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Savers are being demoralised by the continuing decline in interest rates. The official Bank Rate being cut to 0.25% was bad enough, but a series of other interventions has meant the returns actually offered by banks to are at negligible levels.

Is there anything that savers can do about it? In fact, there are several options that could potentially pay you far more than you will get from a savings account, although all of these alternatives have drawbacks – one of these that mitigates the drawbacks is our own residential property investment model which led us to setting up Plumtree Investments Ltd.

We have undertaken a series of meeting with IFA’s and accountants, to understand what your cash can do for you, and here are our thoughts and advice:

Bank accounts
What you could make: 3.6%
The pros No risk of losing money
The cons Fiddly process of opening and managing multiple accounts.

While thousands of savings accounts pay next to nothing, savers can make a return on cash, although there is a lot of work involved.

There are five high-interest current accounts on the market: from Lloyds, TSB, Nationwide, Tesco and Bank of Scotland. All pay their best rate on only a small tranche of your overall balance – lots of your precious spare time is needed to make this work for you.

There are also several regular savings accounts on offer that pay rates of up to 6%  – they often require you to have a “linked” current account with the same bank, further complicating the management of your affairs.  Do you have the time?

Retail bonds
What you could make: c.4%
The pros High rates
The cons Risk of losses, high dealing fees

Peer-to-peer websites involve lending your money to individuals. If you prefer to lend to large companies you could try retail bonds instead.

When you buy these bonds, which have been issued by a variety of companies including Tesco, National Grid, BT and HSBC, you lend that company money in return for regular interest, with your original investment back at maturity.

The risk is that the company may go bust, and while that is unlikely the safest bonds have seen their yields fall as prices rise in the market, so you may need to try slightly less-known businesses to get a decent rate which increases the risk for your hard earned cash.

Bond funds
What you could make: 4.5pc 
The pros Good diversification, professional management
The cons Risk of losses, fund charges, lack of fixed maturity date

If the idea of choosing individual firms to lend to makes you uneasy, you can leave it to a professional and invest in a bond fund. Many diversify your money among hundreds of companies.

One disadvantage of this diversification is that there is no maturity date for the fund as a whole, so you lack the (near) certainty of when you will get your investment back. Instead, the fund’s value will fluctuate in line with the markets. Returns are also eroded by the fund charges – there are a lot of variables here with no timing on getting a return.

Stock market funds that pay income
What you could make: 4.4pc
The pros Chance for good income and capital growth
The cons Risk of losses, potential falls in income, fund fees

This is probably the riskiest of the options listed. You are investing in shares that aim to pay good dividends, but run the risk that economic or other setbacks can lead to dividend cuts.
Even if your income is maintained (or increased), share prices could fall in line with the wider market. That said, good fund managers should be able to deliver rising income provided that you are prepared to leave your money with them for the long term, ideally five years or more – do you want to wait that long for a return?

A mixture of them all maybe?
What you could make – variable and unsure
The pros Good diversification, decent income
The cons Complexity of management

The best diversification comes from mixing different types of investment. Time and expertise is needed and that always costs you time and hassle.


Or, Plumtree Investments Ltd…
6% within 6 months, 7.5% after that with a monthly interest return!
The pros Low risk investment in bricks and mortar quick return.
The cons We don’t sell within 6 months and pay you monthly interest! (not a bad ‘con’ eh!?)

We have spent a lot of time thinking what to do with our own cash and how our expertise and network of contracts in the South Yorkshire area can benefit external investors, as well as friends who are frustrated with their cash producing low yields in a bank.

Our model is very simple.  A cash investment in a distressed property that we acquire for you at Below Market Valuation (BMV).  We mobilise one of two teams we have in place to refurbish the property (new kitchens, rewiring, bathroom, plumbing, plastering and painting and decorating) to sell.

If we sell the property before the end of the 6th month we pay you back your investment with a 6% return on top.  Typically a full refurbishment takes 4-6 weeks during which we are already marketing the property for sale.  Our aim is to sell the property as soon as possible so you get your return, and we can move on to the next project.

Selling beyond month 6 means we pay you a 7.5% premium on your investment when we sell, along with a monthly return!  We do this to further incentivise us to flip the property as quickly as possible.

Here is a simple illustration on a £50,000 investment:

Investment/Purchase Price    £50,000


  Your ROI

Month 1-6 sales ROI 6.0 £3,000
Month 7-12 sales ROI   7.5 £3,750
Month 7 onwards monthly rent 0.75 £375 pm






Alternatively we offer an unescured loan agreement with a bi-annual 6% return over a 2-year period.‚Äč

Your investment is wise because:

1.    We have acquired a distressed property…
2.    …at a BMV price courtesy of our local knowledge & contacts.
3.    We can refurbish a distressed property within 4-6 weeks, to a fit-for-sale standard at a cost only we can access due to our mature and trusted supply chain.  The property is marketed in the first month to ensure we sell the property in a timely manner to ensure your ROI is as quick as possible.
4.    The South Yorkshire property market is set for a boost due to both Chinese and European investment, infrastructure projects (Sheffield flood defences) national strategic centres of excellence (Doncaster's High Speed Rail) and big corporates committing to the region (HSBC in Sheffield).


If you are interested in learning more please call Damian Hicklin on 07989 420 291 or drop him an email at and he will happily come to meet you and discuss how we can work together.

You can follow Damian on Twitter @Plumtree_Damo or on LinkedIn.


Plumtree Investments Limited. Registered in England No. 10373234.

Registered office address Sidings House, Sidings Court, Lakeside, Doncaster, South Yorkshire, DN4 5NU.


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