First time have money

cupofcoffee_2

For the very 1st time in my life I have money to save/invest (200k). I am four years off retiring and not up to too much risk. What would you do guys?

innovate

Your very first step should be to distribute your money across financial institutions so it's protected. You have £85K per person in FSCS protection. Read Martin's article on the main site.

Try to find half-decent interest payers - put the max for this year (£5,640) into a good cash ISA and the rest into 2 or 3 instant savings accounts, until you have decided what to do longer term.

Others will no doubt come along soon and make some further suggestions - I am too tired for today for more ideas, lol.

Whatever happens - don't let anyone in any bank or building society let you sell something (they call it "give advice") without checking back here. They have a very limited portfolio, and basically just their own, not your, interest at heart.

atush

Pay off debt, max out ISAs (both cash and S&S) pay off mtg, top up pensions, save the rest?

Hard to say really, and you give no info on your situation, incl debt/mtg/dependants etc.

CLAPTON

you need to say a lot about your general financial situation
-debts
-property
-dependants
-pensions
-age
-retirement plans

opinions4u

See an IFA.

Utilising pension tax breaks and future tax allowances could work well for you.

cupofcoffee_2

Thanks everyone -really useful,

This is the situation:
No debts, own house -no mortgage. 1 kid just finished uni, 1 still to go, no private pension. Age 61.

Any advice gratefully received

atush

Well for a start, setting aside some to help secodn thru uni and starting up a personal pension might be good. DO you have a spouse/partern to go along with those kids?

Certainly the tax relief involved in a pension, and you could even immdiatley 'vest' or take the pension could a very good idea.

What rate of tax do you pay?

I would certainly invest some of it (thru a pension or S&S Isas) as you could very well live anther 2-3 decades so leaving it all in cash would leave you open to inflation eating away your funds and making zero growth.

cupofcoffee_2

No spouse / partner and on lower rate tax. I will put some cash in an easy access (like the PO 3.17% ) for the kid still to go to uni. How do I go about investing in a pension? And wouldn't know where to start with S&S Isas - I would probably pick the wrong one.

atush

An IFA would be a start if you feel you can't (or don't want to) learn to invest DIY. There are DIY platforms for both ISAs and pensions online.

ISAs and pensions are basically the same thing with different rules- they are tax wrappers. You can effectily hold much the same sorts of investments in either. They differ in how they are affected by tax on the way in (pensions get a BRtax boost from HMRC) and on the way out (Isas are tax free, and pensions you get 25% tax free and the rest as income which is taxed at whatever rate you pay at the time (which could be 0).

I would say you want to have both. and if you are working and still paying tax now, fill this years ISAs.

innovate

cupofcoffee, as a priority, stash your money away safely (cash ISA, £85K, high interest instant access savings account etc), so it earns a bit of interest and is largely protected from inflation. Don't got anywhere near "investments", IFAs and bank advisors for a bit yet.

Get down to reading a few things, like

1. passive investing on monevator.com
   .
   
2. Monkey with a Pin (free e-book download, or audio book)
   .
3. Tim Hales' "Smarter Investing"

Take your time digesting things - - none of it is rocket science but if you have never been exposed to it, you'll need a few weeks, or even months, to get your mind round it. Time invested in this will stand you in good stead later. Come back here to discuss your ideas, ask questions etc.

Even if you end up going to an IFA, knowing the basics yourself will be invaluable. At a minimum, having read through above, you will be in a lot better position assessing whether the IFA proposal is what you are comfortable with. But you might find that you don't need (to pay) an IFA at all, and can handle your affairs yourself.

Oh, and again: never listen to a bank's "financial advisor", for reasons given in my earlier reply.

cupofcoffee_2

thanks everyone - I think I need to do some reading and in the meantime will spread the money in some savings accounts. I feel I need to "lock it away" to stop it being "frittered away". so perhaps put 50k in a 2 or 3 year fixed term.