Savings / Investments - High Tax Band Earner

doggsyuk

I have 25 thousand pounds to invest and would like some advise on the best way for me to do this.

I have just gone over the earning threshold into the high tax band. This obviously has an impact on the best way for me to invest / save my money.

Any advise would be greatly appreciated.

Chrismaths

ISAs, ISAs, then ISAs. That's the tax wrapper sorted.

As to what to invest in - help us narrow it down a bit. what do you want your money to do for you?

StevieJ

After you have used up your ISA allowance (either side of April6th), if you mean save rather than invest (stock market) you may wish to consider NS&I
inflation adjusted savings certificates they are tax free so offer a very good
deal for HR tax payers.


http://www.nsandi.com/products/ilsc/index.jsp

http://www.nsandi.com/products/ilsc/rates.jsp

These certificates are for 3 or 5 year periods although you can cash them in after 12 months and still receive a good return.

doggsyuk

Thank you for the information, all my cash isa's are full for this year.

I cant say I am a high risk taker so whatever investment opportunity is advised that would have to be taken into account.

I don't need access to these funds within the next 2-3 years so medium term investments / savings are possible.

I have not written off shares altogether espically if you can still earn a reasonable return but limit the loss on original equity invested.

dunstonh

I cant say I am a high risk taker so whatever investment opportunity is advised that would have to be taken into account.

Risk is not just two levels "no risk" and "high risk". Its a whole sliding scale and nothing is risk free.

I don't need access to these funds within the next 2-3 years so medium term investments / savings are possible.

medium term is typically the period 5-10 years.

I have not written off shares altogether espically if you can still earn a reasonable return but limit the loss on original equity invested.

It comes back to that sliding scale of risk and dont assume all unit trusts invest in the stockmarket.

jamesd

doggsyuk, take a look at the property funds that invest in real commercial property (not equities of property companies), corporate bonds and UK equity income funds for a fairly cautious mixture. Add in a global growth fund or fund of funds for some more risk and a chance at greater returns. That set will use the four funds at a thousand per fund that you can easily do in the current tax year from someone like Hargreaves Lansdown. H-L have recommended funds in each of those sectors, though their recommendations don't include external global growth fund of funds so looking outside their recommendations there looks like a good idea to me.

With an even split across these sectors you're fairly unlikely to see a drop of as much as 20%, and that would take the two equity funds falling by 40%, which isn't very common - but can happen. Average year on year growth in the 7-9% range is reasonably likely.

The problem with your timescale is that you don't have long enough for the value to recover fully if there is a big market fall just after you invest. That's where your risk comes in - you can get the money back, but it might not happen before you run out of time and are forced by your other plans to take the loss.