Best Investment for monthly income 30 September 2007 at 11:41AM in Savings & investments 2 replies 834 views

singingauditor

Hi

I'd grateful for some advice.

My wife is currently taking some time off work. While she was in employment she was a high rate tax payer. I am also a high rate tax payer.

We are fortunate to have £450K to invest, which we hope will provide a good monthly income for my wife. £200K of this is from a sale of our house. We cant find another to buy at moment so we will probably rent for 6 months. So part of this money could be needed in 6 months.

I am rather cautiuos individual, and my plan is to put the money in a high interest monthly income account. A quick scan on the interent shows that we could earn 4.80 ish net income.

My wife is likely to be off work for about 2 years. We are both in our early 40's.

couple of questions what is the best investment for me?

would i be better moving all my money into my wife's name fo tax purposes?

I'm i being too cautious??

Grateful for any input, I know there must be better investments.

thanks

jem16

If you are going to invest as opposed to save then you need to be looking at a term of at least 5 years. So you could put the £200k for the house into a high interest savings account and invest the other £250k for income.

With you being a higher rate taxpayer the £200k would be better off in your wife's name only as you will pay less tax on the interest.

The other £250k could be invested and give you an income of around 5% whilst still allowing growth on the capital. How much growth will depend on the level of risk you are willing to take.

You should really see an investment specialist IFA who can portfolio plan to take into account your attitude towards risk as well as any tax liabilities.

singingauditor

thanks for that Jem16.

i am going to see a IFA, probably next week, but just wanted to get some basic suggestions, before I get baffled. I'm sure he/she is going to suggest a diversified portfolio. Which is fair enough, seems to be the universal advise.

Thanks for clearing up the issue about putting part of the money in my wife's name.

I've not really had to worry about investments so far as I had completely offset my mortgage.

I'm not risk adverse but I would like to get around 10% return, anything around 7% doesn't seem worthwhile considering I can get about 5% just in a bank account.

Thanks