Looking for some advice
Discussion
Hi all
I'm looking for some advice re an £85k inheritance windfall for a relative and how best to invest.
Scenario: Pensioner, 100% homeowner, only other income is state pension and carers allowance.
Investment horizon perhaps 15 years, would need to be used to provide top up income so therefore needs to partially be accessible.
Current thoughts are 15K cash in locked away ISA and then a mix of savings account and low-ish risk Vanguard income portfolio, say 40% equities.
Any thoughts greatly received.
I'm looking for some advice re an £85k inheritance windfall for a relative and how best to invest.
Scenario: Pensioner, 100% homeowner, only other income is state pension and carers allowance.
Investment horizon perhaps 15 years, would need to be used to provide top up income so therefore needs to partially be accessible.
Current thoughts are 15K cash in locked away ISA and then a mix of savings account and low-ish risk Vanguard income portfolio, say 40% equities.
Any thoughts greatly received.
Speak to friends and get referred to a trusted financial planner/IFA before you listen to strangers on a forum!
There would be many questions I would want answers to before giving you a recommendation, I wouldn't ask them in a forum and nor would I give a recommendation here. Others will pipe up but with no consideration of broader issues that may be affected by their recommendations.
In all seriousness, this is a substantial sum (I'm assuming to you as well) so it should dealt with professionally - where you will also be protected.
There would be many questions I would want answers to before giving you a recommendation, I wouldn't ask them in a forum and nor would I give a recommendation here. Others will pipe up but with no consideration of broader issues that may be affected by their recommendations.
In all seriousness, this is a substantial sum (I'm assuming to you as well) so it should dealt with professionally - where you will also be protected.
IMO this area of PH often contains sensible guidance if you read around carefully.
You seem to be on the right track juggling risk vs reward. But bear in mind no sensible equity fund has ever collapsed to zero. A BIG crash might be, say, a fall of 30% and the market has always recovered over about 3 years in the past. In contrast low cash returns simply guarantee you will be losing money relative to inflation if you stick it in the building society.
I'm a huge fan of ISAs for tax free income & growth.
What would I do?
You seem to be on the right track juggling risk vs reward. But bear in mind no sensible equity fund has ever collapsed to zero. A BIG crash might be, say, a fall of 30% and the market has always recovered over about 3 years in the past. In contrast low cash returns simply guarantee you will be losing money relative to inflation if you stick it in the building society.
I'm a huge fan of ISAs for tax free income & growth.
What would I do?
- Invest £40,000 now in two or three funds with a modest risk profile of your choice. (You have already mentioned this)
- Invest £15,0000 now into a higher risk fund within an ISA. Maximise the tax free growth potential.
- Find a secure home to park the remaining £30,000 of cash.
- In 2016 and 2017 make £15k + £15k of further ISA investments to use up the £30k of cash.
- From 2018 onwards consider switching £15k chunks of the £40k into ISA.
Edited by Ozzie Osmond on Friday 24th July 23:15
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