Discussion
Some help, gentlemen, would be appreciated.
Mum has sold her house to move to rented accomodation near to us.
She has paid off the mortgage and is left with one hundred thousand quid.
She gets pensions of £1200 per month.
Where best to invest the £100,000 to provide her with an income top up each month, with easy access to funds when needed.
Thanks awfully.
Mum has sold her house to move to rented accomodation near to us.
She has paid off the mortgage and is left with one hundred thousand quid.
She gets pensions of £1200 per month.
Where best to invest the £100,000 to provide her with an income top up each month, with easy access to funds when needed.
Thanks awfully.
Has she any ISA investments?
With interest rates as low as they are you aren't going to get much for instant access and zero / very low risk.
How likely is she to need to access the lump sum?
With that kind of wedge it'd be worth speaking to an IFA with a view to stocks and shares ISA etc.
With interest rates as low as they are you aren't going to get much for instant access and zero / very low risk.
How likely is she to need to access the lump sum?
With that kind of wedge it'd be worth speaking to an IFA with a view to stocks and shares ISA etc.
Edited by trickywoo on Thursday 25th August 11:00
trickywoo said:
Has she any ISA investments?
With interest rates as low as they are you aren't going to get much for instant access and zero / very low risk.
How likely is she to need to access the lump sum?
With that kind of wedge it'd be worth speaking to an IFA with a view to stocks and shares ISA etc.
Thanks.With interest rates as low as they are you aren't going to get much for instant access and zero / very low risk.
How likely is she to need to access the lump sum?
With that kind of wedge it'd be worth speaking to an IFA with a view to stocks and shares ISA etc.
Edited by trickywoo on Thursday 25th August 11:00
She doesn't and we'll put the maximum in that.
She may need to chip away at the lump I expect.
80% Mid cap quantitative fund and 20K cash.
Reasoning; your Mother's life expectancy is probably higher than you think and you need to guard against inflation which will probably start to climb in the UK.
Every couple of years re balance to maintain 20% cash.
ETA probably safe to get about 300/Month without depletion, 250 might be safer
Reasoning; your Mother's life expectancy is probably higher than you think and you need to guard against inflation which will probably start to climb in the UK.
Every couple of years re balance to maintain 20% cash.
ETA probably safe to get about 300/Month without depletion, 250 might be safer
Edited by jeff m2 on Thursday 25th August 16:52
jeff m2 said:
80% Mid cap quantitative fund and 20K cash.
Reasoning; your Mother's life expectancy is probably higher than you think and you need to guard against inflation which will probably start to climb in the UK.
Every couple of years re balance to maintain 20% cash.
ETA probably safe to get about 300/Month without depletion, 250 might be safer
Great stuff thanks, that's what I was after.Reasoning; your Mother's life expectancy is probably higher than you think and you need to guard against inflation which will probably start to climb in the UK.
Every couple of years re balance to maintain 20% cash.
ETA probably safe to get about 300/Month without depletion, 250 might be safer
Edited by jeff m2 on Thursday 25th August 16:52
walm said:
jeff m2 said:
80% Mid cap quantitative fund and 20K cash.
80% equities for a pensioner?Do you really mean a quant fund or does that mean something other than Renaissance for example?
Mid cap quant to (hopefully) capture growth and to lessen the cyclic nature of the 100. Miners! hence commodity price dependent.
Industry norm on drawdown is 4%
So using 4% of the 80K it would give you between 250 and 300/Month with some inflation protection. The monthly payment would be taken from the 20K cash on deposit
After two years a rebalance could be done and a new monthly payment be calculated. Which could theoretically be increased by 20 or so Pounds a month.
Her life expectancy could be over 30 years we don't know. Gilt heavy at this time would leave her in the crapper in ten years.
Just my opinion, and thought it a little more practical than Premium Bonds but throw in a more conservative plan. That is the point of forums.
Soov535 said:
Some help, gentlemen, would be appreciated.
Mum has sold her house to move to rented accomodation near to us.
She has paid off the mortgage and is left with one hundred thousand quid.
She gets pensions of £1200 per month.
Where best to invest the £100,000 to provide her with an income top up each month, with easy access to funds when needed.
Thanks awfully.
How much security does she have with her rented accommodation, how much does she need to make? What happens if the rent goes up?Mum has sold her house to move to rented accomodation near to us.
She has paid off the mortgage and is left with one hundred thousand quid.
She gets pensions of £1200 per month.
Where best to invest the £100,000 to provide her with an income top up each month, with easy access to funds when needed.
Thanks awfully.
How old is she, is she fit and well? Does she have any other wealth?
Her pension income takes her over her personal allowance - she should consider using income funds of suitable risk levels to allow her to use her £5000 annual dividend allowance.
I'd suggest, in principle, a safe withdrawl rate of c.2.5/3% (max) per annum.
What if she needed long term care? Is there any provision for that?
Use all wrappers; the pension one is most important, I'd suggest.
What about this?
Purchase a rental property for say £70k and rent out. Should return you £500 per month which would equate to say £450 if you use a letting agent.
This would not only give you a return but you may also make a little on the property if/when you sell.
The other £30k would go in a cash ISA.
This would be a very low risk high yield solution that works - i speak from experience.
Purchase a rental property for say £70k and rent out. Should return you £500 per month which would equate to say £450 if you use a letting agent.
This would not only give you a return but you may also make a little on the property if/when you sell.
The other £30k would go in a cash ISA.
This would be a very low risk high yield solution that works - i speak from experience.
AMDBSTony said:
What about this?
Purchase a rental property for say £70k and rent out. Should return you £500 per month which would equate to say £450 if you use a letting agent.
This would not only give you a return but you may also make a little on the property if/when you sell.
The other £30k would go in a cash ISA.
This would be a very low risk high yield solution that works - i speak from experience.
Buying a property and renting it out is NOT a very low risk solution.Purchase a rental property for say £70k and rent out. Should return you £500 per month which would equate to say £450 if you use a letting agent.
This would not only give you a return but you may also make a little on the property if/when you sell.
The other £30k would go in a cash ISA.
This would be a very low risk high yield solution that works - i speak from experience.
Nothing is high yield low risk and easy access at the moment. So she needs to decide on her priority. With a £1.2k income already, she can risk a bit if she wants to top that up, or if she doesn't then I'd probably stick £20k in Santander for 1.5%. £15k in a cash ISA, a chunk in premium bonds, and maybe some in a place like rate setter too for a relatively low risk option. She won't be adding a grand a month to her income doing that, but should get a couple hundred.
If you want low risk then you are basically looking at getting a very small return on that sort of money. If you put £20K in a Santander account you are looking at getting 1.5% come November with a £5 a month account fee which will give you £20 a month.
The remaining £80K you could put in a 95 day access account with Charter Savings which would pay £90 a month interest.
So basically, the best return you could hope for with zero risk on £100K is £110 a month. Can you now see why property and classic cars have increased in value so much?
If I was her I would have kept the house and rented it out and lived off the rent.
The remaining £80K you could put in a 95 day access account with Charter Savings which would pay £90 a month interest.
So basically, the best return you could hope for with zero risk on £100K is £110 a month. Can you now see why property and classic cars have increased in value so much?
If I was her I would have kept the house and rented it out and lived off the rent.
sidicks said:
AMDBSTony said:
What about this?
Purchase a rental property for say £70k and rent out. Should return you £500 per month which would equate to say £450 if you use a letting agent.
This would not only give you a return but you may also make a little on the property if/when you sell.
The other £30k would go in a cash ISA.
This would be a very low risk high yield solution that works - i speak from experience.
Buying a property and renting it out is NOT a very low risk solution.Purchase a rental property for say £70k and rent out. Should return you £500 per month which would equate to say £450 if you use a letting agent.
This would not only give you a return but you may also make a little on the property if/when you sell.
The other £30k would go in a cash ISA.
This would be a very low risk high yield solution that works - i speak from experience.
What supports your statement?
AMDBSTony said:
This has worked for me very well which is why I say what I say - there are obvious conditions like location but we've cracked that.
What supports your statement?
I think I would do the rental too. House prices might fluctuate but people will always need somewhere to live so the rental income should be pretty steady. Only issue I can see might be maintenance eating in to the income. She could probably buy somewhere for less than £100k, get the same return and put money in stocks and shares ISA with a view to this being her maintenance fund - and possibly going up in value steadily too.What supports your statement?
It;s heart breaking that traditional investing returns so little. I'm trying to work out my pension at the moment and the amount you need for a low risk return is scary!
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