QE - killing interest rates for prudent savers.

[SpokeyDokey]

What a PITA QE is for us savers.

We have two Virgin Fixed Rate ISA's coming to an end next month worth in the low 6 figures combined and both on a 5 year lock at around 2.55%.

Now that banks etc do not want the public's money the number of ISA's and FRB's on the markets are diminishing in droves by the day and the current best we can find is a 5 year FRB with RCI Bank (who we already have savings with) and they are only paying 1.4% for a 5 year lock. And that'll probably be gone by the time the 2 Virgin ISA's expire.

Most other deals are <1% excluding some 'Sharia' FRB deals that I don't particularly want to invest in.

What a nightmare. Not sure what to do tbh.

Not interested in PB's.

We have around 10% of our total savings invested in funds and thus subject to stock market fluctuations - we are comfortable with this amount ie 10% but would be prepared to increase this if we have to.

We also have a chunk in NS&I Income Bonds (about £40k) at just over 2% and they end in January 2021. So another problem looming soon,

Fortunately most of our savings are in ISA's and FRB's that are locked until 2022-2025 with an average interest rate of 2.21% which we are more than comfortable with in today's market although rates have been the absolute dregs since 2008.

So... wise people of CC. What do we do with the chunk of money that will be floating around needing a home next month.

Any sensible suggestions welcome. NB: our appetite for risk is Moderate (boring old gits we are).

 

[annedonnelly]

I always consult https://www.moneysavingexpert.com/ when I'm looking to move money around. I've also got a couple of bonds with Ecotricity - they issued them to finance wind power schemes - at a reasonable rate. No guarantee of report though but I reckon the green sector should be ok.

 

[IanSmithCSE]

Good evening,

I did try to send this as a Conversation but Conversations with you are blocked. :-)

I run my own pension and have put a lot of my thoughts and experiences of buying and selling shares into a website at

http://www.beginnerssharedealing.co.uk/

You mention that you are quite risk averse, so this may not be a step that you want to take, but it may also fire off some other ideas.

I am not a financial adviser so these are just my thoughts but they may trigger "My that is a stupid idea but if we ....." :-) The site is not a light read and there are no pretty but meaningless pictures but it is the result of me spending my own money.

Kind regards

Ian

 

[Slick]

Speak to a trusted financial advisor as I wouldn't recommend trying it yourself as always, a fool and their money and all that.

I use this mob, who are very good but you have to decide based on your own personal circumstances.

https://www.sjp.co.uk/

 

[IanSmithCSE]

Are the moderators blocked from private messaging (Conversations) to avoid abuse/hassle?

There is a wonderful quote that really stuck in my mind.

“There is a big difference between real mis-selling and compliant advice, where performance has not met the return assumptions."

2005 - Mark Chilton, chief executive of Purely Mortgages

This was in the context of those who had endowment mortgages and were in danger of losing their homes because they couldn't repay their interest only loans.

There is also a look at why many retail investors bought into Woodford Patient Capital Trust and Equity Income Funds, often because they thought that the Hargreaves Lansdown picks were recommendations, especially as independent platforms such as HL then took fees.

 

[vickster]

just spend It, can’t take it with you

 

[IanSmithCSE]

I have a carbon bike with Di2, what else is there?

Especially as I nearly always ride the 8 speed 531 with downtube shifters and toe clips and a wheel set that weighs a tonne and doesn't buckle when I go to the supermarket and hang the weekends drinks rations on the handlebars and wobble home.

ASDA sell a barbecue chicken pizza, I really don't like it without a "glass" of wine, but with a 75cl glass it is wonderful but I have never wanted to know the nutritional content of the combination.

 

[SpokeyDokey]

Good evening,

I did try to send this as a Conversation but Conversations with you are blocked. :-)

I run my own pension and have put a lot of my thoughts and experiences of buying and selling shares into a website at

http://www.beginnerssharedealing.co.uk/

You mention that you are quite risk averse, so this may not be a step that you want to take, but it may also fire off some other ideas.

I am not a financial adviser so these are just my thoughts but they may trigger "My that is a stupid idea but if we ....." :-) The site is not a light read and there are no pretty but meaningless pictures but it is the result of me spending my own money.

Kind regards

Ian

Thanks very much Ian - an interesting site that I will plough my way through.

 

[SpokeyDokey]

Speak to a trusted financial advisor as I wouldn't recommend trying it yourself as always, a fool and their money and all that.

I use this mob, who are very good but you have to decide based on your own personal circumstances.

https://www.sjp.co.uk/

Thanks - added to my list of things to look at on a rainy day (won't take long to get to it up here then).

 

[SkipdiverJohn]

I'd spread the money across a reasonable number of well established equities, but steer well clear of aviation and other travel/tourism related stocks as their cashflow is going to be fecked for at least the rest of 2020, which might not even be survivable for entities with high fixed outgoings and precious few customers. I'd also avoid IPO's and anything on the AIM market. FTSE 350 for me and I'd look at companies that had a decent pre-corona track record and whose business model and customer base still looks viable a year from now.
With low interest rates, holding cash in ISA's is pretty pointless since you'd have to have a hell of a cash pile earning sub 1% in order to breach your £1k tax free personal savings allowance outside an ISA. Makes more sense to put assets in an ISA that you could make large capital gains on and hope to buy stuff that rebounds strongly in share price once doing business becomes profitable again.

 

[MarkF]

just spend It, can’t take it with you

Not looking forward to my October pension updates. MrsF & I were discussing this & money in the bank doing FA, whilst we were sat in Hull marina on Friday, so we are going to spash out a bit, go for it. Good luck to the OP who seems a lot more sensible than me.

 

[vickster]

Not looking forward to my October pension updates. MrsF & I were discussing this & money in the bank doing FA, whilst we were sat in Hull marina on Friday, so we are going to splash out a bit, go for it. Good luck to the OP who seems a lot more sensible than me.

Buying a yacht?

 

[SkipdiverJohn]

Not looking forward to my October pension updates. MrsF & I were discussing this & money in the bank doing FA

I doubt many people with market-dependent investments are going to be celebrating this year. My recently made pension AVC's are currently slightly underwater, but I focus on the fact that making those contributions saved me a chunk of tax. I'm not about to retire imminently, so I can ride it out.
The thing is about paper losses on valuation statements are they are just that - a theoretical amount by which you are less well off. It only becomes a real loss if you actually cash in an asset that's underwater, or start receiving a pension relying on an underperforming asset to generate it's income. If you sit on your hands and do nothing, the values of investments do generally recover and actually grow. Panic selling in an adverse market just crystallizes your loss and makes it real.

 

[Gunk]

Invest your money in some classic 1970’s racing bikes instead, at least it’s an investment you’ll enjoy

 

[SkipdiverJohn]

Invest your money in some classic 1970’s racing bikes instead, at least it’s an investment you’ll enjoy

But maybe not right now in the current market...... Let the coronacyclists go back to their usual transport modes, and wait for the post-furlough economic fallout to strike first.