Investing an inheritance

abloke36

I have recently inherited £250,000 and after clearing any debts I have around £210,000 to invest and have been looking at all my options.

I own my own home, no mortgage or rent to pay , am single and have no family to support.

I have not been working for the last few years as I was my father's primary carer. I previously worked in retail as a manager and my future pension will not provide much in the way of a pension. Currently projected to pay me approximately £40 a week when I reach 65. I am currently 46 years old.

So I am now 46, have no debt and would like to invest my inheritance to provide an income. I would like to return to work on a part time basis and work perhaps 3 days a week and concentrate on building my own photographic business selling prints as I am an enthusiastic Landscape photographer.

I reckon I would need £1200 a month to live comfortably and expect a part time job to bring in around £500 a month.

I have been looking at Santander's Stirling Corporate Bond Fund but as I am a novice at investments am not sure if this is an appropriate product. The fund charges 0.73% in administration costs. The advisor suggested this should pay me around £778 a month but is this after the charges have been taken ?

Another question is if I will be working on a part time basis only then I still need another 13 years full NI contributions to receive a full state pension. Can I buy my 'stamp' each year ?

Many questions but some advice on a Fund would be appreciated. Is .73% charge reasonable ?

What would you suggest?

Thanks

bendix

Seems pretty reasonable to me.

Be advised though that you are not guaranteed £778 a month. It is purely indicative, and returns can go up and down. ALSO - and this is very important to consider when buying managed funds for income - the value of your investment can go up and down too. Not a big deal if you are simply 'buying' an income, but you have to take it into account.

While you're in a reasonably good position, it does sound rather young to be using those funds for income generation, particularly as the sum isn't huge.

abloke36

bendix wrote: »

Seems pretty reasonable to me.


While you're in a reasonably good position, it does sound rather young to be using those funds for income generation, particularly as the sum isn't huge.

That is a concern of mine but I do not want to have to return to full time work unless I have to. Really trying to do a feasability study.

I already have everything I need as to a home, belongings so looking to how I live my life in the future. Setting up my hobby as a potential business would take time and effort.

bendix

It's a fine balance then. You will be using this capital to generate a borderline income so that you can semi-retire now, and - in the process - sacrifice investing the money for growth so that you can enjoy a better retirement in ten year's time.

It's your call, of course.

noh

I would suggest you see an IFA.
It would be very unwise to put all the money in one product especially an offering from a High Street bank.
You can use this site to find one in your area.
http://www.unbiased.co.uk/find-an-independent-financial-adviser/

dunstonh

I have been looking at Santander's Stirling Corporate Bond Fund but as I am a novice at investments am not sure if this is an appropriate product. The fund charges 0.73% in administration costs. The advisor suggested this should pay me around £778 a month but is this after the charges have been taken ?

The Santander sales rep recommended just one bond fund? Although, thats not a surprise when you look at how poor their range is. Just 10 funds and most sectors are not even covered (plus only one bond type covered).

Why are you considering a bond fund that was only launched 6 months ago and since then has underperformed sector average?

The negatives are: no history, underperformance since launch, Santander product (which usually means low quality) and eggs all in one basket.

Many questions but some advice on a Fund would be appreciated. Is .73% charge reasonable ?

The charge is reasonable but the investment is !!!!!. You are getting what you pay for.

What would you suggest?

See a local IFA. Not a sales rep from a bank. 100% in one limited sector fund is poor quality investing. Its normal for the banks but then they have a lower remit and are consistently in the financial press for poor quality investment advice. Its generally accepted now that the banks offer low quality investment products to low knowledge consumers because they can get away with it most of the time .

abloke36

Didn't realise inheriting money would cause such a headache.

I am a novice and my head is already spinning from a multitude of options and advice. On the one hand I get told not to see an IFA because of the commissions and start up costs and then the opposite.

Trouble is I can see both sides of the argument, :>(

dunstonh

On the one hand I get told not to see an IFA because of the commissions and start up costs and then the opposite.

Who told you that? Its a common line from sales rep who hide their earnings in their earnings in the charges. Take a look at the illustration the Santander sales rep gave you and you will see commission in there.

IFAs will earn out of the advice they give. Thats the job and they are paid for it. Your amount should be done on agreed fee basis. It will be cheaper.

However, not seeing an IFA and going to a sales rep at a bank is not the answer. Unlike the IFA, the sales rep will have sales targets, sales incentives and bonuses.

Trouble is I can see both sides of the argument, :>(

There is no argument. IFA trounces the tied sales rep every time. Some of the banks have started to lower their charges but they are issuing low quality budget options in their place.

abloke36

I must admit that if interest rates were not so low and if they were back at the historical average then I would just stick the money in fixed bonds with a guaranteed return. Not used to dealing with money. It stresses me out thinking about it.
Feels glum when I should be celebrating my financial position.

bendix

abloke36 wrote: »

I must admit that if interest rates were not so low and if they were back at the historical average then I would just stick the money in fixed bonds with a guaranteed return. Not used to dealing with money. It stresses me out thinking about it.
Feels glum when I should be celebrating my financial position.

Yeah, our heart bleeds for you.

jeez . . to have your problems . .

abloke36

bendix wrote: »

Yeah, our heart bleeds for you.

jeez . . to have your problems . .

Jeez yes sure having just buried my parents after spending two years caring for them. Then sorting out probate and clearing the house then everything has been stress free and so much fun.