From: NC 
Newsgroups: uk.finance
Subject: =?iso-8859-1?q?Re:_Personal_position_for_managing_=A325k_-_advice_please_=3F?=
Date: 23 Apr 2007 01:52:13 -0700
   posting-account=W7_YEw0AAACgbe1smC1bUCp6w2l-yd7J

On 23 Apr, 09:50, NC  wrote:
> My wife and I will soon (2-3 weeks) receive a gift of =A325k from her
> parents. I am 28, she is 29, we are both basic rate tax payers,
> although I am hopefully heading into the top band in 6-12 months time.
>
> We have a credit card debt of =A34.5k @ 3.9% until 2011, and no other
> debts (apart from mortgage, which is fixed at 4.84% for another 4 1/2
> years - changed the deal just in time for the rate rises!).
>
> My wife needs a car, so we are putting aside ~=A36k for that. We have a
> 10month old daughter, she currently gets =A370 a month into her
> Stakeholder CTF with the Childrens Mutual (ie Insight Growth Fund).
> =A350 from us, and =A320 fro her grandparents.
>
> =A325k minus the =A36k for the car leave =A319k to 'play with'. I will
> likely keep =A32k in an instant access savings account (we have one with
> Cahoot, who also provide our current account. Rates are quite high,
> and transfers in and out are instant - that can be VERY useful!)
>
> We dont want to invest more for our daughter at this stage - =A3~25k
> from her CTF when she is 18 seems plenty, and we need to consider
> having enough spare to invest the same for a second child. Although if
> I get the promotion I am aiming for this year, I may start a pension
> for her of about =A325 a month (scary thought when she's just 10 months
> old!!).
>
> I currently invest ~=A3100/month into work share schemes (I work for a
> major telco), and we put about =A3100 each a month into our work pension
> schemes.
>
> If I become a higher rate tax payer, all savings outside of ISAs will
> go into my wife's name.
>
> A couple of questions:
> 1. I am looking long term, but is it a 'bad' time to be investing in
> Maxi ISAs / investment funds ? With the rising interest rates, rising
> inflation, questions over the UK economy, potential questions over the
> world economy (ie will the US kick off against Iran ?!) etc, should we
> stick with cash for the next few years and see what happens ? I dont
> want to buy into a fund at the top of the market... and rising
> interest rates are making cash look attractive (although inflation may
> soon erode 'real' interest).
> 2. Should I pay off the credit card ? Doing so will free up about =A3100
> a month, but the low rate tempts me to keep the cash in savings
> instead. We would need about 5% gross to bring in more than we pay out
> in interest on the debt. We could use the lump to pay off the monthly
> payment each month, and so still 'free up' the monthly =A3100.
> 3. Depending on the answer to 1., we will put as much into the various
> flavours of ISAs as we can. We currently have about =A3900 in an Abbey
> ISA that is paying about 5.5%. We will move this if we open a new cash
> mini ISA. Where is the best place to compare ISA rates, with a view to
> which ones are fixed, and which will likely have their rates reduced
> once they have snared their investors ?
> 4. What is the tax situation with fixed term bonds ? Is there such a
> thing as a 1 or 2 year fixed return bond that is paid tax free ? With
> the current trend in the rise in rates, I am nervous about locking
> money into a bond unless I can get the return tax free (rates are
> unlikely to rise by another 20%), or a high rate. We could put some
> money into this in the short term, see what happens to the markets
> over the next couple of years and invest the maturing balance into an
> investment fund if appropriate. If we cannot get a tax free return, I
> could lock =A36k in for the next 12 months and then put the maturing
> balance into a couple of ISAs next FY.
>
> Any thoughts ? Sorry for the long post - trying to answer the basic
> questions before they are asked !

Sorry, forgot to add...
I will be receiving a =A31.5k bonus in June, and a further =A32k in
maturing share options in August.