Help please

benalder284

Agree that you should take your time before investing £100K and agree with earlier recommendation of Tim Hale's book. The main thing I found about his approach was that it makes you think clearly about what it is you are trying to achieve and how much risk and volatility you feel able to take on.

Also agree that diversification is nearly always a good thing and that £100K in corporate bond funds doesn't seem very diversified.

I would be thinking a mixture of cash ISAs, pension contributions and well diversified S&S ISAs as a starting point.

brasso

benalder284 wrote: »

Also agree that diversification is nearly always a good thing and that £100K in corporate bond funds doesn't seem very diversified.

Agreed. On the face of it, it seems like poor advice.

I say "on the face of it" because we don't know all the details.

atush

brasso wrote: »

Not everyone would agree about the pension, or the cash ISA. The pension top-up is great, but there are very strict rules about what you can do with the fund and when, which is the price you pay for getting your tax back on the deposits.

And that's essentially what it is for most people. A tax rebate, rather than a gift. With ISAs you pay tax on your salary and put what's left into an ISA, where the taxman agrees not to tax it again. With a pension, you get the tax back that you've already paid but then you pay tax on it again when you eventually start spending it.

OK, so it aint as simple as that, but just making the point that we shouldn't just tell people to put their money into a pension fund as though it was a totally common sense option, when many people would argue that it isn't.

Pensions, like ISAs are mearly wrappers. If the money is to be invested, then you should use one or the other in most cases to reduce tax paid on salary, gains, or interest. To not do so, at all, is unwise as you would be paying tax you did not have to.

Restrictions on pensions, in how/when you gain access, is a good thing. Not a bad thing. Keeps it safe from creditors, means testing, impulse spending.