£1,000,000 investment

investa

Just over a year ago, as I turned 60, I was a very fortunate to be a Premium Bond jackpot winner. I left the money with NS&I at 0.9% (taxable) thinking that I would come up with scheme to at least match inflation and keep the money safe. After I had done some research I kept on reading that the market would see a correction or crash. This, combined with a lack of investing knowledge, kept me from investing in the stock market or seeking advice from an IFA. A year later, I still have the money but in real terms I have lost many thousands of pounds through inflation.
What I would like to do is just match inflation with a very high degree of safety. I will slowly spend the money but I also have two children (no longer at home) who will need a lot of help in purchasing a property each within the next five to eight years.
My part time job and pension provide my wife and I with a modest but adequate income.
I am really looking for realistic advice on how I can avoid inflationary losses with such a large sum. I am assuming inflation is at least 3%.
Any advice would be appreciated, thanks.

Zero_Sum

Inflation currently is just over 2%
You can get 5 year fixes for 2.5% if your after safety & match inflation

Rheumatoid

You probably need to seek professional advice but it is unlikely you will be able to achieve your objectives without some degree of risk.

investa

On £1,000,000 ?
Also, from my perspective, inflation is more than 2.5% and will probably increase over the next 5 years. But thanks for replying .

Zero_Sum

There you go. 2.6% on deposits upto £1m


https://www.securetrustbank.com/personal-savings-accounts/our-bonds/5-year-fixed-rate-bond

And its the ONS who say inflation is under 2.5%
No one knows which way it goes in the future however the BoE target is 2%

Alexland

Regardless of the exact value of inflation it is unlikely over the medium term you will get quite enough returns from cash products to maintain your spending power.

Getting an inflation level of return (after fees) from investments would require an asset allocation that would expose you to around 25% loss potential in adverse market conditions.

Other options might include helping your children with first time buyer incentives such as a Lifetime ISA if suitable. You may also consider wrapping the money into ISA and pensions for tax efficiency.

Alex

Zero_Sum

Personally if I was 61 with £1m in the bank (having already got house & workplace pension) i wouldnt be quibbling over 0.25% here & there. I'd be enjoying my unexpected windfall travelling the world as you wont have that long left to enjoy it so no point being stashed in bank/investments

investa

Spending it and helping my children is my objective but I am not financially sophisticated enough to even match inflation. I blame the Bank of England and that Mark Carney, isn't he going soon ?

xylophone

I also have two children (no longer at home) who will need a lot of help in purchasing a property each within the next five to eight years.

Do they each have a LISA?

If not, why not encourage each of them to open one so that you can contribute the maximum amount to each over the next 5-8 years?

https://www.moneysavingexpert.com/savings/lifetime-isas/

Would you wish to make additional gifts to your children in the hope of PETS?

What I would like to do is just match inflation with a very high degree of safety.

Wouldn't we all!



Index linked Savings Certificates are no longer on general sale and even when they were, the amount you could put in was limited.

CPI was 1.8% at the last announcement while RPI was 2.4%.

Savings rates here

https://www.thisismoney.co.uk/money/article-1583859/Best-savings-rates-General-savings-Internet-branch.html

Except in NS&I you would wish to have regard to the FSCS protection limit.

You could consider taking advice specific to your situation from an Independent Financial Adviser.

https://adviserbook.co.uk/ You would tick "confirmed independent" when the menu comes up plus such other specialisms as required.

2010

Two children not at home who will need help with property.

Get on with it, at least you`ll see where half your million is going while your still alive.

Live seven years after you buy their homes and tax wont come into it.

Stick the rest in the bank and LIVE.

bostonerimus

Just put the money into a 5 year fixed rate savings bond ladder. That will keep up with inflation. 5 years rates are around 2.5% so you can take 25k out each year and still maintain your capital.