No idea what to do with £300K!

ds1980

Obviously, I intend to spread the risk as much as possible and have even considered other possibilities like buying a classic car! We already have a lot of mediocre paintings (£50 - £2000 each) that we inherited, so feel we have enough works of art.

Our IFA, whom we have known for a long time, is the best in our part of the country as far as we are aware.

Sell your "mediocre" art....you don't need to actually own art, wine or anything else like that to invest in it.

If he was/is the best you wouldn't be on here would you?

Best of luck with it all but sounds like you don't need any advice to me and you've got it all sussed out anyway. Don't pay someone else have fun doing it yourself and save yourself a bucket.

Loughton_Monkey

kidmugsy wrote: »

P.S. Some of the sages here urge the importance of planning out future expenditure, which sounds pretty wise to me. But I am stumped by what to enter for our medical/care outgoings. There's every chance that the entry should be "nil" but also every chance that it would be a dominant sum in our calculations, while being very hard to estimate. I scratch my head.

I understand the difficulty.

To plan deliberately for residential care would be rather drastic methinks. Personally, although hoping it never happens, I tend to consider it as a totally different ballgame.

Should either of us be in the position of requiring substantial care, then I would personally consider that the cost of my expensive car, and 2 months holiday abroad every year would tend to cover it. For the last survivor, it would mean physically moving into an expensive home - and the house itself would have to pay in the last resort.

jamesd

You can plan for the cost of care. This is an area where income drawdown has very substantial advantages.

You can start by taking the maximum permitted income using income drawdown and moving unspent money into ISA investments until you have a large pot of tax advantaged money available. Don't draw just the income needed, work out what's sustainable and spend that, but take out as much as you're allowed to build up the pot.

Once you know that you need full time residential care your life expectancy is also likely to be impaired and that would greatly reduce the cost of any annuity purchased within a pension, with the idea of using the income to pay care home fees. I don't know whether there are annuities that can be purchased with pension money specifically for this purpose but general impaired life annuities may be good enough.

dunstonh

Statistically, the chances of care being required are very low. Yet it is something that people worry about disproportionately. With the capital amount involved here, there really shouldnt be a concern. You have savings and investments for that rainy day and there are options and means that can be utilised to help at the time if you do find the odds are against you.

ds1980

My plan will be to spend all my money by then so that the state can pay

MrandMrsB

Hi ds1980, (not sure whether this is the way to address you, since I have not used a forum before!)

You are right of course, I wouldn't be on here if I trusted our IFA! The truth is that even though he's in his 50's, he looks like he's about to kick the bucket, poor chap, so I wonder if he's mentally fit to give us advice. Sounds like I'm being callous perhaps, but I don't want to lose too much money. In the past I have relied on opportunities that come my way (leave it to fate), and dare I say it, "using my female intuition", that our IFA does not have (being male)!

Out of interest, over 50 years ago my husband had a distant female relative who lived off the money she made by "playing the stock market". The friend who has left us a legacy knew she had enough to live on very comfortably for her whole life, so she told her accountant look after her money and never thought about it.

Considering the IFA was supposed to be doing a financial review, I was concerned that he ignored any questions that would not benefit him, and he was horrified when I mentioned that I would consider buying a house if house prices fall a lot! On the other hand my husband's friend's pension is doing very nicely in such a fund. There is another local firm of IFAs who managed to lose most of their clients' money recently, but our chap reviews the funds regularly so I suppose he can't go far wrong. Those kinds of horror stories do make me very wary though.

Thanks so much

dunstonh

There is another local firm of IFAs who managed to lose most of their clients' money recently

Would that be because the stockmarket fell? Did it go back up again in the growth period that followed? You would expect everyone to be back in surplus now unless they are drawing a regular withdrawal.

Losing money in the short term is to be expected on investments. Just as getting very good returns in a short term period which happens to be only growth doesnt mean the adviser is doing well. You will get both periods.

I would also think it is highly unlikely that happened as well. People have different risk views and IFAs use investments to cater for all risk types. The lower risk people would have lost less in the credit crunch/recession than the higher risk people (although the strong growth that has followed would have seen higher risk portfolios perform better overall on this occasion).

Those kinds of horror stories do make me very wary though.

IFAs account for under 2% of complaints at the FOS. These sorts of stories are actually quite rare. Most of the time it is a lack of understanding. Tied agents, bank sales reps and tied FAs are often the cause as well. One of the things you frequently hear is people say one investment they did was better than a previous one (or vice versa). Yet what actually happened was on was invested during a market crash/correction and the other wasnt. I have even heard people say a really low quality investment was better than a higher quality one because of that whereas had they stuck with it, the one that they thought was bad would have been better.

If you use an adviser you need to be able to communicate your concerns and have discussions on issues. Just because an investment goes down, does not make it bad. Just because it goes up, does not make it good.

jem16

MrandMrsB wrote: »

We saw a financial advisor this week who thought we should invest the ISAs (c£60K plus our investment ISA allowances for this year) in some kind of investment wrapper

Can we just clarify - are you asking the IFA to advise on the £60k plus ISA allowance, i.e. approx £80k or are you asking the IFA to advise on the whole £300k.

This would make a big difference on how much he is taking annually as 1% of £80k is £800 but 1% of £300k is £3000.

gallygirl

Lovely story for anyone reading who is in a similar position to you were in 20 years ago - well done to both of you :j. I hope to be in a similar position to you in 5 years time. TBH, I intend to sell our BTL's, take a lump sum from Mr GG's pension & not worry about anything more complicated than whether to tie up in savings for 3 or 5 years. Having been pro-risk so far I intend to kick back and stop worrying about house prices, BTL's and share prices.

Until I get bored of course!

Good luck with what you decide.

kidmugsy

dunstonh wrote: »

Statistically, the chances of care being required are very low. Yet it is something that people worry about disproportionately. With the capital amount involved here, there really shouldnt be a concern. You have savings and investments for that rainy day and there are options and means that can be utilised to help at the time if you do find the odds are against you.

The obvious solution to an event of great importance but low probability is insurance. But I gather that few (or no?) companies offer insurance against care costs because the public ain't interested in buying it. If anyone can point me to companies that do offer it I'd be grateful.