Best investment options?

jamesd

MoscowMule, an IFA found from unbiased.co.uk is really what you should be investigating. You should expect the trust to pay no more than 2-3% in initial costs and the built-in 0.5% commission that is standard in many investments for ongoing advice including annual investment reviews.

If you did want to avoid an IFA one option that you could act on now and must at least start within a few weeks is the 10% for one year Halifax International regular saver account that can take up to 2,000 a month.

Another option that avoids traditional investments is Zopa, where returns of 9-11% after allowance for fees and bad debt are currently likely to be achievable, with actual low bad debt rates suggesting that an extra 1-2% may be achieved. One major caution is that the money is locked up for three to five years and you cannot get it all back, except for regular capital repayments, until then, though only a little would still be left invested five years after starting to pull out. The regular capital and interest repayments can be partially used to provide regular income. I don't know whether this will accept trustee managed investing.

Going back to normal investments, the markets are currently down so it's a good time to be doing regular investing, perhaps planning to invest the money in the higher risk portion of the investment mixture over two years. At the less volatile end it's currently easy to obtain corporate bond funds that will pay more than 8% and if your father's stocks and shares allowance can be used that will be tax free for the amount in the ISA. Absolute return funds exist that don't guarantee only one direction of movement but do a good job of limiting the downward moves to a few percent.

You should also consider whether purchasing a lifetime annuity may be the best course for some of the money. This will depend on his life expectancy and health, paying more initially if health is poor or for a smoker or if he's very overweight.

There are also term annuities, say for five years, that take capital and use it to provide a regular income, some of which is the capital. It can be very tax-efficient because much of the income is just returning the capital and could be used with part of the money to provide a certain income while you invest the remainder.

Any decent IFA should be able to explain and draw up a plan that will achieve your objectives and you can reasonably expect to get 6% or so in income and a couple of percent growth, while hoping for the total of both to be in the 12-15% range before allowing for inflation, depending on the risk level selected.

Aegis

Spam by Justiin reported...