what's the best way to tie up £170,000 for 15 years

kidmugsy

There's no such thing as zero risk. The best he can do is try to achieve low and diversified risks.

For instance, he could put £30k into Premium Bonds. He'd risk losing against inflation but would be getting a bit more than 1% p.a. in tax-free prize money. They're guaranteed by The Treasury.

He could invest £50k at the savings plan of Personal Assets Trust, an investment trust dedicated to protecting capital as a higher priority than growing it. He could bung another £50k into Ruffer Investment Company, another one devoted to protecting capital, but effecting its policy somewhat differently from P.A.T. (£50k because that's the investment protection limit for stocks and shares, so he'd better buy the Ruffer at a different platform from the Halifax platform that P.A.T. uses.)

Then he could put the rest into Index-Linked Gilts, or if he feels he's already got enough money under the care of HMG, he could buy an ETF that invests in TIPS, the American equivalent of ILGs. Or he could open an S&S ISA for £11520, hold the ILGs tax-free there, and hold the TIPS ETF outside a tax shelter.

Four or five investments shouldn't be too hard to keep an eye on, and yet there's a useful amount of diversification there. If the ITs rise much above £50k he can sell a bit and invest the money in more ILGs in an ISA each year.

Totton

Zero risk? I think that inflation risks threaten the future of savings as Govt's use your money to pay off their debts by devaluing the currency. For me you have to accept some risk if you want to preserve your capital, hence I would buy a basket of Investment Trusts or OEICS, opting for the more cash preservation types but accept that there is a risk. Then when you have just 3 to 5 years before you want the money, move into cash savings.

DigForVictory

If you can step away from zero risk, may I suggest share nominations in assorted stallions at stud? It is definitely not a high street option, and you would be very well advised to take bloodstock advice, but it's almost as much fun as owning a racehorse. Not many investments allow you to feed gem a carrot every now & again, let alone recreate themselves year after year & the racing industry is big, varied & active.

alanq

Is Father aware that by taking the income himself this sum will remain part of his estate for inheritance tax purposes (See gifts with reservation of benefit)?