best way to invest a large sum of money..

saverjustice

If you husband is over 55 and has no pension provision whatsoever he can put a lump sum in one and take an income immediately, an Immediate Vesting Plan they used to be called.

This is how it works:

He can put £10,000 in and take 25% tax free cash plus an annuity (interest) and he claims 40% tax relief, net cost £3,500.

£10k in, £2.5k out plus £4k tax relief, the £7.5k in the pension obtains a regular income by way of an annuity for life, I dunno what the rates would be because that depends on all sorts of factors, the provider, the guaranteed period, the spouse's pension and of course in some cases his health. Let's pretend it is 4% which would provide £300 per annum.

BUT, thanks to a very generous tax man at HMRC the cost of this annuity is only £3.5k so in effect you are doubling the annuity (interest) rate to 8% or more.

I am a bit rusty so I may have my facts wrong but that is what I used to do for my clients who paid 40% tax, back then annuity rates were over 10%, times change? Their accountants used to struggle with this concept, too easy they said.

That is why you may need an IFA, or just pick our brains on here!!

Rollinghome

There's only one person you can trust to put your financial best interests first and that's yourself. That's why the best way is to handle your financial affairs is yourself if possible. If not then you may have to use an IFA.

Martin Lewis has a useful article here: http://www.moneysavingexpert.com/savings/how-to-pay-for-financial-advice#charm . It makes the useful point that unless you at least know something then you risk being taken to the cleaners, especially if the adviser is tempted by commission.

So the more you know the better. Don't be hurried and treat it in the same way as you would any very expensive purchase. If you use an IFA then get competitive quotes. A book such as Be Your Own Financial Adviser: (Financial Times Series) is just a few pounds and an easy read. It also helps you decide when it would be cost effective to get advice.

frosty

A big thankyou to everyone for the great advice,:).
I am going to take my time and plan very carefully how to invest.
:A:A

Demarco

Hi,
This amount of money, I'd be consulting an independent financial advisor. The questions which lisyloo listed will be really useful to have in mind when you go to see them.

evenasus

I manage our savings, which is more than three times the amount the OP is asking for help with.

I would hate to have to pay someone else a fee, to manage our money.

Reaper

evenasus wrote: »

I manage our savings, which is more than three times the amount the OP is asking for help with.

I would hate to have to pay someone else a fee, to manage our money.

I do my own too and would encourage others to as well, but it is far better that those that don't want to do the work involved in learning about investments go to an IFA rather than stick it all in premium bonds.

My investments include AIM stocks, VCTs and even some CDOs. Somebody wanting to do similar from a starting point of knowing nothing about investments would have to be prepared to put a lot of effort in to make sure they considered all the options.

dunstonh

evenasus wrote: »

I manage our savings, which is more than three times the amount the OP is asking for help with.

I would hate to have to pay someone else a fee, to manage our money.

There is little point paying someone to manage savings. Most people should be able to handle savings easily.

However, when it comes to planning and strategy and investments, its a different matter. The level of planning and strategy depends on the capability of the individual to do it themselves. The more money you have the more there are things you can do to maximise efficiency.