The Windfall Diary

gadgetmind

darkpool wrote: »

You will have about 400k in funds/ managed investment? you do know you will be paying 5 figures EACH year in fees?

It was scary figures like those that set me on the route of learning about portfolio construction and creating my own from low-cost trackers, REITs and the odd ETF/IT/OEIC for certain "themes".

I've still got work to do, but have already saved myself £3k in fees per annum, and that will continue year after year for (hopefully!) several decades.

atush

WindfallWinnie wrote: »

And now for more financial matters... Becoming 3rd party signatory (if thats what it's called?) on bank accounts for my two elderly relatives.

Bless them. The youngest broke her hip just before Christmas & it made her realise how dependent she was on her car. The elder is 92, more 'with-it' than her 81-yr old niece & just wants a bit of back-up should anything happen to her. Have dug out some ID-type documents & keeping fingers crossed.

I also act as 'financial advisor' to them now that they are both widowed. Neither of them is particularly interested & I'm sure they'd both shove it all under the mattress if they could. They both saved for a 'rainy day' to the extent that they could now cope easily with a prolonged deluge so this means having several savings accounts/bonds/etc each to stay within the safe savings limit.

I find it a little sad that they didn't do more with their savings when they were younger & a little fitter. But I suppose they have the peace of mind that, should either of them need any sort of long-term care, they would be able to afford it. Still sad, though...

For the long term, a POA might be more useful than 3rd party sig so think about it.

Yes, it is always a difficult balance between saving and living (If unlike most UK persons you are an avid saver). But I have always made sure to keep pulling out the odd treat along with savings. Not very MSE, but then again life needs living too.

WindfallWinnie

darkpool wrote: »

You will have about 400k in funds/ managed investment? you do know you will be paying 5 figures EACH year in fees?

Thanks for your comments. Unfortunately, I don't feel like I have the expertise to manage the investments myself. I keep abreast of financial products via MSE & financial press but have no idea when it comes to stocks & shares.

WindfallWinnie

atush wrote: »

For the long term, a POA might be more useful than 3rd party sig so think about it.

Thanks atush. We have POA for one of them. They both bank with Lloyds TSB & I've been 3rd party signatory for another relative who banked with them and always found them very accommodating.

Have also set up internet banking for them both so that I can move money from savings a/cs to current a/cs. That's not something I ever thought would happen cos they've always shied away from anything to do with t'interweb! Moving with the times at last...

alun4

Just come across this very interesting thread. I have a similar situation. But different in these ways:

I am self employed (aged 58, married with 2 children 19 and 17). My wife works part time for me and the business pays for our vehicles (plush vans). My wife has a differed pension (which she could take now) but better she works for me! I do not earn very much (net) £10,000 + pa plus £3000 net from French ski property + Flats over Shop scheme produces a non taxable repayment to me (think of it in this sense as a rental income) of £7000. No mortgages or debt and do not need extra income at the present. I imagine I will retire (so everything will change) in 2-3 years and the business does not have much value but the premises could be converted to a couple of residential units. (I have the Freehold). I enjoy my work most of the time!

Not quite as much money as OP ( £310,000 but with no mortgage not far away from the same as OP) My inner feeling is that I would like a "last project" rather than a pension plan as I have done self builds in the past - carrying blocks up ladders gets you back into shape better than a diet (really the way we made the money through the years) but would not wish to move from present home until we need to downsize or have help looking after it. (I guess I think that a pension will die with me and though I do not want my children to have unearned cash now I want them to have it later. When we retire we will need about £45,000 pa to stay the same. I know that increases the substantial IHT risk but I just don't think they should have money at this stage of their lives. (sorry, I meant they should appreciate it by working hard for it!)

We are very lucky. We have worked hard so I don't spend easily! I am trying to change myself a bit! An IFA has called and is preparing a strategy but will be hampered by me wanting to keep things liquid "just in case" an opportunity arises. Money has currently stayed within the estate of my relative as I had put her money into 5 year Building Society bonds just before her death with 4.8% gross interest which can now be cashed or allowed to run.

Any thoughts?

WindfallWinnie

alun4 wrote: »

I imagine I will retire (so everything will change) in 2-3 years ... My inner feeling is that I would like a "last project" rather than a pension plan as I have done self builds in the past

We've also done self-build in the past. I can't imagine hubby being content with retirement and I think having a project like property development/self-build will give him an interest. So, as far as timescale is concerned you won't need to dip into capital for 2-3yrs.

alun4 wrote: »

I guess I think that a pension will die with me and though I do not want my children to have unearned cash now I want them to have it later.

Your pension needn't die with you; you can ensure that it passes to your wife or dependent children, if they are still dependents. It works for us because of the age gap...
Your will (you have made a will?) can stipulate at what age your children inherit. My daughter is a beneficiary of her grandparents' wills & she can't inherit till she's 25.

alun4 wrote: »

When we retire we will need about £45,000 pa to stay the same. I know that increases the substantial IHT risk but I just don't think they should have money at this stage of their lives.

Again, there is no reason why your estate should be liable for IHT if you get your will drawn up correctly.

I'm sure more experienced people than me will be able to comment further.

Good luck with your plans!

atush

We too did a self build- we converted an old barn. As first time buyers, with twins in nappies lol. IT was a bit of a nightmare to be told and I did most of it (went to site meetings with them asleep strapped in their car seats).

I could see me doing it again, but hub will sit it out again I am sure lol. he just finances me ;-)

darkpool

WindfallWinnie wrote: »

Thanks for your comments. Unfortunately, I don't feel like I have the expertise to manage the investments myself. I keep abreast of financial products via MSE & financial press but have no idea when it comes to stocks & shares.

yeah, i think for most people it is a large "leap of faith" to manage your own money. how about investing some of your money yourself? say 30k?

I'd invest 3k into 10 different FTSE 350 companies. tbh, after 10 years I would be surprised if your portfolio hadn't outperformed your IFAs recommendations.

westy23

Make a lump sum contribution into hubby's pension: £40,000
= credit to the pension of £50,000 (20% tax relief at source), plus a further 20% additional HR relief either as adjustment to tax code, reduction in further tax due or tax rebate. Net effect: £50,000 invested in pension has cost £30,000.
Can someone explain how the above works please.

atush

You get tax releif on all contribs. The figures above I don't think are quite correct though but are in the ballpark. For each 8K you put in HMRC will put in 2K right into your pension. Then you can claim 2K back on your taxes via your tax code being adjusted?