INVESTMENT CLINIC

I HAVE about £250,000 from life savings and the proceeds of a house sale in my bank account. What should I do with it? S.C., London. The first thing to ask yourself is what you want the money for.

If you don’t need it for a while, consider the stock market — that’s where you’ll get the most growth.

When investing a large sum, it’s best to see an independent financial adviser. Find one on unbiased.

co.uk or by calling 0800 023 6868. however, it’s unwise to invest in the stock market if you need the money soon because a sharp move in share prices could wipe out a large chunk of your savings.

If this is the case, you’re best off using a savings account, and the best-paying instant access accounts are RCI Bank and Virgin Money, both offering 1.3 pc.

But there are a few things to consider.

The Financial Services Compensation Scheme will protect the first £85,000 you hold with any one bank or building society that is signed up to the scheme if it goes bust.

That means you will have to spread your money around four savings providers to ensure all your £250,000 savings are covered.

But be careful, because some providers share the same FSCS licence, such as AA, Bank of Ireland and Post Office. So if you have accounts with all three, make sure you don’t exceed the £85,000 limit.

You can find a list of the firms who have the same FSCS licence at bankofengland.co.uk.

If you don’t want to place your money in several accounts, you can put all of it with National Savings & Investments and every penny of your money will be guaranteed.

Its easy-access direct saver is currently paying 0.95 pc while premium bonds pay the equivalent of 1.4 pc.