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  • FIRST POST
    • smej
    • By smej 19th May 17, 1:43 PM
    • 27Posts
    • 2Thanks
    smej
    Where to save 150k?
    • #1
    • 19th May 17, 1:43 PM
    Where to save 150k? 19th May 17 at 1:43 PM
    Apologies if this is a repost....I'm fairly sure I saw a similar thread recently but I couldn't find it again.


    Anyways the circumstances are that a family member has received 150k and are looking to save it. They have no mortgage and no outstanding debt. Premium bonds are maxed out. They are totally risk adverse and so want guaranteed returns. Therefore S&S ISAs are out of the question. As are the likes of 5% Nationwide accounts due to the low limits and hassle involved in setting up DDs etc. As is investing in pensions as they may need the money at any time.


    Are low interest general savings accounts and govt bonds the only option or am I missing something? They intend on speaking with an IFA but I reckon they will just recommend S&S. Thanks
Page 1
    • AnotherJoe
    • By AnotherJoe 19th May 17, 1:50 PM
    • 6,876 Posts
    • 7,315 Thanks
    AnotherJoe
    • #2
    • 19th May 17, 1:50 PM
    • #2
    • 19th May 17, 1:50 PM
    Ah, another "cake and eat it" post about someone who wants to invest but they are "risk averse" and want "guaranteed" returns. I'd like a unicorn on a pink stick as well

    They can get rubbish guaranteed returns by putting it in bonds and similar. Perhaps 1 to 2% and they will be "guaranteed" to lose money long term.

    Some people cant be helped until they understand they are just swapping different risks and the only guarantees in life are the two well known ones.
    • AndyT678
    • By AndyT678 19th May 17, 2:42 PM
    • 692 Posts
    • 921 Thanks
    AndyT678
    • #3
    • 19th May 17, 2:42 PM
    • #3
    • 19th May 17, 2:42 PM
    They are totally risk adverse and so want guaranteed returns. Therefore S&S ISAs are out of the question.
    Originally posted by smej
    So no investing in company stocks, govt bonds etc... Fine.

    As is investing in pensions as they may need the money at any time.
    Originally posted by smej
    So actually, is fine to invest in company stocks, bonds etc... with uncertain returns just as long as the money is inaccessible to them and taxable when taken rather than tax free?
    • Audaxer
    • By Audaxer 19th May 17, 2:52 PM
    • 244 Posts
    • 71 Thanks
    Audaxer
    • #4
    • 19th May 17, 2:52 PM
    • #4
    • 19th May 17, 2:52 PM
    If they are totally risk averse and want guaranteed returns, there is no point in speaking to an IFA. If they might need immediate access to the full amount then it is too risky investing it in S&S, so best just putting it in various bank accounts to get the best of poor savings rates.

    Bear in mind that it would be risky to leave more than 85k in any one bank as that would be over the Financial Services Compensation Scheme limit.
    • stoozie1
    • By stoozie1 19th May 17, 4:07 PM
    • 238 Posts
    • 89 Thanks
    stoozie1
    • #5
    • 19th May 17, 4:07 PM
    • #5
    • 19th May 17, 4:07 PM
    How old is the family member?
    • Linton
    • By Linton 19th May 17, 4:15 PM
    • 7,971 Posts
    • 7,780 Thanks
    Linton
    • #6
    • 19th May 17, 4:15 PM
    • #6
    • 19th May 17, 4:15 PM
    A sensible place for very large sums of money is an NS&I direct saver account with an interest rate of 0.7%. These are fully guaranteed by the government. You wont get much more than that for instant access at zero risk (other than inflation).
    • enthusiasticsaver
    • By enthusiasticsaver 19th May 17, 6:55 PM
    • 3,659 Posts
    • 6,571 Thanks
    enthusiasticsaver
    • #7
    • 19th May 17, 6:55 PM
    • #7
    • 19th May 17, 6:55 PM
    National Savings investment bonds pay 0.75%. Was 1% but recently gone down. That is about as risk free as it gets.
    Debt and mortgage free and saving for early retirement
    • Froggitt
    • By Froggitt 20th May 17, 11:19 AM
    • 5,780 Posts
    • 3,059 Thanks
    Froggitt
    • #8
    • 20th May 17, 11:19 AM
    • #8
    • 20th May 17, 11:19 AM
    Or you could choose to take some risk with some of the money, like the pension investment. e.g. stick 30k of it in Tesco 2033 bonds yielding about 4.5% now. Will they be bust by 2033? Probably not. Maybe 1 in 100 chance, and if it comes through, its likely there are bigger problems in the world to worry about.

    Bonds like that are not subject to as much volatility in the market eg their share price and the dividend might halve due to a price war with Asda or Lidl, but the price of these bonds and their redeemability for 1 in sixteen years time is likely to be unchanged.
    illegitimi non carborundum
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