£15,000 to invest!

Oscar

Me???I wish!!

However MIL has. She is 60,retired and a widow.She pays tax on the pensions she gets. 5yrs ago she invested £15k with Friends Provident.The period of investment is up and she has apparently gained £900 in this time with which she is not impressed. So she is considering taking it out and re-investing elsewhere ....but where?

She has just put another £3000 into a mini ISA and has another £3000 ready for the new tax year.

She is not that happy in her home and a move could be on the cards but not in the immediate future. I think she would be willing to re-invest for another 3-5yrs depending on the returns....your suggestions would be appreciated.

Debt_Free_Chick

Invest or save?

Does she need income from this "investment" or does she just want to tie up the capital and let it grow?

EdInvestor

It sounds as though she might have had a Friends Prov With profits bond.

That's a medium risk investment. In the first instance, if she wants to do something else at the same or lower level of risk, then she could use up the other half of her ISA alllowance - that's 4k now and 4k for next year.

For next year a commercial property fund (or two) might be good - this is a low risk asset class only now becoming available for ISAs. She should get a decent yield ( 5%+ ) plus capital gains, nice steady return.

For this year's ISA, a fund which invests ar the lower end of the equities risk spectrum might be worth considering - these funds are called Equity Income funds, they invest in shares that pay high dividends, so the income tends to be quite stable. The most popular fund in this area for many years is Invesco Perpetual's High Income fund, run by the same star manager (Neil Woodward) for more than 15 years.

Another similar fund is F&C's Stewardship income fund, which invests in the same way but with an ethical twist - thus it doesn't have tobacco shares as the Woodward fund does.

This is not advice, DYOR.

Make sure she goes through a discount broker like Cavendish or Hargreaves Lansdown so she doesn't pay the 5% initial charges on most of these funds.This is very important.

If a move is on the cards she might be best to keep the rest of the money in a high interest account so she can get at it easily.

Oscar

Debt_Free_Chick wrote:

Invest or save?

Does she need income from this "investment" or does she just want to tie up the capital and let it grow?

No she does not need income from the investment. She wants to tie it up so that she wont dwindle it away

dunstonh

Well, she needs to consider her attitude to risk. She has been in what we can only guess is a medium risk product. Either a with profits fund or investment linked to FTSE100. The limited growth is due to the stockmarket crash right after she invested.

So, she needs to think about what volatility she is willing to accept with her money in aim to get the most from it. Her reaction to the limited growth achieved suggests she isnt very keen on medium risk investments. That being said, other medium risk investments available over the exact same period would have given her around £23,000 back so maybe the fault is with the investment she chose and not her actual risk profile.

There are tens of thousands of options available out there. We need a bit more help narrowing the options down.

Oscar

dunstonh wrote:

So, she needs to think about what volatility she is willing to accept with her money in aim to get the most from it. Her reaction to the limited growth achieved suggests she isnt very keen on medium risk investments. That being said, other medium risk investments available over the exact same period would have given her around £23,000 back so maybe the fault is with the investment she chose and not her actual risk profile.

There are tens of thousands of options available out there. We need a bit more help narrowing the options down.

I am not sure what the investment was but it was invested after her OH died and would have been on the advice of a financial advisor at the time. Understandably she probably said to whoever ,yes whatever thats fine as long as I dont loose my initial investment. She would not have been in a position to take in what was being said and I doubt very much if she would understand it anyway even now.

Oh dear this seems like it is going to be more difficult than I thought.

dunstonh

Oh dear this seems like it is going to be more difficult than I thought.

This is why advisors exist. The theory being that they reduce the options available down to make that recommendation. If you do it yourself, then it is possible but you do need to know what is available, how it works, why it works and if it is suitable.

Seeing as your MIL probably chose wrong before (FP used to operate a tied salesforce. Never a good idea to see a tied advisor), it highlights the importance of getting it right this time.