Best way to invest 140k?

Jake'sGran

EdInvestor wrote:

Instead of wasting money with this rubbish, what Mum needs is a selection of better funds, purchased directly and in her ISA through a discount broker such as https://www.h-l.co.uk - which rebates the charges.

That way she pays lower charges and no tax,unlike what would happen using the bond.

But in this tax year and next the total she can have invested in ISAs is £14000. Not much of a dint in £140,000. Otherwise I agree that it needs to be spread around. There are some good acconts paying monthly interest e.g. Icesave. The rate for this is the same as annual interest i.e. 5.7% but if Mum does not use the Internet it will not be convenient for her. Coventry Bldg Soc have some good account for over 60s with which she could have a cash card. I would have at least half of it in a spread of funds and if she fancies income funds the income can be paid to her current account - see Invesco Perpetual High Income and Jupiter. Don't take advice from the bank. You can sort it out for her and learn a lot whilst doing it.

Jake'sGran

robledouk wrote:

Hi, my mother didn't pay tax as she did not work (my father was fortunate to have a well paid job) . The only income that she has just started receiving is a widows pension paying approx 5250 per annum which is taxed.


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Just wondered why your Mum is paying tax on £5250. Is she under 65 yrs?

jem16

robledouk wrote:

Thanks very much for all your replies. We are seeing a Investment specialist IFA soon to get some unbiased advice as we are clueless on how to invest this.

I was widowed 4 years ago and had a similar lump sum. For the first 3 years, I put the amount in high interest savings accounts, premium bonds, cash ISAs and Index Linked Savings certificates. However the interest pushed me into the higher rate tax band and meant I lost out even more.

Last year I decided to do something about it and sought the advice of an IFA. I was very risk averse and didn't want to lose any of my money and hadn't a clue about investing. It was the best thing I have ever done.

My investment is now up approx 14% on average even after charges. I have absolutely no doubt that I would not have managed anywhere near this if I'd gone DIY. I will shortly be adding my premium bonds and index linked certificate to this investment as I feel more confident now.

The DIY route will certainly be good for those who want to spend the time and effort in researching. However if you manage to find a good adviser he can be be worth his weight in gold. Far better to achieve 14% including charges than 7% to avoid them.

EdInvestor

Hello jem

What funds are you actually invested in within the bond?

jem16

Now why would you want to know what funds I'm invested in?

EdInvestor

Because it is the funds that are providing the 14% return, not the bond.As dunstonh is always saying, it's not the pension that has or hasn't performed - it's the investments within it.A bond (or ISA,or pension) is only a wrapper.It has nothing to do with the performance of your investment.

jem16

I'm very well aware that it's the funds within the bond that are performing - I have manged to learn that much by being here.;)

I did not post to recommend a bond - in fact I never even mentioned a bond. My investment contains the bond, ISAs and a pension.

I posted to say that for me, the IFA route was far more profitable than DIY as I would never have managed to pick suitable funds without a lot of time and effort.

jamesd

jem16, it's interesting to see how various portfolios of investments are put together.

EdInvestor

I would never have managed to pick suitable funds without a lot of time and effort.

Perhaps you'd like to pass on the benefit of your advisor's fund picking skills to others.

StevieJ

jem16 wrote:

The DIY route will certainly be good for those who want to spend the time and effort in researching. However if you manage to find a good adviser he can be be worth his weight in gold. Far better to achieve 14% including charges than 7% to avoid them.

Just to add a sense of perspective if you had stuck all your money in a UK tracker (i.e. no research) you would now be 14.66% up Feb2006 -Feb 2007.
Don't get me wrong I agree with you about a good advisor, he can add defensive qualities to your portfolio.

http://www.h-l.co.uk/fund_research/fund_performance/sedol/0387532.hl