what should I do with 60k

tele951

I have 60k to put somewhere,but where.
I thought about putting it in property,is that wise or should I
I put it into a savings account.
I will not need this money for 10 years.It will be there to help me enjoy my retirement.
I have never had this amount of money befor and so I am finding it hard to decide what to do.

jamesd

Where is the 60000 now? In an ISA? If it's in a current account, yes, the first thing to do is put it in an instant access savings account, so you do get higher than current account interest. But that's only the first step while you learn about the other things you can do.

If it isn't in an ISA yet, one possible first step is to put 7000 in a stocks and shares ISA using a mixture of funds matching your investment risk tolerance. Repeat in mid April and that's 14,000 taken care of. If there are two of you, you could each do that and that's 28,000 taken care of.

For 60000 property is probably too high a risk since it's not likely to spread your risk very far. Investment bonds investing in commercial property in an ISA (or outside one) would be lower risk and probably make you comparable amounts of money with less hassle.

Do you have a partner and does your partner have a pension? Do you? Each of you gets your own tax allowance so it's useful to have a pension for each of you so you maximise the amount of tax-free or low tax income you can get. The target income from all pensions, employer, personal, state basic pension and additional state pension (SERPS and S2P) is about 8000-9000 a year per person, since that maximises the tax break of getting tax added when you pay it in but not taken, or taken at 10%, when you take it out.

You should (or both of you should, if that applies) get a State Pension Forecast so that you know what you can expect from the two state pensions. That will give you some idea of what you need from other investments to be comfortable.

Do you have a mortgage? How much, for how long, at what interest rate? It's possible that paying some of that off might be a good idea.

Please say more about your pensions and other retirement income plans, since the idea is to try to put together a combined scheme that makes you as well off as possible. It won't be possible to fully do that without the information from the state pension forecast, but knowing more will be enough to give you some other things to think about.

You have sufficient money there that it is also entirely practical to seek assistance from an IFA who can explain how to use ISAs and other options and could put together a personal plan for you. If you find yourself stuck and just can't decide what to do, that's one very useful approach to take. Also good if you just don't want to learn but want someone to take care of all the details for you.

EdInvestor

If you don't have a home and are paying rent, then that would be the first place to put the money, IMHO.

tele951

thank you for your help.
The 60k is in premium bonds as we did not no what to do with the money(we had a 250 win this month)We do not want to leave the money there.
I have 2k in an ISA.
My partner has retired aged 54 on ill health and is receiving his pension.
Partner did a state pension forcast and he will get the full amount I will not.
We do not have a mortgage that was finished some years ago.
Any advise would be most helpful

tele951

Sorry left this off my last post.
We have a life a assurance with profits maturing in six years time

jamesd

Please say how much income your partner gets from his pension and whether it increases with inflation. Please also say how much you expect to get from the state pensions and any work and private pensions you get. This will give us an idea of whether we need to consider the effect of state benefits on your income or not. It seems unlikely, but it is worth checking.

How many qualifying years do you have for the basic state pension? When you say that you will not get it all, did you allow for the planned change to requiring 30 years for a full payment? That may not apply to you since it depends on when you were born.

It seems likely that putting 7000 for each of you into stocks and shares ISAs each year until all of the money is invested in them is going to be the best way to go. Then the question would behow much risk you will accept, to decide what funds you should buy within the ISAs.

For information, assuming that you are in good health, 60000 used by a woman to buy a level purchased life annuity at age 65 would produce an annual income of 3840 (73 a week), much of which is tax free, perhaps 5-10% tax to pay on it. Purchased life annuities are partly taxable interest and partly untaxed return of the purchase price, so you get a lower efffective tax rate, how much depends on the particular deal.

EdInvestor

Hi tele951

Congrats on the win

So the position is that you two own your home, hubby has a full state pension, plus a works pension (how much?).

You will get a small state pension ( but if you have 30 years conts and retire after 2010, you could now you can now get the full amount, so check that.)How old are you?

Plus there is an endowment (is it?)Post some info on this for us:

Which company?
Guaranteed sum assured
Declared bonuses
Surrender value (ring up and ask)
Monthly premium
Maturity date
Maturity forecast

Then we can have a closer look at the options.

tele951

The endowments end in 5 and 7 years time.Sum assured is £9000 Monthly premium£39and guaranteed value £15,633.
Second enowment sum assured £4400 premium £20 per month guaranteed value£6463.
When I took these out 22 years ago we thought we would get far more than we are going to get.
Partners private pension increases with inflasion He is receiving £7212 a year.

EdInvestor

Hi tele

I'll need the other info to give a view. Please post at your leisure.

wongseefu

wow you guys are doing a great job, are you a financial advisor ? or you in the field? alot of the advice in here seem very useful and professional.

Regards,