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advice please

I have been told I could get some good advice here so heres hoping!
I am 65 my husband 67 we are both still working earning approx £15,000 year between us. We receive state pension £7,000 year between us and a private pension of £4,000 per year. I cashed in some ISAs due to such low interest and put into premium bonds (living in hope) so total savings of £20,000.
We are thinking of moving down market to raise money to retire on. House value about 360,000 thought we would buy about 260,000 . If we do this where would be the best type of place to invest the 100,000?
I hope I don't sound a complete idiot.
Thanks
Anna

Comments

  • You don't sound like an idiot at all. You must do your research. I would say depending on where you live. If you bought a flat or something for £100k and rented it out that would give you additional steady income just ensure you buy somewhere that is always going to rent.

    To be honest I have very little experence of this. I just think it is alot simplier to understand oppose to shares etc.

    Anyway the best of luck,
  • that is not something we had even thought of! Thank you so much for replying. I will have a look around to see what there is available.
    Thank you.
    Anna
  • ermine
    ermine Posts: 757 Forumite
    Part of the Furniture 500 Posts Photogenic
    If you bought a flat or something for £100k and rented it out that would give you additional steady income just ensure you buy somewhere that is always going to rent.
    With all due respect this is advocating investing in a very illiquid investment which comes with a whole world of hurt to keep running - maintenance etc. I know when I am 67 I'm prepared to maintain my own house but doing it on another one... That's not how i want to spend my time. Each to his own I guess. You do have to ask yourself what happens if you suddenly need the money, too.

    The OP wants to ask themselves some of the following questions:

    • What are you looking for from your investment
    • How do you feel about the value of the investment (though not so much the income) varying with the stock market. Before you answer that you want to take no risk you have to be aware that you can get this security but at a price, less income.
    • How do you feel about inflation - remember that kills the value of money
    • Do you have ambitions to leave anything of this capital to your descendants - this makes annuities less attractive
    You have already paid tax on this money (when you earned it) but there are various options you can follow. At one extreme you can buy an annuity, that way you know exactly what you will be getting each year, the downside is that the return is not particularly exciting.

    As a rough rule of thumb you might be able to get a return of about 5% on the £120,000 from stock market investments, ie about £6k p.a. compared to your earnings of £15k p.a., leaving you with a total of about £17k to live on. My ISA returns about this percentage , I have targeted dividend paying stocks, accepting the probability of lower growth.

    However, your capital is at risk there, so at your age many people would advocate less exposure to the stock market.

    You need to understand your view as to taking risk and how you value that in comparison with security of return. The individual pros and cons of ISAs, annuities and pension wrappers I'll leave to people who know more about it, but you need to get a feel of that risk/security balance in your case. I personally would favour taking more risk as this is not your total pension amount. However, that's just me, I get the general feeling I have more risk appetite than many on here.
  • dunstonh
    dunstonh Posts: 120,201 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    I cashed in some ISAs due to such low interest and put into premium bonds (living in hope) so total savings of £20,000.

    That was a bad idea. Premium bonds, if you get average only pay out 1.5%. It is easy to find a cash ISA paying more than that. Yes you may get lucky in the same way buying a lottery ticket may see you will £1 million but the odds are not with you.
    If we do this where would be the best type of place to invest the 100,000?

    What is your objective with that £100k? Growth or income

    As ermine says above, any suggestion at this stage is premature. We dont know what you want, what you need, what is best for you or what you would do. So, give us a bit more info
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • cyclonebri1
    cyclonebri1 Posts: 12,827 Forumite
    I just have to add the profit from your down sizing aka down grading (if you get my drift), is unlikely to be the difference in cost of each home. Once you haved th new place to your (higher) standards the difference may be well less.


    My on life experience advice is;

    Hang on the the high value property untill something gives, higher value keeps track proportionally to interest rate stuff largely.;)
    I like the thanks button, but ,please, an I agree button.

    Will the grammar and spelling police respect I do make grammatical errors, and have carp spelling, no need to remind me.;)

    Always expect the unexpected:eek:and then you won't be dissapointed
  • bigfreddiel
    bigfreddiel Posts: 4,263 Forumite
    JAMES1882 wrote: »
    To be honest I have very little experence of this. I just think it is alot simplier to understand oppose to shares etc.
    Don't you just love it -people offering advice who then add the fact they are totally clueless!!!!! Fantastic!
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