]

Dim,

I know you're dying to tell us, how much did you make in capital appreciation and forex on the villa in cyprus ?

Milan.

[DimPrawn]

shirley it's safe in NRK ?

Milan.

Safe as houses.

[milanbenes]

shirley it's safe in NRK ?

Milan.

[Cyberman]

If we sell our house and move into rented for 12 months; what do we do with the not inconsiderable equity until we buy back into the market next year (or the year after)? We'd need something safe with a good return. Any ideas?

One reason I decided not to sell was that at the moment cash is not safe and shares are also very dodgy. If you have masses of equity you would have to spread it around the banks because it is still possible that one or more could go bust.
You are only covered up to 35K per bank and that is only if one is not a subsidiary of another.

[DimPrawn]

Lockhouse,

have you also considered simply taking x % of the cash and putting it into a foreign currency bank account at your local bank ?

Strange as it may seem, over a 12 months period you might do very well betting on the pound falling against currencies, the benefit of this is the cash is always liquid and can at any time be converted back to gbp and used for something

Anyone who had bought Euro 12 months ago would now be 20% up.

Milan.

Or bought a villa many years ago and sold last month would be very much up.

[milanbenes]

Lockhouse,

have you also considered simply taking x % of the cash and putting it into a foreign currency bank account at your local bank ?

Strange as it may seem, over a 12 months period you might do very well betting on the pound falling against currencies, the benefit of this is the cash is always liquid and can at any time be converted back to gbp and used for something

Anyone who had bought Euro 12 months ago would now be 20% up.

Milan.

[Lockhouse]

Are you talking about 100k or 500k ?

I'm assuming you have used all available cash isa allowance for the years in question. Obviously helps 'cos of the tax.

You could spread it around a few b.socs at 6.5% ish - but taxable of course. You can currently get 1 year bonds around 7%. Consider taking the maximum in premium bonds. With average luck this should pay 3.4% net (it's tax free).

Depending on your view of inflation might be worth considering one of the various index linked nat savings products. Generally pay their index (which one is it these days?) + 1% net. I think there might be a 3 year period though.

At last a serious reply. Amount of equity is towards the upper end of your quoted range. Premium bonds I'd not thought of.

I thought if you had a cash ISA you had to leave the cash in there for 5 years to shelter it from tax?

Is it the Building Socs that market 1 year bonds?