Where should i invest £300K

Baby_Depardieu

I have a lump sum of £300k which i need to invest wisely as i want to get some sort of monthly income from the interest accrued each month.

Im retired (mid 50's) and ideally would like to see this money work for me in the long term to prevent me having to return to work.

I would also like to have access to this money rather than it be locked away.

Ideally as low a risk investment as possible, as im not sure what the long term forcast is for the stock markets / oil prices etc... not sure how comfortable i feel investing in this area...

Is property a wise investment or should i put it into a high interest account? If so, which? Any ideas and suggestions to explore would be most welcome...

Many thanks

LOST

1. use up your yearly ISA allowance and go for a stocks and shares ISA into a high income fund - these usually pay income 20% above that of the index with which the fund is associated with.

2. High interest deposit accounts would be good too - I think Bradford and Bingley is the best at the moment - if you have a spouse who is in a lower tax band, consider putting the money in their name

3. Fixed interest gilts/bonds are secure, however, the recent hike in the base rate makes them less popular

4. Consider the use of insurance bonds - these can give good returns, but the term of insurance bonds usually start at a min 3 years.

5. National savings and investments income bonds are an option too - not tax free, I think they are paid gross and tax would be due in via self assessment

baldbloke_2

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dunstonh

With that sum you are going to have a range of tax issues to consider and you would need to pick the appropriate tax wrappers as well as the appropriate investments. Almost certainly a range of items is going to be required to meet your goals there is no way for anyone on this forum to answer your question correctly without knowing more information.

cheerfulcat

Baby_Depardieu wrote:

I have a lump sum of £300k which i need to invest wisely as i want to get some sort of monthly income from the interest accrued each month.

Im retired (mid 50's) and ideally would like to see this money work for me in the long term to prevent me having to return to work.

A "safe" investment is not going to provide more than 5% - is that enough income?

I would also like to have access to this money rather than it be locked away.

Ideally as low a risk investment as possible, as im not sure what the long term forcast is for the stock markets / oil prices etc... not sure how comfortable i feel investing in this area...

There are no low-risk investments where you can take the returns as income, as your capital will be exposed to inflation.

Is property a wise investment or should i put it into a high interest account? If so, which? Any ideas and suggestions to explore would be most welcome...

Property as in buy to let would, I think, be too risky since you could realistically only afford one or two with that amount. Commercial property funds are popular and do provide an income but are exposed to the market as a whole.

You could consider putting half into a high-interest account and half into a mixture of property funds and equity income funds. I personally would not buy bonds of any sort right now - I think that they are way too risky right now; contrary to what people might think they are not secure - but they do provide an income.

A lot depends on what other income you might have now or in the future. I would strongly advise against simply keeping the whole lot long term in deposit accounts, though.

EdInvestor

cheerfulcat wrote:

You could consider putting half into a high-interest account and half into a mixture of property funds and equity income funds. I personally would not buy bonds of any sort right now - I think that they are way too risky right now; contrary to what people might think they are not secure - but they do provide an income.

Agree with this view.

For a low risk lump sum income investor:

50% cash in high interest accounts
25% equity income funds
25% commercial property funds

For a low-medium risk investor:

50% equity income funds
25% cash
25% commercial property funds.

dunstonh

You could consider putting half into a high-interest account and half into a mixture of property funds and equity income funds. I personally would not buy bonds of any sort right now - I think that they are way too risky right now; contrary to what people might think they are not secure - but they do provide an income.

Just to show that a lot of it is based on opinion, I would disagree with that. A cautious sector allocated portfolio would actually be lower risk than property and equity income funds and would include bonds (of various types) and these can be invaluable with rebalancing. They may not be doing too well currently but they havent gone down 10% in the last 6 months and some people are happy with 6-7% a year (which is what they would have done over the last 12 months as an average with UK Zeros and UK Other bonds). Corp bonds are not the only bonds. However, it is the rebalancing where they really come into play.

cheerfulcat

Hi, dh,

I would ordinarily agree with you wholeheartedly on the importance of bonds, both corporate and government, within a lower-risk portfolio. I just feel very uneasy about buying debt in the current climate and think that it might be riskier than it used to be. But, as you say, it is very much a matter of opinion.

dunstonh

I certainly wouldnt buy them 100% but when you have a portfolio which you rebalance you need the low risk funds to offset the higher risk ones. UK Zeros may have been closer to 8% in last 12 months and corp bonds closer to 2% but if you are using them to offset Far East, US and European funds and then rebalance them back later on then that is where they really come into play. More so than the smaller rate of return that they are currently offering.

Saucepot

The 2:30 at redcar ?

baldbloke_2

EdInvestor wrote:

Agree with this view.

For a low risk lump sum income investor:

50% cash in high interest accounts
25% equity income funds
25% commercial property funds

For a low-medium risk investor:

50% equity income funds
25% cash
25% commercial property funds.

This is very simply and sensibly expressed. I should be interested to read what others who understand - rather than just comment on - these matters think of your breakdown. (Particularly the third portion)

Can I confirm once and for all that when you use the phrase Equity Income Funds you are basically referring to 'UK Equity Large Cap Value' Funds as described by, say, Morningstar - that is not Blend or Growth Funds. I am sorry to be so specific but differing terminology does cause me the occasional headache. Many thanks.

Alan