I knew absolutely nothing about investment, did a lot of research, and ended up with Vanguard. As someone said above, it's almost too easy to setup and give them all your money...
They offer pretty much any plan you can think of. If you have a rough idea of when you want your money back and how much risk you want to take, they will tailor for that.
They're not a British company, and they put your money into a large portfolio of investments around the world, so Brexit would have very little impact, unless of course it affects the global economy.
Stocks and shares make most sense when investing over a number of years because you can potentially lose money in the short term, but also because of the compounding interest. The longer, the better.
Go and travel the world. LOL 30k would not last long
the 20/40% comes at the expense of being told what you can and cant do with your money. the goalposts change.
They've made pensions much more flexible over the last few years. The lifetime cap ($1.03m) is the only negative thing introduced (and you could freeze to avoid the reductions), but with only £30k to invest, I doubt you'll be hitting that for a good few decades....
So, yes you're at the mercy of the Chancellor but recently things have been pretty positive.
How would advice change if one had a final salary pension that will max out allowances, the mortgage was at 0.5% LTV, there was a lump sum and a decent surplus each month?
Property in the Alps maybe?
Diversifying outside the UK feels sensible at the moment and we could enjoy it too.
Or does Brexit make that a worse idea not a better idea?
Quite a few landlords seem to be bailing out, looking on the sales portals ex btl s are obvious. Then you look at what they paid and like the stock market, the late entrants suffer the biggest losses. Its still got some way to go as interest creep up and landlord reforms bite. I actually think btl still pays but you have to look hard.
Pick an efficient vehicle; pension or ISA.
Choose an economical platform - charges will eat into your returns in the long term; look at Interactive Investor or iWeb (by Halifax I think)
Choose your investments. If you have a long-term perspective, say 10+ years, global equities to reduce risks; use a low-cost ETF to keep costs down. A 60/40 split of small/large-cap firms.
<span style="font-size: 0.8rem;">Managed funds have higher costs and on average perform less well than ETFs which track the market, and have low costs. Vanguard are a well-regarded ETF provider. </span>
Fundsmith is a managed fund, 1% fees so better than many but not cheap. Their flagship fund has performed well.
You could put the majority into ETFs, and a part into a managed fund if you think you've found a good one and like the interest of following it. But be warned that some very successful funds and their managers have gone on to lose their lustre. And investments that shoot out the lights for a couple of years are unlikely to continue to perform.
Bonds are at risk of rising yields / inflation. But if it all goes pear-shaped then investment-grade bonds are the place to be. So there's an argument for holding some.
Make sure you have #ome liquid assets.
Ps These are examples, by no means the final word.
Have a play with Peer to Peer lending, I am getting around 12% on my 30k investments.
the 20/40% comes at the expense of being told what you can and cant do with your money. the goalposts change
Not really. Just use a SIPP. No one said you had to invest all of your spare cash either.
But personally the less people claim their free money off the tax man, the more for me and the less likely he is to stop the incentive.
For my 2p worth. I popped 10k into a Legal and General Global Index Tracker fund a year back. Its now up by 15 percent. Yep it can and will go down but have a look on youtube for a guy called Lars Kroijer who explains Passive Investing very well. All Wrapped up in a Stocks and shares ISA. BAboom!!!!
Had a similar sum in 2014, walloped it into mortgage, overpay a bit too, means mortgage free in 3.5 years time at age 46. I'm sure there were better financial options, but took the chance that interest rates will rise when I have more money kicking about, and if not, not having a mortgage will be awesome.
Have a play with Peer to Peer lending, I am getting around 12% on my 30k investments.
IIRC you can't put these in a tax free wrapper yet, so the 12% would be subject to 40% tax in the OP's case.
Rockape63's suggestion wins!
Bear-UK who are you getting 12% interest via peer to peer with?
IIRC you can’t put these in a tax free wrapper yet, so the 12% would be subject to 40% tax in the OP’s case.
Funding Circle has recently launched an ISA - doubt you'll get 12% though.
Similar situation, I have no pension and moneysavingexperts said the best thing I can do is put it intp a pension however I dont like locking it up like that or investing it all... so me personally I'm going to keep £10k as safety cash, £10k mortgage overpayment (28years left on it) and the rest into a pension.
I know I will maybe make more by simply sploshing it all in an pension but I dont want to lock up my cash like that until my mortgage is below 60% ltv
I could pay off my mortgage. Then I wouldn’t have to touch the pension funds I originally set up to pay it off after being advised that an interest-only mortgage linked to a pension was the way to go.
Which didn’t include losing the job I had at the time and never having the funds available to keep paying into that pension. I have had others since, linked to other jobs, but I feel that these type of mortgages should be investigated as a miss-selling scandal like PPI.
Count zero, you can complain about that advice. Only concern is whether you will be time barred regardless of whether complaint is valid.
Anchovies. Many many anchovies.
its all one big humblebrag anyway!
I learned that word recently! 🙂
Slight hijack, but welcome thoughts.
We’re currently selling a property for an elderly parent who is in care - through Power of Attorney.
Care home costs to pay and £30k mortgage to settle will still leave c£250 pot (reducing by £25k pa for care).
Need some funds accessible (for those care costs) and then the balance to hold somewhere which is low risk, with reasonable returns and when ultimately it comes to probate, readily accessible.
Are NS&I Premium Bonds the answer or should I look elsewhere too?
Premium bonds net you c 1.4% but are free of tax. Not brilliant, but the capital is safe.
Focus on the income gap between care costs and income. Make sure you claim the care allowance, 58 gbp per week or higher rate 85 i think. Care allowance is tax free.
So say net income is 15k and care is 25k, you are 10k pa short v the 250k pot.
Just diversify whatever you choose, some will win, some will lose. You don't really want to be speculating with the pot as the capital cannot be replaced. Ftse s yielding c 4% so there's the benchmark.
If it were me i would ask the care home if you can have a discount for prepayment of say 3 months.
Good luck
Is there a reason why you need it to be low risk? If the house sale had only netted 200k would you be in the shit somehow? If not I'd bung it in shares myself.
If not I’d bung it in shares myself.
Interesting time to be investing....
Yeah, it needs to be low risk as it’s not my money. We have PoA for a parent, so we can’t see the funds from house sale evaporate! Nor is it in our interest (sister and I) to see any of it at risk at all.
So ultimately need steady returns, and able to access again without too much heartache in a few years (blunt but true, parent is 82, living four years with progressive Lewy Bodies dementia)
Thanks pool man, yes she receives State Pension, Attendance Allowance and a couple of pitifully small private pension payments (£70ish per month in total).
Whilst the pension relief is good, it's not all free money as is being said simply because the likelihood is you'll pay tax on it when you draw it down. In the case of a SIPP there is a 25% tax free element but the bigger gain is from relief at 40% but then only paying c20% on withdrawals if that's your circumstances.
So I bunged my spare £20k (first and last time in my life I’ll get to say that I reckon) into Fundsmith pretty much on the basis of reading this thread about a week or so ago, and it’s already worth, wait for it... £18k!
Now I know that stock and shares are a long term investment and can go up and down etc, but it does make me feel a little anxious... 🙄
Check if there's any kind of cooling off period. I invested in a stock ISA with L & G. It went down and I cancelled after 13 days and reinvested. I couldn't believe my luck.
So I bunged my spare £20k (first and last time in my life I’ll get to say that I reckon) into Fundsmith pretty much on the basis of reading this thread about a week or so ago, and it’s already worth, wait for it… £18k!
Don't sweat it, long term you'll still do OK. Even if you invested at the peak just before each major crash, you'd still be quids in after a few years.
Yes 5 years seems to be the minimum timeframe for equities. I started 4 years ago ago and the capital values of some stocks are in the red - tobacco for eg - however with divis reinvested i am still 15% up. Stock market can be a brutal place if companies don't deliver.
