Million in the bank
Discussion
If at the age of 65 He/She is so scared of stocks etc perhaps they should just leave on deposit.
Failing that and a rush of excitement might come from Vanguard GIA/ ISA and put in one of their global funds . More risk, but tax can be controlled by exercising / not touching investments are only taxed when realised
That what I do. 2 / 3 years money needed on deposit and rest in a couple of ETF's I am not quite as old but not far off and I'm not ready quite yet to fester in an easy rise seat
In a few more years when I start to draw pensions ( already retired ) I'll give most on a regular basis to the offspring ( Annual allowance and that excess wealth no tax thing. "make regular payments to another person, for example to help with their living costs" )
Failing that and a rush of excitement might come from Vanguard GIA/ ISA and put in one of their global funds . More risk, but tax can be controlled by exercising / not touching investments are only taxed when realised
That what I do. 2 / 3 years money needed on deposit and rest in a couple of ETF's I am not quite as old but not far off and I'm not ready quite yet to fester in an easy rise seat
In a few more years when I start to draw pensions ( already retired ) I'll give most on a regular basis to the offspring ( Annual allowance and that excess wealth no tax thing. "make regular payments to another person, for example to help with their living costs" )
Good Plan Ted said:
So I have a friend who just sold up a biz bad in total has £1.3m sitting in Lloyds earning 5%.
He’s 65 and no investments, and prepared to just pay tax on interest made, think stocks will worry him, what are the other stable/safe investment that I could interest him in?
Use a broker and buy short dated gilts . Currently yielding 4%. That or NSI savings bonds. Both very safe way of investing and no tax to pay on either as you wont pay tax on the capital gain.He’s 65 and no investments, and prepared to just pay tax on interest made, think stocks will worry him, what are the other stable/safe investment that I could interest him in?
Edited by Esquire on Friday 26th July 15:16
Assuming it really is a friend (if not well done 
) has he asked you for help?
The reason I'm asking is he's arguably already won and it would be a shame to risk a friendship if there's a chance that any risk to that win might be blamed on you if you were seen to suggest anything he's not comfortable with.
Does have an accountant or someone to help with optimising tax and allowances and wrappers?
That's arguably just as important with that sort of amount as what you actually do with it.
) has he asked you for help?The reason I'm asking is he's arguably already won and it would be a shame to risk a friendship if there's a chance that any risk to that win might be blamed on you if you were seen to suggest anything he's not comfortable with.
Does have an accountant or someone to help with optimising tax and allowances and wrappers?
That's arguably just as important with that sort of amount as what you actually do with it.
For starters I would suggest splitting it down across multiple banks/accounts to be covered by FSCS £85k per account or £170k if joint). Whilst it can be tedious to manage, modern electronic banking helps alot in terms of transferring the funds about. There is a service (sorry, can’t remember which financial institution provides it) that will do this automatically for you, taking a cut of the interest of course.
Like everything, it pays to shop around but you need to do some legwork to get the best rates. Fixed rate bonds are a good bet and, as said above, NS&I is about as safe as you can get in this respect as the cover limit (being treasury backed) is far bigher than FSCS. Well, until the Govt decide that it’s ok to raid it!!
Usual other stuff, maximum premium bond allowance etc. too.
Like everything, it pays to shop around but you need to do some legwork to get the best rates. Fixed rate bonds are a good bet and, as said above, NS&I is about as safe as you can get in this respect as the cover limit (being treasury backed) is far bigher than FSCS. Well, until the Govt decide that it’s ok to raid it!!
Usual other stuff, maximum premium bond allowance etc. too.
Esquire said:
Use a broker and buy short dated gilts . Currently yielding 4%. That or NSI savings bonds. Both very safe way of investing and no tax to pay on either as you wont pay tax on the capital gain.
Gilts is where I think I'd be.But I'm out of my comfort zone trying to determine which ones other than as low a coupon as possible.
ThingsBehindTheSun said:
£65K a year interest. If you were earning that in a PAYE job you would end up with about £4K a month.
How does it work with interest on savings, do you still have to pay NI on it?
This is the beauty of investing in Gilts. You only pay tax on the coupon so if you buy a Gilt with a low coupon you pay minimal tax and you will pay no tax on the gain on the bond bearing in mind the bond is discounted and will redeem at par. How does it work with interest on savings, do you still have to pay NI on it?
Run the bond to expiry, take the tax free profit then reinvest the original amount in another low coupon short dated gilt.
Edited by Esquire on Friday 26th July 15:34
This is a difficult one because all I read and experience is that tightening is starting to bite and even the US yesterday seems to be coming to the realisation that we are slowing.
Predicting future interest rates is impossible but empirically at some time they will come down since that’s what tightening causes.
On the futures market 93% of funds are predicting as of sept 2025 a fed rate of 3 to 3.5%
Based on this how does that change your friends model so to speak, in fact rates just fell as US inflation moderates
From personal experience, the slow erosion of capital is nothing compared to the losses that can occur very quickly with poor investments
Predicting future interest rates is impossible but empirically at some time they will come down since that’s what tightening causes.
On the futures market 93% of funds are predicting as of sept 2025 a fed rate of 3 to 3.5%
Based on this how does that change your friends model so to speak, in fact rates just fell as US inflation moderates
From personal experience, the slow erosion of capital is nothing compared to the losses that can occur very quickly with poor investments
Impressed he’s making 5% gross on that - Lloyds best rate for that amount is normally around 4% for easy access and that’s only via their “ Mayfair “ account.
Obviously tax is due on the £65k earned but no NI.
I don’t think Lloyds are going bust anytime soon but keeping so much of it with just one provider should possibly only be a short term thing.
Plenty of other providers to use ( can be a bit of a faff to set up unless he uses the Flagstone platform approach ).
Presumably some of that cash is going to be used for tax due unless that’s the nett ?
If the case then using some of the gains to invest in tax relief schemes probably also won’t be to his liking.
Obviously tax is due on the £65k earned but no NI.
I don’t think Lloyds are going bust anytime soon but keeping so much of it with just one provider should possibly only be a short term thing.
Plenty of other providers to use ( can be a bit of a faff to set up unless he uses the Flagstone platform approach ).
Presumably some of that cash is going to be used for tax due unless that’s the nett ?
If the case then using some of the gains to invest in tax relief schemes probably also won’t be to his liking.
blue_haddock said:
Whack the full amount in premium bonds and then just leave the rest in a decent high interest account if they are mainly interested in the cash being safe and providing a drawdown.
This and/or pop 20k PA into a Cash ISA so thats at least starting to earn interest free returns.Means 70k this FY is at least working tax free.
If he fancies a bit of dabbling in winning cash there is also the CHIP prize winnings fund which could be another pot though it doesnt attract interest.
Good Plan Ted said:
He’s 65 and no investments,
First thing I would do is find out how much unused pension allowance from previous years I have and max that out into a SIPP.Could be as much as £160k. Or £320k if a couple.
Lots of advantages to doing this, but I would strongly suggest using someone like Vanguard who have a very low cost SIPP so fees don't eat into the pot.
If he does not want any "investment", then Vanguard offer a MM fund, VASTMGA. But beware returns will be very low.
Then £20/40k into a cash ISA @ c5% and do this each April.
What's left into what ever vehicle he wants to hold cash as best rate he can find.
Being aware of the FSCS limits and any risk associated depending on the bank in question.
I cant emphasise enough, if he wants to only hold cash then he needs to ensure that any accounts he uses are low fee.
[quote=gotoPzero
I cant emphasise enough, if he wants to only hold cash then he needs to ensure that any accounts he uses are low fee.
[/quote]
Obviously if held in different MM accounts absolutely , but cash held with Banks and the like either instant access or as more likely fixed period bonds should have zero fees surely ?
I cant emphasise enough, if he wants to only hold cash then he needs to ensure that any accounts he uses are low fee.
[/quote]
Obviously if held in different MM accounts absolutely , but cash held with Banks and the like either instant access or as more likely fixed period bonds should have zero fees surely ?
Another thought, I was contacted many years ago but an acquaintance who was going to earn 8 or 9% when rates were less than 2% with loan notes etc from a company called the High St Group.
He put a significant sum in and here's the risk, if I said don't do it and it went well, he'd be pissed so I said are you sure?
It was run by a self promoting, "I'm a local lad made good and I don't miss the footie with my kids" every man.
In 2021 my friend was very quiet on this and I thought there no mileage in even asking.
Yesterday the court gave permission to wind it up and investors look set to lose 100M
Other than it appears to be total wipe out, I know little of the finer detail but my friend isn't silly but was desperate to earn a outsized return and I think this kind of thing is very seductive.
He put a significant sum in and here's the risk, if I said don't do it and it went well, he'd be pissed so I said are you sure?
It was run by a self promoting, "I'm a local lad made good and I don't miss the footie with my kids" every man.
In 2021 my friend was very quiet on this and I thought there no mileage in even asking.
Yesterday the court gave permission to wind it up and investors look set to lose 100M
Other than it appears to be total wipe out, I know little of the finer detail but my friend isn't silly but was desperate to earn a outsized return and I think this kind of thing is very seductive.
gotoPzero said:
Good Plan Ted said:
He’s 65 and no investments,
First thing I would do is find out how much unused pension allowance from previous years I have and max that out into a SIPP.Could be as much as £160k. Or £320k if a couple.
Lots of advantages to doing this, but I would strongly suggest using someone like Vanguard who have a very low cost SIPP so fees don't eat into the pot.
If he does not want any "investment", then Vanguard offer a MM fund, VASTMGA. But beware returns will be very low.
Then £20/40k into a cash ISA @ c5% and do this each April.
What's left into what ever vehicle he wants to hold cash as best rate he can find.
Being aware of the FSCS limits and any risk associated depending on the bank in question.
I cant emphasise enough, if he wants to only hold cash then he needs to ensure that any accounts he uses are low fee.
DaveA8 said:
Another thought, I was contacted many years ago but an acquaintance who was going to earn 8 or 9% when rates were less than 2% with loan notes etc from a company called the High St Group.
He put a significant sum in and here's the risk, if I said don't do it and it went well, he'd be pissed so I said are you sure?
It was run by a self promoting, "I'm a local lad made good and I don't miss the footie with my kids" every man.
In 2021 my friend was very quiet on this and I thought there no mileage in even asking.
Yesterday the court gave permission to wind it up and investors look set to lose 100M
Other than it appears to be total wipe out, I know little of the finer detail but my friend isn't silly but was desperate to earn a outsized return and I think this kind of thing is very seductive.
Make sure to read this ^^ and absorb it.He put a significant sum in and here's the risk, if I said don't do it and it went well, he'd be pissed so I said are you sure?
It was run by a self promoting, "I'm a local lad made good and I don't miss the footie with my kids" every man.
In 2021 my friend was very quiet on this and I thought there no mileage in even asking.
Yesterday the court gave permission to wind it up and investors look set to lose 100M
Other than it appears to be total wipe out, I know little of the finer detail but my friend isn't silly but was desperate to earn a outsized return and I think this kind of thing is very seductive.
If something seems too good to be true it probably is.
Stick to mainstream known reputable products.
Good Plan Ted said:
It was 6 months ago he put into a year fixed term im Lloyds, was a self employed maintenance chap-and thought he would just carry on working so never paid his NI, but split from his misses and so wants to travel.
You can currently “buy” a good number of years of NI from HMRC - worth doing as it’s a three year payback (ish).£20k ISA
£50k to Premium bonds - nice safe gamble.
£380k to NS&I 1 year bond (won’t pay out until next tax year and will generate ~£17,500 (tax free if no other earnings).
£85k in Lloyds as “Living money” for the next year
£465k in short dated Gilts (4.x% tax free ~£19,500)
Safer than a safe thing on a safe day - and should stop him blowing all his money on Thai lady boys 🧒
Jim
Stocks really could go either way atm. Central banks start cutting and initially stocks could rally. Then get a few bad surprises in the economy and stocks will quickly come back down. Just ask history. Economies already showing weakening…
I’d go bond funds. More upside protection in bond prices than downside plus you get the yield. Yield curve will disinvert…
I’d go bond funds. More upside protection in bond prices than downside plus you get the yield. Yield curve will disinvert…
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