Lump Sum investment

GTSport

I've recently inherited £60k and am considering investing it a pension plan. As a high rate tax payer I want to do this to get the tax relief on top of my initial investment. I've only around 10 yrs to retirement and want to take absolute minimum risk with this lump sum so I've been thinking about Cash/Index Link/Bond type funds. What do you advise?

Cautious_Investor_3

GTSport wrote: »

I've recently inherited £60k and am considering investing it a pension plan. As a high rate tax payer I want to do this to get the tax relief on top of my initial investment. I've only around 10 yrs to retirement and want to take absolute minimum risk with this lump sum so I've been thinking about Cash/Index Link/Bond type funds. What do you advise?

Hi

How do you define 'minimum risk'?

Do you want zero risk to your capital i.e. it can never go down? Or are you prepared to see some fluctuation in its value?

There are other risks too of course e.g. the risk of your investment not keeping pace with inflation but do I assume correctly in that you are talking about capital risk?

The Cautious Investor

dunstonh

want to take absolute minimum risk with this lump sum

There is no such thing. Everything has risk.

Investments will have investment risk but if you stick to cash based deposits then you are replacing investment risk with shortfall risk and inflation risk.

Going 100% into any one asset class carries extra risk as well.

Loughton_Monkey

GTSport wrote: »

I've recently inherited £60k and am considering investing it a pension plan. As a high rate tax payer I want to do this to get the tax relief on top of my initial investment. I've only around 10 yrs to retirement and want to take absolute minimum risk with this lump sum so I've been thinking about Cash/Index Link/Bond type funds. What do you advise?

Remember that higher rate tax relief can only apply up to the amount you pay. So you may find investing some this tax year, and the balance next tax year, more efficient.

Cash funds tend to go down physically (after charges) and therefore are not even inflation proof. Go for the more cautious funds on offer if you want, and you should get a small amount of growth. Personally, I would consider 10 years long enough to put at least a proportion in equity-based funds, but that's entirely your decision.