How to use £50,000?

Mr_Morgan

Hello

Several months ago, I came into possession of approximately £50,000. Approximately half of this money is currently in a cash ISA earning a derisory about of interest, but I wonder about saving or investing the remainder, or perhaps all, of the sum for the long term towards eventual retirement.

I recently turned 50 years of age.

Can anyone suggest how best to save/invest this sum?

Thanks

Mr Morgan.

AnotherJoe

Do you have a pension ?
Are you a high rate taxpayer?

JohnRo

One option is p2p lending via one of the various companies offering opportunities to fund bridging loans. Typically 10-12% pa returns paid monthly. The catch is that the money is invested at much higher risk.

The risk can be mitigated by spreading your money between several
loans and also more importantly by limiting the total amount you expose to that level of risk.

As a crude example, for illustration, your £50K in a cash ISA earning 1% pa will return near enough £500 pa tax free.

An equivalent return from an investment in p2p bridging loans would only require approx. £5K @ 10% pa to achieve the same return, although that result is complicated by your tax situation. The trade off is, of course, that your £5K is exposed to greater risk of a reduced return should any of the loans default.

So rather than piling the whole £50K into p2p it leaves you the option of sticking with the £5K limit, 10% of the pot, and then looking at similar strategies applied elsewhere to diversify your exposure to specific investment risks.

The others to consider are collective equity, bond and property investment vehicles.

They come with their own set of risks that you need to be aware of and also accept that investment in stock markets exposes your capital to fluctuations in value which can at times test your resolve if you're not fully aware of or accepting the volatile nature of your chosen investment and associated risks to capital and return.

Mr_Morgan

I have little pension savings and have been working part-time over the last few years whilst completing a PhD. This latter issue is now practically finished.

Stevie_Palimo

I'd go on a round the world jolly up and party hard, Seriously I would be looking at the future with a small pension here as you can make 50.000 go a bit of way to making your lifestyle easier.

AnotherJoe

Mr_Morgan wrote: »

I have little pension savings and have been working part-time over the last few years whilst completing a PhD. This latter issue is now practically finished.

Someone clever enough to get a PhD should be able to understand that investment decisions can't be taken in isolation.

Without knowing your circumstances in terms of savings, earnings, plans for retirement, the length of time you wish to invest this money for, what you'll do with it after then (buy a house, spend it on day to day living, etc?) and so on, advice or opinions on what to do with the money, will likely miss the mark.