UKC

I have just checked my French savings account and found out that I didn't get any interest on my savings in the last year. Having looked around, it appears that French banks are not the place to save money, so thinking of transferring my savings back to the UK.

I have a fairly decent chunk of money that I hopefully won't need in the next couple of years, but want to retain fairly easy access to it just in case. I will also be adding to it at about 1k/month during this time, so just wondering what sort of interest I could realistically expect in the UK.

I give up on the French banking system as nothing seems to work how I expect it should, so it's definitely time for a change.

In reply to Phil Payne:

Without locking it in I doubt you'll do better in the UK.

I know Santander are among the best at the moment, paying 3% but only on the first £25k if you have more than that.

Anything more than that and you are looking at locking it away for a fair few years (with penalty for early draw down) or you are looking at a riskier stock market spread type investment (funds available through selling off some stocks at a possible loss)

If someone oculd prove me wrong I'd be grateful as my mother is currently sitting on the proceeds of her house sale renting whilst trying to buy and is effectively loosing money with house price growth in this area - when my folks did this in 2005 the interest paid the rent between houses!

In reply to Phil Payne:

The comparison sites are pretty good on straight savings rates, including term deposits.

However, a few other things to consider (with apologies if all very familiar to you):
- The savings guarantee limit (government underwriting of your savings in the event of bank failure) has been reduced, so if you have more than that you may wish to spread amongst more than one account.
- Some of the more attractive rate sare not covered by the guarantee at all - including all peer-to-peer lending (before anyone recommends that particular madness)
- If your savings are currently in Euros, and you will eventually spend the money in Euros, then you would be betting quite significantly on the exchange rate over a period that will include an in-out referendum. I wouldn't like to forecast the impact, but Euros are cheap currently so you will suffer on the way out of them and might suffer again on the way back in.
- Similarly, if the savings are in Euros and you want to spend the money in pounds eventually, timing will be important. As I say, Euros look cheap just now.
- If you have decided that pounds are the way to go, perhaps split between some easy-access and some bond-type (which attracts higher interest)
- If you have debt (other than student loan, which is a whole other deal), then probably (usually) the best return is paying off debt. There are some exceptions: a) if you took a loan/mortgage where the rate is anomalously low (say 2%) AND you can get 3% on savings AFTER tax; and b) where carrying the debt is not an issue and you will want access to the capital in future and might not be able to replace it at an equivalent rate (e.g you pay off a chunk of mortgage at 4% but later want to buy a car and have to borrow £10k back at 8% to do so).

Off course, I'm not giving advice and you need to do your own research, etc.,; just things to consider

In reply to Phil Payne:

HSBC UK 3-year savings wasn't bad last time I looked.

In reply to Phil Payne:

This http://www.theguardian.com/money/2016/jan/02/bye-buy-to-let-tax-changes-alt... is more about longer term investing, but does describe a wider range of possibilities than you might have thought of.

In reply to balmybaldwin:

Cheers for the info. I might spread it across a couple of accounts then in order to take advantage of the higher interest rates on certain current accounts. I'm fairly risk averse, so not sure if stock options are going to work for me. As I understand it, I can't have an ISA because I'm no longer resident in the UK, can anyone confirm this?

I initially moved all my money to France because I live here now so it made sense to me to have all my money here as well. Having got 0% interest this year I'm pretty annoyed at myself for not paying more attention. I only noticed because my kids savings accounts accrued interest so I decided to check my savings. It's probably been like that for a couple of years and I never noticed.

I would pay off soke of my mortgage with it, but once again I can't get my head around French banking and by my calculations, it would actually cost me money by doing this. My French mortgage is fixed for life at 2.7% which I'm quite happy with, but it has some crap early payment clauses that I can't get my head round.

In reply to Phil Payne:

I would agree that rates in France are very low, we get just over 1% on savings there but it was offset by a mortgage rate of 0.56%.

I would echo the comments above, decide what currency you will be spending and make a decision based on that, moving it twice could easily cost you far more in currency fluctuations that you could possibly get in interest. Of course, conversly it could also make you a lot.

In reply to Phil Payne:


Yes, only if resident in UK *for tax purposes* - so if you're assessed for tax here you can use the vehicle.


If you have a "fairly decent chunk" you do indeed need to start paying attention.


If it's genuinely fixed at 2.7% for full term then that's a good rate - 10 year+ fixes here are c3.5%+. However the low rate will be what has mandated the repayment charges - they need to make their margin somewhere. You can get a lifetime tracker at 2%, but base is expected to rise over the next 2 years.


Not my place to stick my oar in, but I have friends who say this and it's a bit daft not to put the effort into understanding major financial commitments, no? Even if it means paying someone expert (and independent) to explain it.

In reply to Andrew Lodge

The Euro is quite strong against the pound at the moment, not at record highs like we saw a few years ago, but still relatively good. I doubt we will ever see those sort of figures again. I can't see the ECB raising interest rates anytime soon, so that could mean that I could make reasonable gains just by switching currencies back to Sterling and hoping that the BoE start raising the interest rate in the UK, as well as taking advantage of higher interest rates offered by some UK banks in the mean time.

In reply to Phil Payne:

I recommend peer-to-peer lending.

I use Zopa (there are others) and currently get between 4.7% and 5% after fees and all money is instantly available at a 1% fee if you need it for an emergency. Smaller sums, eg the interest, can be withdrawn monthly on a planned basis or as and when it gets repaid by borrowers and before it is re-lent.

I was nervous at first and dipped my toe in the water in a small way, but now I'm committed. It feels even better knowing that borrowers pay less and lenders get more and we cut out the blasted w**kers, sorry bankers, in the middle.

It's not for the very nervous but I've been extremely pleased so far - Zopa are readily available on the phone if you need to chat.

If you do sign up, let me know - I can recommend you and we both get an extra £50!

In reply to Babika:

But peer-to-peer lending is not covered by the FSCS, which makes it higher risk than with a mainstream bank.

In reply to wurzelinzummerset:


Obviously! Hence my observation that it's not for the nervous.

In reply to Babika:

Not for me I think. I'm oot.

In reply to Babika:

I don't think you understood what I was getting at or you wouldn't have used the word "obviously". I'm not talking about the risk in lending, which if well diversified isn't great, but in the risk of the intermediary failing, and hence you losing your entire investment -- a situation not without precedent. Even with shares, which are generally held in nominee accounts these days, the intermediary who provides the nominee account will likely be part of the FSCS.

In reply to balmybaldwin:


Does this mean you have to have more than 25k, or that it's only the first 25k - however much you have in savings?

In reply to Timmd:

first 20k - after that zero

In reply to wurzelinzummerset:


Apologies - I worded it poorly. I didn't have time to give a full analysis of P2P lending and I meant that obviously I was well aware of that issue when I invested. But in the context of this thread I thought it was well worth mentioning a very easy, very flexible type of lending which can take small sums, from around £500 and earn around 5% after fees. Of course it's not for everyone, we all have different risk profiles, and anyone considering it would do their own research not rely on UKC advice. But there is something rather appealing about lending to each other and cutting out the (bloated) middle man, so to speak - as well as earning a decent return.