What would you do? £20k+

What would you do? £20k+

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Claude455

Original Poster:

169 posts

145 months

Saturday 25th February 2017
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Hi all,

For the last 12 years I've been investing in a SIP through my employer, offering BOGOF on shares in the company with a maximum investment of £125 per month.

Shares 'mature' and can be sold free from income tax and NI after being held for 5 years (although CGT applies), and that portion of my holding is currently worth around £20k. The portion of my holding which still attracts tax & NI is roughly £15k (pre-tax).

We are planning to extend in 2021 and are relying on selling 'matured' shares to part-fund the work, the other part being a draw on equity when we remortgage, but I'm obviously nervous about such a non-diversified portfolio and the implications.

I could cash in the £20k today and put it into a savings account - completely risk-free for 4 years, but what other options are there which will see my home improvement fund work a little harder but with less risk than all our eggs in one basket.

What would you do?

Claude455

Original Poster:

169 posts

145 months

Tuesday 28th February 2017
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I'm researching investment funds within an ISA wrapper, or even P2P lending through funding circle, for example, but I want to avoid risk and will be spreading my capital across a variety of vehicles. Are there any other considerations? Thanks

bobclayton

126 posts

105 months

Tuesday 28th February 2017
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Bearing in mind that from April you can put £20k straight into a product with an ISA wrapper, I'd be looking down that route. Go for a lower risk portfolio product somewhere for diversity and whilst 4 years is a shorter time scale you'd be alright.

ellroy

7,006 posts

224 months

Tuesday 28th February 2017
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If you're looking at 4 years duration, you're below the accepted 5 year minimum view for market based holdings.

I'd also mention to be somewhat wary of 'lower risk' funds etc at the present, typically these will have a reasonable amount of bond exposure within them. When interest rates climb, bond prices go the other way. Might not be the best time for that kind of exposure.



Edited by ellroy on Tuesday 28th February 15:51

Dave350

359 posts

117 months

Tuesday 28th February 2017
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As per my last tip in the Share Tips thread, I'd be putting a £5k into Boohoo.

Fantastic UK online clothing company with huge growth in USA & Internationally.

I've got c.£20k in there at the moment although I'll be selling £10k in the summer to support a house move!

Claude455

Original Poster:

169 posts

145 months

Tuesday 28th February 2017
quotequote all
Dave350 said:
As per my last tip in the Share Tips thread, I'd be putting a £5k into Boohoo.

Fantastic UK online clothing company with huge growth in USA & Internationally.

I've got c.£20k in there at the moment although I'll be selling £10k in the summer to support a house move!
Thanks Dave but that level of risk isn't something I can afford to take.

Thanks for other replies, food for thought and more things to look into.

DonkeyApple

54,934 posts

168 months

Tuesday 28th February 2017
quotequote all
Claude455 said:
I'm researching investment funds within an ISA wrapper, or even P2P lending through funding circle, for example, but I want to avoid risk and will be spreading my capital across a variety of vehicles. Are there any other considerations? Thanks
What's worth considering is that Crowd Funding is not protected by the FSCS. Your capital is 100% at risk and being lent out by typically typically poorly qualified/experienced 'investors' who have no skin in the game and no risk to entities and individuals unable to borrow money from any of the conventional routes and over which you have absolutely no control.

Conversely, with investment funds (assuming you buy via a regulated entity) you have full protection plus their worth is fully risk valued by an open, liquid and professional market place.

It's wise to spread capital (if there is enough of it to not be hit by minimum fees or for fixed fees to be significant) but important to recognise that P2P lending is in layman terms a back street bookie offering 2:1 odds on a three legged Spanish donkey riddled with herpes surviving being thrown off a church tower.