120K to invest, what would you do?

pennine

Got 120K in taxable savings doing pretty much zilch at present as expected, also have SAS isas maxed.
Maxed out on cash Isas and premium bonds but would like to know what you would do in my position being a 40% taxpayer?

jimjames

Pension?

Fund portfolio to move into ISAs each year?

pennine

Thanks Jim
Have a company pension and have maxed out my AVCs without having to buy an annuity to date.

jimjames

If you buy funds that are not generating income then you'll be able to use your CGT allowance (if they make a profit) to get them into ISAs at £15k a year or £30k as a couple so it will take a few years.

If you need cash for emergency then current accounts are the best payers at the moment.

bigadaj

Agree with Jim, but you'll have to pay additional tax on the unwrapped dividends or distribution from the funds, not a problem just something you'd need to do to ensure hmrc don't catch up with you. I know Jim said non income generating funds but most do to some extent.

There's also no reason why you can't have more pension provision, attractive for a higher rate tax payer. Gives you more flexibility if your current pension is defined benefit, and getting the government to pay in 4£ in every £10 is beneficial. Even if it means drawing down the current savings to an extent.

Archi_Bald

pennine wrote: »

Thanks Jim
Have a company pension and have maxed out my AVCs without having to buy an annuity to date.

Sorry if that's a silly Q but who would force you to buy an annuity if you put more money into your pensions provisions? Are you saying your company pensions/AVS scheme would force you into making an annuity commitment if you paid any more into it?

RickyC_IFSWP

Depends on when you'd need the money etc.

Assuming there's no real need for it, maxing out your pension allowances would be the next best option, but care should be taken not to exceed the lifetime allowance with your DB pension.

You can consider Investment funds account as jimjames mentioned, or alternatively offshore investments for the gross roll-up benefit or even Enterprise Investment Schemes.

Your_Hero

As Ricky points out, you could pay more into your pension, ensure it is within the annual allowance of £40k.

Alternatively, you sound as if you have a fair amount of capacity for loss, and possibly an experienced investor, so you could look into EISs. They have very compelling tax advantages, 30% income tax reducer, CGT free after 3 years, BPR after 2 for IHT, etc etc.

Totton

£40k into Premium Bonds, earning nothing but chance of a win and not much worse than those savings accounts. Fund a few high interest current accounts and keep the rest into either savings accounts or opt for something like a generalist Investment Trust on the safer side of things, eg. Personal Assets, Ruffer or perhaps RIT.

lozzy1965

As above, high interest current accounts, premium bonds. Also, I'd start a SIPP (with all the warnings above about maxing out contributions) and I much prefer individual shares to funds if you are talking large amounts of money eventually - which I assume you will be. So that's what I'D do