Advice on what best to do with my inheritance: investment

krazyk

I should receive my inheritance early next year of about £55-65k and looking for advice.

Out of all the issues I have at the moment, investment is the iffy part for me. I don't know much about investments (stocks, share, funds etc.) so really want to avoid this but this seems to give a better return (depending on the risk you're happy to take). I have been playing around with the nutmeg page and even with a low risk level I get a good return. Their charges are a % but fairly low but they do do all the work for you. I guess a % fee is more an incentive for them to work hard in growing the investment so not too worried about this. Beyond that they don't seem to have any other charges.

Has anyone used nutmeg? Their website is great. Is there a better way to invest £55-65k? Savings seem very weak, at least beyond £20k.

dunstonh

Has anyone used nutmeg?

not many if media reports are correct.

I have been playing around with the nutmeg page and even with a low risk level I get a good return.

You do realise that the return is just an example and not reality?

Their charges are a % but fairly low but they do do all the work for you.

Their charges are not that low for DIY. Broadly comparable to an advice service but without the advice.

If you are going to DIY then there are far better DIY options. If you are willing to pay advice level charge and want advice then go with an IFA. Or alternatively go with a robo-advice service which is what nutmeg is but one that is better value.

ViolaLass

OP, do you have any debts? Own your own house? Any re-training you want to do to get a better job? Got a pension?

jimjames

It doesn't seem to make a lot of sense to use the same pot twice


https://forums.moneysavingexpert.com/discussion/5359102


Decide how much you want to save/invest and then look to take action on that. You can't invest and save the same £55k.


If you're looking to buy a house then investment isn't really an option as it should be considered long term - 5-10 years or so.

Sam_J12

I agree with what jimjames says. Decide what you want to use the money for first, and the time scale you will need it in. That will inform the most suitable places to invest it.

For example, if you want to buy a house in the near future then avoid equities completely and go for a help to buy ISA, regular savings accounts and high interest paying current accounts. In contrast, if you want to invest for retirement then putting most into equities is probably a good idea.

krazyk

dunstonh,

So not many people use them? Is there a known reason for this?

Yes I realise it's an example, I know at least that about investments. :-)

OK, noted IFA suggestion. A robo-advice service? I've tried to search for this to find other services but can't find anything atm. Can you name one other and I'll investigate further.

Thanks for your reply. :-)

krazyk

ViolaLass,

I have debts but as they don't charge me any interest I plan to continue with the repayments as normal.

No, don't own my own house.

No, no retraining needed atm.

Yes, I have a pension with my company who pay equal contributions to me. I'm thinking of upping my monthly contributions but worried they return is very, very low.

My query here is regarding this lump sum, which I would like to invest/save with to put towards buying a house in about 2-3 years. CUrrently savings rates are very low so I'm investigating if there is a better way. I'm 99% sure I'll just be placing it into a savings account or two but I'm researching all possibilities for now. :-)

krazyk

jimjames,

No, I'm not using the pot twice. Have I said that somewhere? If so, apologies that it not the case.

Yes. My current thought it put it into a savings account and use it in 2-3 years to put towards buying a house. But I'm using the time now to research any other possibilities. :-)

krazyk

Sam_J12,

My plan is to use the money in 2-3 years to put towards buying a house. I'm not sure I can use a Help to Buy scheme as I think I won't be classed as a first-time buyer after gaining the inheritance from the sale of my late aunt's house?

So perhaps investment is for something *after* buying a house. I would like to have a little pot left afterwards anyway, so that would work.

dunstonh

So not many people use them? Is there a known reason for this?

Robo-advice is a new thing. There are not many companies offering it. Nutmeg is one of a handful. However, it is expected that more IFAs will have robo-advice style offerings over the next year. Most of the major IFA software suppliers are building or have already built portals which give varying degrees of functionality.

Nutmeg reported a loss of £3.6m in 2013 and a loss of £5.28m in 2014. Yet it only had a turnover of £103,903 in 2013 and £635,381 in 2014.

To put those figures in context, £100k is less than one of my mortgage advisers earns and £635k is similar to the earnings of a single local IFA firm with a handful of advisers.

The media reported that all the robo-advice firms that currently exist have a total assets under management between them which is less than a small local IFA firm.

So, robo-advice is a small but growing area. Gets far more media coverage than it currently deserves. But once it becomes the norm for most IFA firms to have a robo-advice style offering in addition to their conventional offerings then the focus may well go away. Like any new market distribution method, some think it will be the next big thing. Others think it is a fad that will pass. It suits the internet age and will appeal to Ipad owners. It wont appeal to those that prefer a human discussion. There are some issues currently too. The FCA has a number of times reviewed risk profilers and said that the scoring alone should not decide the risk profile. Yet for robo-advice, that risk profile score is what decides it. So, there are a few areas that need development and ironing out.

Can you name one other and I'll investigate further.

I can't. As I am a regulated adviser, I can't go naming companies without falling foul of FCA guidelines. Although there is a poster here who owns one and I am sure he will be about soon and add some generic information (although he is quiet this week - so could be busy or on holiday).

ViolaLass

2-3 years is not a sensible investing timeframe. What if your investments lost 40% in that time?