How to invest 60,000 lump sum?

spiceman_2

Hi everybody, Once again i'm looking for some advice please.

Me and my family are not very good with money and require some help. My Dad has just retired from work at the grand old age of 65 and has had a private pension mature giving him a lump sum of 60,000 pounds.

Could anybody please tell us how the best and safest way to invest this amount of money. With all the money matters going on in the country at the moment we are somewhat lost.

Thanks for all your help.

1echidna

You would be much more lost if you had been looking at investment at the height of the boom and various financial advisor types had told you look how good equities and property are doing. Chances are you might well be looking at paper losses of 30% or more on what were said to be low risk investments. As it is we are much nearer a low rather than high point in markets so now may not be a bad time to invest just a little in equities. However I think you are looking for savings accounts not investments as you stress safety. Suggest you read Martin's article on savings on this site.

spiceman_2

Thanks for your help.

Like I said I'm not very good with money and savings , Could anybody else help?
I've tried looking and reading the savings posts but this site is massive! Does he just place the money in lloyds or something. What about ISA, heard about them but dont understand much about them. He would just like the best interest in a safe manner earning what ever is most.

Cheers

KingL

You may have misdirected folk with use of the word investing. If you are looking at low risk stuff, then you mean "saving", not investing.

Click on the orange tab at the top of this page ("Banking Saving") and have a good thorough read of that. It should tell you 95%+ of what you want to know.

amcluesent

>My Dad has just retired from work at the grand old age of 65 and has had a private pension mature giving him a lump sum of 60,000 pounds<

IIRC, aren't you obliged to buy an annuity with a pension pot? This reflects that the pension was built up with advantageous tax-breaks so the govt. insist you use it to guarantee an income, rather than then blow it all at the bookies.

dunstonh

IIRC, aren't you obliged to buy an annuity with a pension pot?

Only from age 75 (ignoring ASP).

EdInvestor

amcluesent wrote: »

IIRC, aren't you obliged to buy an annuity with a pension pot?

25% of the pension can be taken out in tax free cash.

If Dad doesn't need regular income, he could look at Nationals Savings Index Linked Certificates. They are as safe as it gets, pay interest of inflation plus 1% tax free, a good rate at present and you can put in a total of 30k now.

https://www.nsandi.co.uk

JamieJM

Spiceman - I read your post to mean that the lump sum you are referring to is the tax free cash and not the "pot" that is being used to provide your dad's pension itself. Hope that's right.

I would suggest that you take your dad along to see a financial advisor who will be able to give you advice relating specifically to your dad's circumstances, what it is he wants to achieve (income/growth), tax status, any liabilities etc etc. Someone pointed out the difference between savings and investment - if all you want is a deposit account with a good rate of interest there are many ideas on this site with up to date interest rates, the best deals etc..

ISA stands for Individual Savings Account and every adult gets an annual allowance of £7200 that they can save/invest via an ISA. In simple terms it is a tax free wrapper that means HMRC cannot take a chunk out of any interest or gains made within it. A maximum of £3600 can be put into a Cash ISA in any one tax year with £3600 left to invest in an Investment/Stocks and Shares ISA. However if you choose you can invest the whole amount into the Stocks and Shares element but this would be at the expense of your Cash ISA. Would suggest you utilise at least the cash ISA allowance - use it or lose it as they say!!!! If you and your dad aren't used to dealing with this amount of money the best advice anyone can give you is to take personal advice from a professional (ideally independent) as everyone is different and what is good for the goose isn't always good for the gander. Most people benefit from diversifying where they hold their assets e.g. cash, fixed interest investments, shares etc and you can invest in low risk vehicles that protect or guarantee your capital as a minimum if they are suitable. Hope this helps