Just inherited £100k......

barginunter

Also have £140k in ISA's fixed accounts, easy access accounts etc. Don't want huge risk as retirement looms in 2-3 years. I know I should probably seek ind fin advice but I just wondered if anyone had any ideas as to how I can get a good return. Is it worth buying property these days?

atush

If all your ISAs are in cash, you need equity exposure. You may find Cash has no risk, but it does- inflation risk that even with fixed rates you will at best preserve capital and see no real income or growth.

Do you have a pension? a mtg? Other debt?

Pay off all debt (incl mtg in your case as you are so close to returement so need to lower your outgoings).

Invest some into your pension, you can invest up to 50K in any one year. Given you get tax relief on top, it is worth it even if you retire in a few years. Doubly so if you are a HRTaxpayer. If you ahve got one, open one.

Then I would be looking at equtiy income funds, or a range of high dividend paying individual shares (but his last carries more risk) for at least half of your inheritance.

POPPYOSCAR

barginunter wrote: »

Also have £140k in ISA's fixed accounts, easy access accounts etc. Don't want huge risk as retirement looms in 2-3 years. I know I should probably seek ind fin advice but I just wondered if anyone had any ideas as to how I can get a good return. Is it worth buying property these days?

I think it is.

People will always need somewhere to live. I would get something easy to rent out to give you an income in retirement.(That is what we have done)

innovate

You won't get an awful lot of property in the UK for £100k, and probably a lot more hassle than it's worth for the potential rental income.

You don't say whether you already have good pension provisions - assuming you could do with some extra income (who doesn't), I might look into a SIPP if I were you. The benefits of a SIPP includes that you get a nice lot of tax relief - - but there are limits as to how much you can contribute each year, and therefore how much tax relief you get. You can get free information from the pension advisory service - worth exploring your options with them before deciding whether you want to involve an IFA.

Until you know what to do with your money, put it in a good interest payer, making sure you don't have more than £85K in any single financial group.

atush

I agree that property could be a good idea. But not for 100% of your inheritance. But there are pitfalls from void periods to bad tenants/vandalism etc.

Frm what I can see you have only cash investments. If you add property that is 2 types. but over the last 100 years, equities have done better than gold, property and Cash. And has done the best in outpacing inflation.

POPPYOSCAR

innovate wrote: »

You won't get an awful lot of property in the UK for £100k, and probably a lot more hassle than it's worth for the potential rental income.

You don't say whether you already have good pension provisions - assuming you could do with some extra income (who doesn't), I might look into a SIPP if I were you. The benefits of a SIPP includes that you get a nice lot of tax relief - - but there are limits as to how much you can contribute each year, and therefore how much tax relief you get. You can get free information from the pension advisory service - worth exploring your options with them before deciding whether you want to involve an IFA.

Until you know what to do with your money, put it in a good interest payer, making sure you don't have more than £85K in any single financial group.

Have you had a lot of problems then?

CLAPTON

you're about 60
you can expect to live say 30 more years
think about inflation over the last 30 years
what was the cost of living in 1982, the price of a house, the cost of petrol,electricity etc.
if you keep all your money in cash then it will lose purchasing power over the next 30 years

will property may be a reasonable financial return (depending upon where you live) do you want the hassle of renting out property?

xylophone

I think innovate is right about not being able to buy a great deal for £100,000 - even if you could, it is not just a matter of buying a property and watching the money come rolling in! Landlords have a number of legal responsibilities and costs - you'd have to think carefully about whether you want to spend your retirement dealing with problems with ballcocks and recalcitrant tenants!:)

Paying off your mortgage might be a sound plan (provided that you can do so without financial penalty and are paying more in interest than you can earn after tax).

If you will have secure pension income of £20000+ it might be worth looking into flexible drawdown in a SIPP. http://www.hl.co.uk/pensions/income-drawdown/what-is-flexible-drawdown

If you have not used your stocks and shares ISA allowance for this year you might consider an equity income fund or distribution fund - you might find the Cavendish or Hargreaves Lansdown site worth a read?

In the meantime, don't let the money lie idle! http://www.money.co.uk/savings-accounts/instant-access-savings.htm

And don't forget to check your tax position - will additional savings income bring you into the higher rate band? http://www.hmrc.gov.uk/taxon/bank.htm#3

Daniel_Elkington

Consult an IFA, seriously. That is a lot of money to throw away by making mistakes. Even if they get it wrong you can complain and get your money back. If you get it wrong it is your own fault.

Property is a mixed bag. If you fancy running it like a business then it is as good as any business decision.

Say you find a house for £100K and rent it for £600 a month (being very generous)

That is a gross yield of 7.2% a year, fairly good you think?

Well, no, because you have to pay tax, assuming you're a basic rate taxpayer that would reduce the yield to 5.76%.

Then you have void periods, repairs, insurance, letting agent costs if you don't want to collect the rent yourself, bad tenants etc.

You've got plenty of life left in you if you are in good health, so you are investing long-term to create an income, by using your ISA's to create an income base you can have a tax free income, and a good IFA will make that as hassle free as possible.

Tbh you are going to have to take some risk or else you will lose it all to the banks and the inflation they create.

You could use the old investment ISA. If you are married you get 22,560 this year and can top that up every year until the whole lot is in ISA, then you have tax free income!

Lots to consider, but seriously I'd avoid the direct property route.

opinions4u

Just getting the tax relief and future tax thresholds sussed out could be massive here.

Track down an IFA at https://www.unbiased.co.uk.

pqrdef

atush wrote: »

If all your ISAs are in cash, you need equity exposure.

No you don't. 2-3 years before retirement is the time to be thinking about selling shares, not buying them.