Help in investing 60k medium term

philo_2

Please could someone advise.

I Have no experience of investing at all.

Have recently sold my house and have 60k to invest / save.

Possibly looking to buy another property in around 5 years time (am renting at the moment).

Obviously I want to make best use of this money over the next few years but got no idea where to put it.

Things that bother me are issues of maximising interest, minimising tax, being sensible with risk and getting my head arround the pros and cons of financial institutions.

Any advise would be greatly appreciated.

Philo.

U've_been_framed

Check out the Motley Fool site www.fool.co.uk
To avoid tax put as much as you can into an ISA. Have your spouse open one too.
An index tracker fund may be the sort of thing that you are looking for.

Aegis

philo wrote: »

Please could someone advise.

I Have no experience of investing at all.

Have recently sold my house and have 60k to invest / save.

Possibly looking to buy another property in around 5 years time (am renting at the moment).

Obviously I want to make best use of this money over the next few years but got no idea where to put it.

Things that bother me are issues of maximising interest, minimising tax, being sensible with risk and getting my head arround the pros and cons of financial institutions.

Any advise would be greatly appreciated.

Philo.

If you haven't already got some emergency savings, now's the time to build some up. You could use your cash ISA allowance of £3k this year as a starting point (with an additional £3600 next year, I believe). This amount should be whatever you feel is enough to cover all your outgoings for 3-6 months in the event of an unforeseen problem. Exactly how much you decide on is your choice, and you can store the first £3k in the ISA for now, and the remainder in a high interest savings account like ICICI or Sainsburys (check for the best available before going there).

Anything left after making your emergency pot can then be used for investing if you wish, though 5 years is usually considered the minimum threshold for an investment term. As such, you might want to consider splitting your remaining capital between investment products and something like National Savings Certificates/Premium Bonds (both tax free, the latter worth it for higher-rate taxpayers, but not that great in my view).

For the actual investments, you have the leftover ISA allowance (£4k this year if you use the £3k cash allowance and anything out of the £7200 that you don't use for cash next year). You can also invest outside the ISA, but any dividends will be subject to further income tax if you are a higher rate taxpayer, and any capital gains realised will be taxable. If you transfer those funds into your ISA as much as you can each year, you can mitigate those factors.

As for what your investments are, you have to decide on your risk profile before anything else, as that determines what sectors you are likely to want to look into, and with what percentage allocation.

All in all, investing is quite an in-depth process!

mrbadexample

More spam.........

Aegis

mrbadexample wrote: »

More spam.........

Indeed. I'd report it, but I'm borrowing my girlfriend's computer and it's not configured to handle mailto: links...