How to manage large sums of money

If you’ve £100,000s to look after

If you have more than £85,000 and want to keep it in cash savings, this short guide runs through some top tips to keep it safe, maximise your returns and manage it easily – including how to find professional financial advice.  

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What's considered a lump sum of money?

Any amount of cash could be considered a large or lump sum, but for the purposes of this guide we're talking about more than £85,000.

That's because the main protection you have for your savings – the Financial Services Compensation Scheme (FSCS) – protects the first £85,000 you have saved, per UK-regulated financial institution (not per account). So if you have more than this, it's important you take steps to ensure your money is adequately protected. 

You can find out more about how the FSCS works and keeping your savings safe, or read on for suggestions on managing large sums. 

Consider professional advice

When it comes to complex financial products, managing serious sums of cash or making a big financial decision, a financial adviser could be worth their weight in gold.

We've a summary and quick links to where you can find a financial adviser if you're already clued up on the basics. Alternatively, read our full guide on financial advisers for detailed help. 

1. Always opt for an independent financial adviser. They're able to advise and sell products from any provider right across the market, meaning you should get the very best advice and products tailored just for you. See the full explanation to make sure you're getting the right advice. 

2. Make sure you know what the charges are. An initial fact-finding chat with an adviser should be free. After this you'll either be charged a percentage-based, fixed or hourly fee. For a full fees explanation see below. 

3. Finding the right financial adviser for you. Here are two sites that can help you find the right financial adviser for you – with both you simply enter your postcode and it will list your local advisers: 

  • Unbiased – A network of 27,000 independent and restricted advisers. 
  • VouchedFor – A smaller network of over 5,500 advisers to chose from.

Tips for managing lump sums

If you'd rather go it alone, here are some pointers to help you in the right direction. We'll run through three key considerations when it comes to savings – maximising the interest you get, keeping it safe and the level of effort you want to put in. 

Note, this guide focuses solely on savings accounts, where there is no risk of losing your cash (unless the bank were to fold – more on that below).

There are of course many other options for large sums of money with greater risk involved, such as investing on the stock market or buying property, though these are not our areas of expertise and we'd hate for you to lose money. If this is what you're after, instead see our investments and mortgages and homes guides. 

1. Determine the best savings strategy for you

No matter the amount you have in savings, you'll want to make sure every penny is attracting the best interest rate possible (see our Top savings guide for the current top payers). For many a blend of the four types below is likely to be a good strategy, depending on how much you value flexibility and access versus getting the best rate of return.

  • Fixed savings accounts offer the top rates, though you can't access your cash. Here you lock up your money for a set period, typically between six months and seven years. You get a guaranteed rate of return, though you're unable to access any of the money until the account matures. 

  • Easy-access and notice accounts allow withdrawals, though rates are lower. As you're usually free to move your cash at will, here it's just a case of sniffing out the top rate and then ditching and switching if a better one comes along.

  • ISAs and premium bonds provide tax-free interest year after year. Paying tax on savings interest will be largely unavoidable on large savings, though there are a couple of ways to lower the tax bill.

    If you're a basic-rate taxpayer, you'll be able to earn £1,000/year in savings interest tax-free, or £500/year if you're a higher-rate taxpayer – this is known as your Personal Savings Allowance (PSA). Once you've exceeded that, or if you're an additional rate taxpayer, you'll have to pay tax on interest earned. 

    However, any interest earned in an ISA stays within a tax-free wrapper, so you'll never pay tax on it and it won't count towards your PSA either. You can get easy-access and fixed-rate cash ISAs, so the main restriction is the annual limit, which for 2023/24 is £20,000. So you sadly can't pile all your money in. Though once it's in an ISA, you can transfer previous year's into new accounts, so over a number of years you could build up £100,000s in one cash ISA. See Top cash ISAs for full help.

    Premium bonds also offer a tax-free place to save up to £50,000, however these are not like traditional savings accounts as instead of guaranteed interest, your rate of return is determined by a monthly prize draw (with prizes between £25 and £1 million). See Premium Bonds for full information and a unique calculator to see your estimated odds of winning. 

2. Spread your cash for maximum return and safety

It's been over a decade since we saw banks collapse and others bailed out by the taxpayer, but it's still sensible to plan in case the worst were to happen again. 

  • NS&I offers 100% safety with no limits, though rates can usually be beaten. If you'd rather not spread your money, you can save in 100% safety by keeping it in the state-owned bank NS&I. This is fully backed by the Government, meaning money put in there is as near to 100% safe as you can get. It'd take the UK going bust for it to be in trouble. It offers a range of normal savings accounts and ISAs, plus Premium Bonds as mentioned above, though its rates aren't usually the best, so you'd typically be sacrificing a bit on rate (it will appear in our Top savings guide if it does launch competitive rates).
  • The FSCS protects 100% of the first £85,000 in bank accounts, per financial institution. Outside of NS&I, the main protection available is from the Financial Services Compensation Scheme (FSCS), with the £85,000 limit applying to individuals, not accounts. So, if you had two accounts with the same bank, your money would still only be safe up to £85,000. It does mean, however, that a couple with a joint account would be protected up to £170,000.

    To guarantee your money's safety beyond these thresholds, you'd need to spread it across multiple institutions. But beware, although banks, building societies and credit unions operate under different names, they may belong to the same FSCS registered institution. In those circumstances, even if you split your cash between separate banks, you're still only protected up to £85,000 as they're part of the same institution.

    For example, Halifax and Bank of Scotland are both owned by Lloyds Banking Group and share a licence. They therefore count as one institution and you are only covered up to £85,000 across the two smaller firms. In contrast, RBS and NatWest are both owned by the NatWest Group, but each bank has its own banking licence, so their limits are separate. You could save £85,000 with RBS and £85,000 with NatWest and it would all be covered by the FSCS. For more details see our full guide to protecting your cash, including the temporary six-month increase in protection to £1 million following high balances received after a 'life event', such as selling a house, a divorce settlement and inheritance. 

3. Consider a savings platform to help manage your cash

If you've loads of cash and do want to spread it across multiple banks to maximise protection and returns, you'll need to be organised and prepared to put in some effort.

While this is more than doable (and the returns you'll get from your savings mean it's effectively a paid job), a 'savings platform' could make the task easier. As the name suggests, these are a 'one-stop shop' where you have one set of login details and can then choose from a range of savings accounts from banks they partner with. 

However, this means they are not 'whole of market' and would only show you accounts that pay them to feature – so you could miss out on a higher paying account you could open direct with that bank (our top savings accounts guide has a constantly updated list of the best on the market).  

These platforms therefore represent a trade-off between convenience and knowing you're always getting the top rate. If you're happy with that, here are a couple of things to consider:

  • Which institution is holding your money? When you open an account on a savings platform, your money is held in a 'hub' account until you decide which savings accounts to divide it between. The hub is usually operated by a UK bank so you need to make sure that any other funds you have outside of the savings platform don't combine and exceed the limit. For example, if you had £50,000 saved with Barclays and £50,000 in a savings platform hub operated by Barclays, only £85,000 would be protected under the FSCS.

  • Are there any fees? Some savings platforms charge set up fees, while others charge annually as a set percentage of the money you hold with them. There are also some platforms which require minimum monthly deposits. In any case, it's important to read the small print to make sure what you'll be expected to pay.

If you do decide to go ahead with a savings platform, there are a few fee-free versions to check out including Flagstone, Hargreaves Lansdown's Active Saver and Raisin*.

If there are accounts from savings platforms that currently beat the open-market rates, we'll feature them in our Top savings guide.

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FAQs if you've large savings

  • What are the best lump sum savings accounts?

    There is no single 'best' saving account for large amount, as the Financial Services Compensation Scheme (FSCS) offers the same £85,000 of protection per UK-regulated financial institution. We've full details of the different options and highest payers in Top savings

  • Do I pay tax on lump sums of money?

    The personal savings allowance (PSA) means basic-rate taxpayers can earn £1,000 in savings interest before having to pay any tax (£500 for higher-rate taxpayers).

    However, when it's paid can make a difference as you're taxed on interest in the tax year you can access that interest.

    For example, if you go for a fixed-rate account that pays interest 'at maturity', it’ll count towards your tax-free allowance for the tax year in which it ends. Monthly interest or interest paid into an easy-access account differs, as it’s counted for the tax-year in which it’s paid – though here you won’t get interest on the interest. See tax on savings interest for full help.

  • What are the best savings platforms for lump sums?

    Again, there is no single 'best' savings platform as none are whole of market, so you might find a higher rate on an account outside of these savings marketplaces. 

    However, we've listed three above that are fee-free. See savings platforms to try for more info.

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