Safe investment, maximum gains - circa £600k
Discussion
Hi all
A family member has come in to some money, sadly due to a death.
The house is paid for, no mortgage. Said person doesnt work so im unsure if that effects the tax side of things but ultimately has around £600k to invest. I use the term invest as no immediate requirement to use the money.
Initial thoughts are a savings account, with around 5% returns, possibly invest in some funds on HL but appreciate this will come with fees and risk.
I was also going to suggest speaking with a IFA but no dount they have vested interests.
What would you do / suggest given that said family member could potentially live off of the interest annually.
Would welcome any thoughts and suggestions please.
A family member has come in to some money, sadly due to a death.
The house is paid for, no mortgage. Said person doesnt work so im unsure if that effects the tax side of things but ultimately has around £600k to invest. I use the term invest as no immediate requirement to use the money.
Initial thoughts are a savings account, with around 5% returns, possibly invest in some funds on HL but appreciate this will come with fees and risk.
I was also going to suggest speaking with a IFA but no dount they have vested interests.
What would you do / suggest given that said family member could potentially live off of the interest annually.
Would welcome any thoughts and suggestions please.
Edited by 1175Mk1 on Wednesday 5th July 19:25
It's really going to depend on the family member's attitude to risk, tax situation, knowledge of investing etc. Also, while living off the interest could be viable at the moment, how long will the current savings rates last?
PS: if the inheritance is currently in cash and it's sitting in a single account, it'd be worth telling them that the FSCS 'temporary high balance' protection only lasts for six months.
PS: if the inheritance is currently in cash and it's sitting in a single account, it'd be worth telling them that the FSCS 'temporary high balance' protection only lasts for six months.
Been in a similar situation and put mine in a 5% for 2 years. That's 30k a year pre tax. I didnt get a lot better with it invested after fees. Its good if you want to live off the yearly interest. If you dont want to take the interest then HL are a good bet as the share growth is compounded.
You could always put in the 5% for a year whilst you think about what to do. It gives you a year to think about it
You could always put in the 5% for a year whilst you think about what to do. It gives you a year to think about it
BoRED S2upid said:
Is that what they want to do? Live off the interest?
They have no passion to spend the money. Has one dependant child aged 9 so at most maybe a nice holiday.. new kitchen. Other than that, just the usual spends of food, clothes, petrol etc. If it was 40k a year on interest, this would be more than enough.If it was me, id be living the dream, nice cars, no work, holidays, apartment abroad.. but they dont want this
C69 said:
It's really going to depend on the family member's attitude to risk, tax situation, knowledge of investing etc. Also, while living off the interest could be viable at the moment, how long will the current savings rates last?
PS: if the inheritance is currently in cash and it's sitting in a single account, it'd be worth telling them that the FSCS 'temporary high balance' protection only lasts for six months.
Thankyou for your reply.PS: if the inheritance is currently in cash and it's sitting in a single account, it'd be worth telling them that the FSCS 'temporary high balance' protection only lasts for six months.
Cash is currently in a single account, noted regarding the 6 months. Semi aware of that hence wanting advice what to do.
Export56 said:
Been in a similar situation and put mine in a 5% for 2 years. That's 30k a year pre tax. I didnt get a lot better with it invested after fees. Its good if you want to live off the yearly interest. If you dont want to take the interest then HL are a good bet as the share growth is compounded.
You could always put in the 5% for a year whilst you think about what to do. It gives you a year to think about it
I suspect this is the advice ill give them going forward. 5% and garunteed is great given no risk! Its what happens after that year.. dont want to think that the 30k could have been 50k but I guess thats what we all think etcYou could always put in the 5% for a year whilst you think about what to do. It gives you a year to think about it
Thankyou for your reply.
Edited by 1175Mk1 on Wednesday 5th July 21:48
I've no experience of them but there are services such as Flagstone who will manage your savings across providers so the entire pot is covered by FSCS limits.
With that kind of sum arriving at once I'd imagine a fair bit of the challenge could be trying to work out the best way of using any wrappers to minimise tax.
Other than that it could be as simple as save some and invest some.
With that kind of sum arriving at once I'd imagine a fair bit of the challenge could be trying to work out the best way of using any wrappers to minimise tax.
Other than that it could be as simple as save some and invest some.
Probably best to speak to a financial planner. The few posts you’ve made here would suggest to me that they’re best perhaps speaking to a professional - I mean that in the way that your version of what you’d do is so far from theirs that I doubt it’s healthy you advising them. It’s also £85k protected vs £75k.
They can earn quite a chunk without paying tax, but it depends on exactly what you mean by ‘unemployed’ - I suppose - how do they survive? They may find if on benefits that certain things change once you have a bit of cash?
They can earn quite a chunk without paying tax, but it depends on exactly what you mean by ‘unemployed’ - I suppose - how do they survive? They may find if on benefits that certain things change once you have a bit of cash?
Well for a start they can shovel £49k a year into ISAs so it will take them 12 years to get it all squirrelled away. There's other vehicles like VCTs so for 600k professional advice would be a good idea. That doesn't mean an IFA charging a percentage every year, it means paid for advice.
As a start you could talk to Nik at IM who can at least advise what the options are - it's free.
https://www.pistonheads.com/gassing/topic.asp?h=0&...
As a start you could talk to Nik at IM who can at least advise what the options are - it's free.
https://www.pistonheads.com/gassing/topic.asp?h=0&...
If it was my money I’d be spreading it around max out premium bonds in your name and the child’s then high interest bank accounts, fixed rate savings bonds banks and ns&i some “safe” dividend paying shares through isa think evil oil companies, utilities etc…
There would also be some cheap cars.
There would also be some cheap cars.
Mr Pointy said:
Well for a start they can shovel £49k a year into ISAs...
Is this a mistype, or am I missing something as I understood the limit for ISAs is £20k per year? Just that £49k seems an odd amount, neither double the limit per person or some other multiple. It might be of use to me if this is the case as I may take my 25% TFLS at the end of this year and would like to put as much in ISAs as I can, even if split between this and next tax year.OldSkoolRS said:
Mr Pointy said:
Well for a start they can shovel £49k a year into ISAs...
Is this a mistype, or am I missing something as I understood the limit for ISAs is £20k per year? Just that £49k seems an odd amount, neither double the limit per person or some other multiple. It might be of use to me if this is the case as I may take my 25% TFLS at the end of this year and would like to put as much in ISAs as I can, even if split between this and next tax year.
1175Mk1 said:
As the banks will only garuntee £75k, I'm guessing it would be better to put a bit into various high savings accounts rather than all in one pot.
It's now £85k per bank. If various accounts at different banks are used, you need to check that they're not part of the same group and use a shared banking licence, because then the £85k protection would probably be shared too.With £600k, I'd recommend having a one-off paid-for meeting with an IFA to discuss options. This should really focus on your family member's attitude to risk, their tax situation and time horizons. As another poster said, it may be that they're only comfortable holding cash or cash equivalents (such as Premium Bonds), or they might be open to other investments.
BoRED S2upid said:
OldSkoolRS said:
Mr Pointy said:
Well for a start they can shovel £49k a year into ISAs...
Is this a mistype, or am I missing something as I understood the limit for ISAs is £20k per year? Just that £49k seems an odd amount, neither double the limit per person or some other multiple. It might be of use to me if this is the case as I may take my 25% TFLS at the end of this year and would like to put as much in ISAs as I can, even if split between this and next tax year.Gassing Station | Finance | Top of Page | What's New | My Stuff