Investment of savings

Boohbah

I hope to be 100k better of as a result of selling my home and moving into a mobile home.
Part of the interest I would like to draw of on a monthly basis for living expenses.

So I have a couple of questions I hope someone can help me with.

1) Would it be better put the whole amount into ICICI, or may be into 2 or 3 building societies.

2) I will be liable to pay tax on the interest, so how much can I expect to draw each month.

I'm 62 and single, and working part time.

dunstonh

Are savings account the best thing for you? If you get 4% net of tax in interest, that is £4000 a year. In 10 years time, that your £100k will be worth around £70,000 in real terms and your interest £2800 because of inflation.

If you are in receipt of pension credit, you will lose that because of this saving/investment. If your income at age 65 is going to be more than £20,100 (including interest) you will also see the age allowance reduced.

So, are savings accounts the right thing for you?
What are you plans with this money long term?

Boohbah

Thank you for replying dunstonh.

No, I am not in receipt of pension credit as my income wont allow it, at the moment.
<are savings accounts the right thing for you?>
I don't know the answer to that dunstonh, I just thought they were a safe bet. Is there a better option?

<What are you plans with this money long term?>
No long term plan's as such, I just need to use some of the interest to live on.
When I'm gone, all my estate will go to my daughter.

dunstonh

I don't know the answer to that dunstonh, I just thought they were a safe bet. Is there a better option?

With your answer that you plan to use some of the interest to live on, then its not a safe bet. Sure, your value wont drop on the statement but inflation will be eating into that and at age 62 you have a good number of years left yet and you need that money working for you still.

So you are stuck between inflation risk on savings accounts and investment risk on investments.

Paul_Herring

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Boohbah

<So you are stuck between inflation risk on savings accounts and investment risk on investments.>

What would you advise dunstonh.

Did I read some-ware on here that Bond's are not regarded as savings and as such I could get pension credit.
Or is that wishful thinking.

dunstonh

investment bonds, if invested a long while before applying for pension credit should be fine as long as you dont go and tell them you did it to get pension credit. In which case, they would include them.

I cant really advise you on the actual investment or content because I dont know enough about you and giving advice on the forums on regulated areas isnt allowed. However, you should investigate investment options and learn a bit more about investment risk. Many think its an a choice between of two levels of risk; none and some. This is incorrect and there is a whole sliding scale of risk and sometimes it isnt always obvious.

Seeing as you are 62 and likely to be around for many years to come, you should be considering investment options for part of the money to help keep up with inflation and provide a growing income in retirement. Something a savings account cannot do.

Boohbah

Thanks for all your help and advice dunstonh.