Redundancy, inheritance and no mortgage. How to invest?

RoundTheBend

So after a rather bad first half of 2017 I find myself looking to start investing for the future.

I got made redundant and at the same time (within days) my Father died. This means I have just over £100K that I would rather not leave sat in the bank.
I have already payed off the mortgage on the small flat I have and will be turning 50 next year.

I already started a full £20k S&S ISA with HL but I'm a bit stuck on what to do next. I was looking into some tracker funds but after much searching I can't even decide on an online broker (every time I find one I then find people posting reasons not to use them).

Someone also mentioned checking up on my stamp to make sure my gov pension is inline (I have worked pretty much my whole life so it should have enough in it).

So the question is what to do now and who to do it with.

I have thought of just going right into day dealing but that would be very risky with my lack of knowledge so I have decided that I should put most of it in tracker funds with a small amount (~£5k) for trying some stocks and shares trading to see if I can cut it.

I decided I should at get some input first, hence the post.

I would appreciate any advice you guys might have, i.e. have I missed anything, what should I look for in a broker etc.

With the year I've had I'm a bit out of sorts at the moment so I'm mainly just looking to make sure I don't make any big mistakes.

I considered an IFA but I'm not sure how to find a good one locally in Bournemouth. Is it worth having a consult given the above plan? I used one about 20 years ago and they made more money out of me than I did from their advice so I have been a bit sceptical about just picking one from the phone book.

Any advice would be appreciated.

xylophone

State Pension


https://www.gov.uk/check-state-pension

You have other pension provision?

https://www.moneyadviceservice.org.uk/en/articles/choosing-a-financial-adviser

RoundTheBend

Thanks for the links, I'll go through them tonight when I get back (have to pop out for the afternoon now) but they look just what I was trying to find the last few days.
I do have a couple of pensions, both from employers around 10 years in each but obviously would like to increase my retirement fund however that may be.

bostonerimus

Please avoid day trading...

I would invest in tracker funds. If you like H&L do it with them or you could look at Vanguard for ISAs and regular investing accounts. You should also look into your pension options. Having some of the redundancy paid into a workplace pension could be an option or use it to fund a SIPP.

BLB53

With the year I've had I'm a bit out of sorts at the moment so I'm mainly just looking to make sure I don't make any big mistakes.

You may not be in the best frame of mind to make good decisions so I would suggest leave the investing for a few months and in the meantime do a bit more research.

A couple of decent (free) sites to start off would be Monevator http://monevator.com/category/investing/passive-investing-investing/ with lots of good articles around index funds etc. and also DIY Investor http://diyinvestoruk.blogspot.co.uk/p/basics.html

If you decide passive is a good way to go then try to get hold of Hale's 'Smarter Investing' a bit expensive but I got a copy from my local library. Also Edwards 'DIY Simple Investing' is well worth a read.

I honestly would not waste your time/money on stocks & shares trading as only a small percentage make it work...keep things simple, low cost.

If you would be happy with Vanguard funds have a look at their new low cost platform which charges 0.15% per year and no dealing charges for buy/sell funds https://www.vanguardinvestor.co.uk/

Good luck!

kidmugsy

BLB53 wrote: »

You may not be in the best frame of mind to make good decisions so I would suggest leave the investing for a few months and in the meantime do a bit more research.

Well said!


OP: I'm sorry to say so but much as I admire HL as a provider of smallish SIPPs, I think they are a bit pricey for ISAs.

Eco_Miser

Not a good year so far, my commiserations. As said, you may not be in the right frame of mind to make decisions yet.

Monevator have a list of places to invest through, as well as lots of useful information on investing.

There are reasons not to use every broker and platform. You have to look at the reasons given, and see if they apply to your situation. Eg HL are expensive for funds, but quite cheap for shares; Iweb are ridiculously cheap for medium and large holdings, but some people don't like their website.

Don't try trading shares unless and until you really know what you are doing, and how you can beat the paid professionals juggling millions.

RoundTheBend

Thanks for all the advice and condolences. It has been one of those years where nothing seems to be going right.
It has helped me start to aim for something rather than bouncing from one website to another changing my ideas in between each one. It will take a while to go through them all and read the relevant pages and associated links (I will look at the books to brush up longer term as well)

I have checked my gov pension and it seems I have 6 years left of NI for the full amount (~£20 a week more than the current forecast) so I will need to keep an eye on that.

I will avoid any stock trading on my own for now and just look at the funds side of things.

I had read that H&L were a bit more expensive but the overall ratings were so much higher than the other sites I could find (IG etc) that I decided to go with them for the ISA. If I had spent more time on it I may have ended up with another site but I was starting to lose the will to live after hours and hours of trying to untangle all the sites and charges (I wish I had found this site first to ask).

I had also come across the vanguard LifeStrategy fund and had considered parking it all in it, but that was in the middle of all the other advice and options i found around the internet and then I found this site

I also looked at other index funds but most seem to be on a downturn at the moment so I will need to wait to see how long that goes on for and attempt to buy when they have bottomed out (the old guessing game starts). Once in I plan to hold the funds for a few years at least.

I will create a vanguard account for the above (it seem to be one of the ones most sites recommend) while I work out how to split the money up and what else I should put it into. If I can come up with 5 different funds that would mean a split of 20% (£20k) in each. At least these are less risky than trading myself and should give a reasonable investment over time.

atush

I have thought of just going right into day dealing but that would be very risky

My condolences, but this would be madness.

I got made redundant

was this more than 30K? If so thre are tax/pension consequences an strategies here

I already started a full £20k S&S ISA with HL but I'm a bit stuck on what to do next.

So leave it in cash while you research. But one of the vanguard series you mention would be well diversified.

Ypu havent mentioned a private or work pension. This the Obvs place to start. Did you have a work pension? How much did you earn this year?

RoundTheBend

My internet seems to have gone down here at the moment (another reason to avoid day trading if I needed one) so I may be a bit slow on the responses.

My redundancy wasn't more than £30K but I can't say how much it was, in fact I'm not allowed to say anything at all about the terms in it due to ... hmm I can't even finish that sentence.

I was made redundant in March this year so haven't payed much into the pension this year..
The timing was somewhat a mixed blessing as my Dad fell ill on the Friday, I told I was being made redundant the following Tuesday. The gardening leave meant I got to spend time with him during his illness and my father died 6 days after the end of the garden leave period/redundancy date (in March). I have been sorting my Dad's estate since and only just received the house funds this week.

I have two pensions with the companies I worked for in the last 18 years, so I'm looking to use this money to improve my retirement pot.

I also have a very small private pension I started when I was younger but it only has a couple of k in it.
I'm not set on the idea of having the money tied up in my pension. I would like to move house before I retire so may need to access some of the money. Until I'm sure of not needing the money I'd rather avoid putting it in a pension now (also I've already paid tax on it so that removes some of the pension benefit).

I was thinking of using my S&S ISA as my pseudo pension fund and transferring in the max each year from whatever investments I have at the time.

Does that make sense or is that a bad idea?

When I start working again I will put the max in to whatever pension I get with the employer (to get the full tax advantage) but I'm not sure there is a big enough advantage using savings for a pension rather than an investment once they have already been taxed. I'm trying to learn this stuff though so could be wrong on that.

I'm currently leaning towards putting 80% of the money into the vanguardinvestor.co.uk LifeStrategy funds for now (maybe split it 50:50 between a high and low risk fund). the thinking is that once it is in there I can then concentrate on other things in life for the moment and come back to this later when I have had time to work out/learn what I want to do with it (maybe even leaving it as it is). The remaining 20% will be just kept in cash while I sort out what I'm going to do work wise (I'm currently planning on taking some time out for a few months).
The cost of the fund looks cheap but I haven't yet been able to find what charges there are for retrieving the funds if I decide to move some money to elsewhere in 6 or 12 months time. It says it is free to get in and out of the fund but I've yet to find what the charges are for transferring money out (I'm still reading through the website tying to find the relevant charges page).

At least I'm now starting to get a short term (6-12 month) plan together to get the money out of a 0% interest bank account, the longer term investment will take some reading up on once i have a better idea of what I'm doing.
Earlier this week I had no idea at all of what I was going to do so thanks for all the advice so far.

atush

(also I've already paid tax on it so that removes some of the pension benefit).

This isnt true. Taxed income put into a pension gets the tax back. So you could put more into a pension, up to your full earned income less any current pension contributions in the tax year concerned. Once you have used up the carry forward allowance, you could continue to put in 2880 per year, which the govt adds tax relief to make it 3600.