can i get 5% on my lump sum

tamzin03

Hello i have spoken to a financial adviser who has advised me to put my pension lump some into a mixture of corporate bond funds to get an income of 5%.he thinks the capitol will grow as well as provide me with an income.anybody out there had any experience in taking an income from theese funds is it achievable and will the capitol be safe

Debt_Free_Chick

No - sorry

yelf

Debt_Free_Chick wrote: »

No - sorry

yes, in a number of ways: invest in a cash investment giving 5% interest. Or invest in an investment bond, in a cash fund, and take 5%pa tax deferred withdrawals.

Debt_Free_Chick

yelf wrote: »

yes, in a number of ways: invest in a cash investment giving 5% interest. Or invest in an investment bond, in a cash fund, and take 5%pa tax deferred withdrawals.

In theory, yes .... but is there one that offers a guaranteed 5% growth at the moment? I believe not, so that some of the capital would have to be drawn down to top the growth up to 5% and the OP wants "the whole of the capital completely safe", which I took to mean 100% capital preservation.

bendix

You're being far too literal, DFC. Taking your position to the logical extreme, there is no such thing as certainty because a meteorite could hit us tomorrow.

yelf is being pragmatic. There are 5% investments available that effectively guarantee capital protection (in the sense that I suspect the OP means, anyway, if not in the philosophical literaly sense of certainty).

Debt_Free_Chick

Yes, I took the OP literally to mean ...... I have £100k to invest, I want a product that will give me £5k income but leave my £100k intact. Given that gilts are yielding only around 3% for a five year term, I don't see a 5% return with no risk as achievable.

But perhaps the OP can clarify their objective

dunstonh

I read it as DFC in that it was written as an absolute safety of capital. In other words they didnt mind inflation or shortfall risk but didnt want investment risk.

With a slight risk taken its possible (indeed you can get 7.6% on structured products at the moment, which combined with a fixed interest sector spread and cash could be fine as a sensible judgement call in risk). However, with no investment risk then long term 5% p.a. fixed is not available.

marklv

tamzin03 wrote: »

Hello i would like to know if is possible to invest my pension lump sum and get 5% income whilst the whole of the capital is completely safe.Any body out there give me advice,

Yes - by using the lump sum to purchase an investment property. This should generate well above 5% per annum, plus you have the capital gains from the property as prices increase. But be prepared for the hassles of being a landlord/lady.

bendix

marklv wrote: »

Yes - by using the lump sum to purchase an investment property. This should generate well above 5% per annum, plus you have the capital gains from the property as prices increase. But be prepared for the hassles of being a landlord/lady.

Have you been asleep for the last two years?

marklv

bendix wrote: »

Have you been asleep for the last two years?

Make a more useful comment, otherwise don't make one at all.

What on earth do you mean? If you are referring to falling house prices, this is just a temporary blip, and infact they are rising again now in the South-East and we will soon have another boom. There is simply a HUGE pent up demand for housing, and with all parties now committed to mass immigration this will rise sharply in decades to come.

bendix

This is not a debate about house prices. Try reading the OP again. They want a 5% return and (effectively) a capital guarantee.

I don't think investment properties are quite what they are looking for, do you?