Need help investing / saving £450,000

fionasmith14

Hello,

I was hoping to get some advice as savings / investments is not my strong point.

I am due to receive £450,000 inheritance as cash and would like advice on where to put it. My mortgage is paid off already but I do have a 4 year old child and I'm training to be a teacher so need some of it for living costs for next couple years. I would like to keep at least £50,000 in an easy access account but the rest I am able to put into longer term savings. I understand that due to the £85,000 safe savings cap I will need to save / invest in a number of institutions so your help would be very much appreciated.

This money is for mine and my daughters future so I am not keen on taking any risks with it. Especially as I am very new to this.

Thank you

Jason_Bourne_2

fionasmith14 wrote: »

Hello,


I am due to receive £450,000 inheritance as cash and would like advice on where to put it.

I will PM you with my sort code and account number

fionasmith14

Haha, okay it should be with you in 2hrs :T

droopsnoot

There's going to be some element of risk involved, however you choose to save or invest the money. I am sure someone will be along to expand on that, but basically you either spread it around cash accounts to ensure that it's protected (the £85k limit thing) and then lose spending power against inflation because of the currently-awful interest rates, or you put it into investments of some kind or another (as opposed to cash savings) and run the risk of losing capital value at least in the short term. Either way there is a risk, though keeping it in cash accounts at the moment means there is a definite loss of value against inflation.

As you don't have an immediate need for it, spread it around in the first instance to get it protected, then at least you have time to look in more detail at the other ways you can make it work.

Wilkins

To begin with, distribute the money over a variety of FSCS protected savings accounts --there's a lot of information on the main MSE website. You already seem to have a clue about this.


Then consult an IFA (not your bank) about the long term disposition of the money. S/he will almost certainly recommend a variety of investments, some of which will have higher risk profiles, since otherwise you will not get good long term returns.


People on here can give you some general ideas, but with that amount of money, and not being already well versed in investment, you will need specific tailored advice based on a professional consultation.

fionasmith14

Thanks Droopsnoot. Much appreciated and makes sense. Do you think I will have a problem opening up that number of accounts at once. Will it start to flag something up on my credit file?

fionasmith14

Thank you Wilkins! I will start preparing to have it spread out and find an IFA. If anyone can recommend someone in the central Bedfordshire / North Herts area I would be very grateful.

Also, any advice on which accounts to share it around would be amazing!

Daniel54

fionasmith14 wrote: »

Thank you Wilkins! I will start preparing to have it spread out and find an IFA. If anyone can recommend someone in the central Bedfordshire / North Herts area I would be very grateful.

Also, any advice on which accounts to share it around would be amazing!

Look also at NS&I. As they are government owned they have an unlimited government guarantee (so no protection cap)

ChopperST

fionasmith14 wrote: »

Thanks Droopsnoot. Much appreciated and makes sense. Do you think I will have a problem opening up that number of accounts at once. Will it start to flag something up on my credit file?

Inheritance can be so bitter sweet but it sounds like you have the right attitude with the tremendous gift you have been given.

I wouldn't worry about your credit file too much if you have £450k in the bank IMHO.

You say you don't have a very high risk attitude but if you leave the money in the bank for your daughter's future inflation will erode it away gradually overtime which is your biggest risk at present.

I would echo everyone elses thoughts on an independant FA - look at unbiased.co.uk as a starting point. You can sit down with them and spell it out that your risk profile is low. Over the long term there are investments that are virtually (not completely) guaranteed to beat inflation and cash savings.

Vortigern

You probably need to seek professional financial advice. The sum involved is too much to try and distribute around numerous savings accounts.

Go to http://www.unbiased.co.uk/ and get a free initial consultation with two or more independent financial advisers. Then choose the one you like best. Don't use the banks, or tied advisers.

Meanwhile check out those current accounts paying more interest that savings accounts: Santander 123, Lloyds Vantage (and TSB, BoS equivalents), Nationwide Flexdirect, Yorkshire/Clydesdale. You can have multiple accounts with most of these, the details are in other threads nearby.

Fill your ISAs for this year before April, then fill next years on April 6th. Is your daughter eligible for a Junior ISA?

When you start work consider paying into pensions for yourself and your daughter.

As regards your credit file, each bank will do a search to verify your name and address, but as you're not asking for credit there should be no adverse effect on your credit file.

doughnutmachine

fionasmith14 wrote: »

Hello,

I was hoping to get some advice as savings / investments is not my strong point.

I am due to receive £450,000 inheritance as cash and would like advice on where to put it. My mortgage is paid off already but I do have a 4 year old child and I'm training to be a teacher so need some of it for living costs for next couple years. I would like to keep at least £50,000 in an easy access account but the rest I am able to put into longer term savings. I understand that due to the £85,000 safe savings cap I will need to save / invest in a number of institutions so your help would be very much appreciated.

This money is for mine and my daughters future so I am not keen on taking any risks with it. Especially as I am very new to this.

Thank you

£450k should yield a fairly secure 4% a year from the UK stock market. I'd imagine you could survive on £18k a year if your mortgage has been paid off?


If I was you I'd open a share account with someone like LLoyds and invest the £450k into twenty different blue chip shares.


Every year you should max out your share ISA and when you are earning max out your pensions.


You should go to the library and get some books on investment. I think having a sizeable portfolio means you should at least know the basics of investing ie keeping cash means you lose purchasing power due to inflation....