Where to invest £50k

redstev

Hi

I'm after some advise please. I have £50k to invest.

I already have a ISA which I fill every year.
I would like to invest the £50k for my retirement. I am 40 years old and have no pension.

Answers on a postcard please !!!!

Many Thanks.

cheekymonkeb0y

myself and wife are in a similar position, so will be interested to see what we should do with ours after we fill up each of our ISA allowances.

redstev

Ive filled up my cash isa and am debating doing a stocks and shares ISA too.

Not getting much feedback on this question though !!!!!

opinions4u

See an IFA.

Pension is a highly likely outcome. Tax relief for starters.

www.unbiased.co.uk

Ciaran124_2

Hi there redstav!

Maybe ou should just put the rest in a good saving account yes, I know that you are going to get taxed on your money but as the next tax year start just open another isa and transfer the money into it.

What about if you have close family, e.g wife or husband ask them to open an isa and put £5340 into there account also to aviod tax on the interest. Other than that just save in a saving account and later move into an isa.

Ader1

redstev wrote: »

Hi

I'm after some advise please. I have £50k to invest.

I already have a ISA which I fill every year.
I would like to invest the £50k for my retirement. I am 40 years old and have no pension.

Answers on a postcard please !!!!

Many Thanks.

Do you have any debts...mortgage etc?

gadgetmind

You haven't given anything like enough info. Are you married? Which tax bracket are you in? At what age would you like to retire?

redstev

Hi sorry

I,m seprated father of 2 £15k mortagage and no other debt.. I,m 40 I earn £18k per year and expect to retire at 68.

Cheers

gadgetmind

Your three big choices are probably index linked savings certificates with the NS&I for max £15k of it (it would be £60k if you were married!), an ISA (cash, stocks and shares, or both), and a pension.

The way the pension could work is quite good fun. You can put up to 100% of your taxable income into a pension each year, so the £50k could be split into three and paid in over three years. The tax man assumes you have paid tax and it all and pays another 25% in for you, which turns the £50k into £62.5k. This will then grow over 28 years to about £166k in today's terms, which could pay you an annuity of about £9k a year that would rise with inflation.

Have a play here - http://www.hl.co.uk/pensions/interactive-calculators/pension-calculator - I didn't put in any ongoing contributions but I did tweak down the annual management charge under Advanced Options, and I did remove the 50% spouse option from the annuity. I also put the whole £62.5k in on day one as that calculator isn't very flexible. If you could afford to put just £75 gross in per month (only £60 less in your pay packet) then things look even rosier.

However, pensions are taxed (though even with state pension you won't get taxed on much of it as you can also take out 25% tax free at age 55 and upwards) so you might consider an ISA instead. Over 28 years, a stocks and shares one might be best and you can afford a fair old exposure to equities IMO. There is no tax boost on the way in, and it will take five years to "ISA up" all £50k, but everything you take out is tax free as is all growth and interest.

Of course, you can "pick and mix".

gadgetmind

BTW, I haven't had my coffee yet today, so please check my figures!