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Best place to hold buffer fund.
Kenny P
Posted: 18 March 2018 10:13:42(UTC)
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Hi All,

I am about to go into drawdown and feel the advice about holding 2 years living expenses to be well founded. However I don't see anyone suggesting where to actually keep the money. What does the forum think? Cash ISA ? Savings account? Under the bed?

Regards,

Ken
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Guest on 19/03/2018(UTC)
Chris Howland
Posted: 19 March 2018 13:20:44(UTC)
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Kenny,

If you need instant access, then see what your bank has to offer for savings accounts. Some offer attractive savings rates for current account holders.

If you can afford to put money away, then NS&I offer a reasonable rate for three years, plus you can get instant access for loss of 90 days interest.

Chris
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Kenny P on 24/03/2018(UTC)
dyfed
Posted: 19 March 2018 13:22:05(UTC)
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PO Instant Access pays 1.3%
AJW
Posted: 19 March 2018 16:01:26(UTC)
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dyfed;58956 wrote:
PO Instant Access pays 1.3%


0.75% according to their website, unless I am reading the wrong part :)
Keith Hilton
Posted: 19 March 2018 16:25:27(UTC)
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Club LLoyds Current Account pays 2% up to £5000 (t&c's apply), plus they have a regular savings account, max £400 per month, paying 3%.

Santander 123 accounts also used to have a good rate of interest for regular saving, but I'm not sure what's currently available.

Might also be worth putting some in Premium Bonds, which have a payout of about 1.5%, although that's obviously not guaranteed.
dyfed
Posted: 19 March 2018 16:57:29(UTC)
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AJW;58966 wrote:
dyfed;58956 wrote:
PO Instant Access pays 1.3%


0.75% according to their website, unless I am reading the wrong part :)


Online saver 1.05%, has gone down since I opened mine but they issue new rates frequently so worth keeping an eye on it!
Frank Wright
Posted: 19 March 2018 17:17:49(UTC)
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I'm assuming that Ken would rather keep his money within the SIPP rather than withdrawing two years' worth and taking that tax hit? What ideas are there for a low risk buffer within an investment account?
JWB
Posted: 19 March 2018 17:44:20(UTC)
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P2P lending (RateSetter, FundingCircle, Zopa, GrowthSt to name a few) is giving a much better return than any savings account, in range 2.5%-7% out there but there is associated risk and your money's not covered by FSCS and there's even ISA wrappers now. Worth looking in to...
Jim S
Posted: 19 March 2018 18:17:24(UTC)
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Frank Wright;58972 wrote:
I'm assuming that Ken would rather keep his money within the SIPP rather than withdrawing two year's worth and taking that tax hit? What ideas are there for a low risk buffer within an investment account?


Hawksmoor Vanbrugh Fund maybe?


Law Man
Posted: 19 March 2018 18:53:41(UTC)
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As Frank indicates, leave the cash in your SIPP. You earn no interest (unless readers know otherwise) but pay no charges. Outside the SIPP you will earn c. 1% p.a. - not a great loss.
Kenny P
Posted: 20 March 2018 06:52:12(UTC)
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Many thanks for all the replies. I have opened an account with Ford Money for my current excess cash. It's not the top rate around but it is still pretty good and it doesn't rely on a 1 year additional bonus. I might keep a 1 year buffer in it a put another year's worth in a fixed rate account.
King Lodos
Posted: 20 March 2018 08:13:46(UTC)
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You could put the other year's allowance in NS&I 1 year Guaranteed Growth Bonds at 1.5%. Then in something like Direct Saver.

What I like about NS&I is the protection .. It's all backed by HM Treasury .. Basically government bonds that act like savings accounts and often offer better rates than government bonds.
5 users thanked King Lodos for this post.
Suuny Blackpool on 20/03/2018(UTC), Guest on 20/03/2018(UTC), Tim D on 20/03/2018(UTC), Bellabeck on 20/03/2018(UTC), Kenny P on 24/03/2018(UTC)
PaulSh
Posted: 20 March 2018 09:59:35(UTC)
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Law Man;58987 wrote:
You earn no interest (unless readers know otherwise) but pay no charges.

That depends on the SIPP provider - I'm sure there used to be at least one out there that levied a charge for keeping cash. HL doesn't charge and pays tiny fractions of a percent interest, depending on your cash balance.

A few smaller SIPP providers will actually let you put cash in a bank deposit account within the SIPP and earn market rates of interest on it, but unless you had a very large amount of cash I suspect that their higher charges for everything else would negate the advantage.

What I would really like is an OEIC that acted as a "feeder fund" for the Assetz Capital Quick Access account. That way you could deposit and withdraw funds easily from within a SIPP, and earn better interest than a bank deposit account. Of course you would be subject to the risk that loan defaults exceeded the capacity of Assetz's provision fund, but not subject to the additional risk of capital loss via widening discounts when compared to something like FCIF.
Bellabeck
Posted: 20 March 2018 16:17:57(UTC)
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NS&I direct saver
Kenny P
Posted: 24 March 2018 10:01:42(UTC)
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What about this bond? http://factsheet-hrbv.com Looks a bit too good to be true, but then I am a newbie to this investing lark....

Kenny
King Lodos
Posted: 24 March 2018 10:32:13(UTC)
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^^
I don't know what that site is, but I wouldn't touch it with a bargepole

Seems to also be up at
factsheet-harbvestspot.com/
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