Selling House to use money as savings/investment

Sunnygal_2

We have sold our house and moved into a smaller place we own, mainly due to ill health. Once finances are sorted out we will end up with 100K. We initially thought about renting our house out but couldn't face it - repairs, bad tenants, large gardens etc.
We are in our early 50's and would like advice as to what we should do with this money rather than 'fritter' it away? Which would be nice!
My husband, for some reason, doesn't trust Financial Advisors in general saying that they are there to earn their Company money.
Any advice would be helpful.
Sunnygal





Comic Sans MS

bridiej

I've moved this in here as it's more relevant to savings & investments

yorkshire_ria

ISAs are the obvious start. Depending on your attitude to risk-cash ISAs are totally safe. If you're prepared to risk your interest for a potentially better return, the new breed of protected FTSE plans (aka Guaranteed equity bonds) protect your capital. Woolwich & Barclays offer good ones.

After that, lots of options. In terms of not trusting Financial Advisers, get a couple of opinions, ask friends for advice on whom they've used, haggle on commission & be clear whether you'll risk your money for potentially better returns. Your banks financial adviser may well be salaried rather than paid on commissionIf you don't want any risk, Egg or ING.

fairenoughclough

1. Buy a boat and go round the world.

2. Dump your partner and spend it on wine and beautiful sexual partners.

3. If there's any left fritter it away on luxuries.

4. When it's all gone, ask your former partner to take you back and look after you for the rest of your life.



:rolleyes:

Sunnygal_2

First of all thankyou to Yorkshire-Ria.
Well Fairenoughclough sounds great - just read it to hubby but he wasn't impressed Sea sickness yer see.;o)
We went to see a guy at the Halifax who would/could only discuss products of theirs. The we went to the Alliance & Leic. we were advised to go for an investment which tied half up for 5 years with the Legal & General, the other half would be in the A & L .
This would give us an income of approx. 420 pounds per month - which would be great also 1500 pounds would be added onto the capital! Capital not guaranteed although classed as low risk.
This just sounds too good to be true and I am the one frightened to commit now!!!
ISA's not mentioned so don't know whether we should bother - help?
We would need, ideally, some sort of income a month.
Please please, help.

ED

Are both of you basic rate tax payers? Others here will no doubt suggest ideas if one of you is a non tax payer, or one of you is a 40% tax payer.

£6,000 could this week (but not afterwards) be put by you two into cash ISAs (up to £3,000 per person per tax year).

Another £6,000 could go into another ISA for each of you in the new tax year starting 6th April. For simpilicity, in reality this could be the same ISA accounts as you each open for the current tax year.

If interested in considering ISAs, perhaps look first at offers with your own bank or building society. Most competitive rates currently offered are around 5.40% (excluding those with headline grabbing 6-month bonus). MSE has a separate thread for ISAs.

Generally, it is wise to entrust no more than £35,000 with any one bank or bdg society, just in case they 'go bust'.

You wrote : "We would need, ideally, some sort of income a month."

One idea is to give yourselves 'permission' to withdraw, monthly or whenever needed, up to an approximate limit from part of your 'nest egg' held in one or more instant access building society accounts. Depending on the tax position of you + husband, if £100,000 was placed in savings accounts earning an average of 5.50% gross, this would generate approx £5,500 per year. Divide that by 12, so you have over £450 per month before deduction of tax (if applicable). Methinks you two will be motivated to progressively move clunks of the nest egg into accounts earning the highest rates!

I'm what is known as 'cautious' with my money. Building Society and bank savings accounts attract me more than investing in shares. I'm wondering if you and your husband are similar in attitude to me, especially in view of vague possibility pre-existing ill health may someday cause a need for swift access to some of the funds?

£1,000 per month could be drip-fed into Derbyshire Bdg Society's monthly saving a/c. You and your husband could each open such a/c, so one year hence the pair of you would have moved £24,000 into an a/c which currently pays 5.85% gross. It's has been 1.10% above Base Rate for ages.

Which building societies and banks do either or you have accounts with?

It may be wise to monitor periodically whether any of these offer 'loyalty' bonds or other high interest savings facilities, as these tend to pay approximately 1% gross higher interest than others. Examples in recent months include up to £5,000 in loyalty products @ 6% gross offered by each of these :

Nationwide Bdg Soc
Coventry BS
Leeds & Holbeck BS

Anyone here know of others, specifically for existing customers of a financial institution, offering 6% or above, without affiliation to external business?

cheerfulcat

Sunnygal wrote:

First of all thankyou to Yorkshire-Ria.
Well Fairenoughclough sounds great - just read it to hubby but he wasn't impressed Sea sickness yer see.;o)
We went to see a guy at the Halifax who would/could only discuss products of theirs. The we went to the Alliance & Leic. we were advised to go for an investment which tied half up for 5 years with the Legal & General, the other half would be in the A & L .
This would give us an income of approx. 420 pounds per month - which would be great also 1500 pounds would be added onto the capital! Capital not guaranteed although classed as low risk.
This just sounds too good to be true and I am the one frightened to commit now!!!
ISA's not mentioned so don't know whether we should bother - help?
We would need, ideally, some sort of income a month.
Please please, help.

Hi, Sunnygal,

*Please* ( for me :-) ) stay away from the L&G product...it's a with profits bond, isn't it? The " income " ( did he tell you it was tax free as well? ) can come out of capital and you are tied in with all sorts of nasty exit fees. The charges are pretty hefty as well.

MBNA and Capital One both offer fixed term savings accounts at 5.45%ish. The interest can be paid monthly to another account. This means that your capital is safely tucked away where you can't get at it, but it is providing an income similar to that offered by the bank employee. Depending on how much income you need, and whether you will require protection of the capital, you could take half of the interest as income and either save the other half or, for better results, invest it in the stock market. Bear in mind that if you consume all of the income, your capital will be eaten away by inflation over time.

If you don't need the whole sum to provide an income, and if you are willing to take some risk, you could consider putting a portion of it into a lower risk stock market investment. But if you are uncomfortable with the thought of losing money, stick with cash.

There are those ( I'm one of them ) who think that the trend in interest rates is upwards. If you think like that, you might like to hold off choosing a fixed term, fixed rate account right now. OTOH, there are those who think that the next change will be downwards...it's up to you.

HTH

Cheerfulcat