£18k to invest - what's the best

eldbs

My dad lives abroad and is leaving his current teaching job which he has had for 21 years to go into full time development work with my mother.

As he is leaving his job, he is being given his pension as a lump sum (probably a good thing as it has only earnt £500 interest in the past 10 years as it was linked to the stock exchange). He has asked me for ideas about where to best to invest it. I've told him about the good rates from Halifax and A&L that are around at the moment, but I was wondering if there was anything better that anyone knew about. At the moment the money is in his account earning 4.9%.

He doesn't pay tax in this country as he is out of the country for more than 9 months a year.

Any help or advice much appreciated as I don't know where else to start.

Thanks

Benj :-)

blinko

one of the best savings accounts is alliance and leicester at 5.35%, i would recommend using up your ISA allowance although im not sure what your long term plans are ??!! but it would be a good idea to use it.

alternatively you can invest in the stockmarket and potentially gain higher returns but at the same time this involves a higher risk

so here it is
no risk - savings account low returns
higher risk - stockmarket high returns

eldbs

Thanks Blinko,

The ISA option is not really an advantage for my dad as he doesn't pay tax in the UK anyway.

I guess the stock market option is there, which higher risk & higher gain like you say. I just wondered what other options there were out there.

lipidicman

eldbs wrote:

The ISA option is not really an advantage for my dad as he doesn't pay tax in the UK anyway.

You might get a better rate on an ISA than in a savings account - ie First Direct. Also use the drip feed methods for the regular savers and the A&L saver for the bulk of the money.

Also using the ISA makes sense as he migh have to pay tax one day, and hopefully the ISA money can stay locked away from the tax man (at least until 2010 and hopefully beyond). If you dont use it, you LOSE IT!