100K to invest, need monthly income

snowball3

I have £100k to invest but I need a monthly income from it to live on. I was thinking about splitting up into high interest accounts that give monthly interest and withdrawing the interest every month.

Would this be the best thing to do or are there any other way.

Thanks

jamesd

How long do you need the income for? It it's a year or three that's not too bad an idea but it won't get you much more than inflation, so if you take all of the interest as income it'll gradually fall in real purchasing power terms.

If it's for many years you should be looking to investments (unit trusts, OEICs and such) rather than savings accounts, since those can be expected to deliver in excess of 12% before inflation and fees, enough for say 5-6% income, plus inflation allowance.

Please say a bit more about your circumstances, whether it's for retirement income, what other income you have, your tax bracket.

snowball3

It is for retirement income,there for long term. I think I will be in the 20% tax bracket. If I chose investments would I be able to get a monthly income from them?

Aegis

snowball3 wrote: »

It is for retirement income,there for long term. I think I will be in the 20% tax bracket. If I chose investments would I be able to get a monthly income from them?

There are certainly investments with which you can get a monthly income. Quite whether you'll be able to live on the income from £100k is another matter entirely... Do you have other savings or plans to supplement your income? Do you own your home, or are you having to pay rent/mortgage?

Sorry for the personal questions, but I think they might be extremely important.

snowball3

i have my own home with no mortgage. I will hopefully have a full state pension, and 2 other small pensions. Put together they will not be enough each month to live on there for I need some extra income.

I need to work out how much I actually need for bills etc which I will do this weekend.

I got stung by Abbey this year, taking their advice I put £40k in to a plan that they recomended, it produced £100 interest in the first year. When I complained they sent a hamper to me and said basically tough. They Knew it was only going to be short term ie 3 yrs. I am a bit worried about trusting any one now.

jem16

Steer clear of banks and see an investment specialist IFA.

Aegis

jem16 wrote: »

Steer clear of banks and see an investment specialist IFA.

Seconded. If this is going to form a major part of your retirement fund, don't listen to people on the net, go see someone whose job it is to work with investments independently of the various companies that will push their product of the month rather than what the client needs.

dunstonh

You are talking about 100k and despite your posts there isnt enough to go on to even get close to suggesting what could be best.

I will hopefully have a full state pension,

Hopefully? Is that a full basic state pension or basic plus SERPS & S2P? It takes about 3 days to find out. So, dont rely on hopefully. FIND OUT.

How old are you? Are these plans for the far future, near future, now?

You cannot just make a post with a couple of lines on such an important issue like this and expect us to give you answers. There are too many variables.

You sought advice from a bank before. You should never do that. They are tied reps to an insurance company and dont have the ability to give best advice and are generally lower qualified and/or lower experienced than IFAs. That said, you dont just want any IFA. The term IFA covers a wide range of skills so there is no point seeing an IFA that deals mostly in mortgages for example. You need an investment specialist. So, when you find yourself an IFA, question them on what they specialise in. Question them on what investment strategies they use, ask to see research and proof. If they can explain it so you can understand it, then that is a good sign. If your questions are brushed aside or quickly moved on then start asking yourself why. Learn a bit about what you are doing and why.

Shinds

If you just want the easiest and safest option - Stick it in a High Interest Savings account.

With something like the new B&B e-Saver - You will see around £400 interest per month (after 20% tax) with £100,000 in savings!

Now that's not bad at all

dunstonh

If you just want the easiest and safest option .....
Now that's not bad at all

With respect, it could be.

If the money is to provide an income for the rest of his life then in 10 years time, it's spending power will be worth about 70% of its current value at about £70,000. In 20 years time it will be worth around £49000.

The income will be worth £280pm in 10 years and about £196 in 20 years.

It would be a guarantee of losing money in real terms and reducing your income over time. It would be like having a stockmarket crash every 10 years in real terms with no hope for recovery.

passion8

jem16 wrote: »

Steer clear of banks and see an investment specialist IFA.

jem16 - can I just ask a quick question please?

We're in a similar quandry, but with an expected higher sum, and my husband made a couple of appointments about seeking advice from IFAs.

dunstanh kindly explained about CAR to me, and NMA was mentioned in the same thread. If an IFA doesn't know what a NMA is, should they be disregarded IYO?

One appointment has been made with an IFA that has a DIP (Decision in Principle I think, but not sure what that means exactly?) In your opinion again, are they worth seeing? Or what initials should a good IFA investment specialist have after his/her name?

Thank you in advance.