Some investment advice please

Bean_Counter

Hi,

I have been doing some research as to where to invest some money but am totally confused as to what type of investment and where to invest but would really appreciate some advice based on my specific circumstances as follows.

I am 49 and mortgage free. Not really looking to retire much before state retirement age of 67. I have £30,000 lump sum to invest and £500 per month. This is over and above an emergency savings fund. I have an occupational stake holder pension currently with Aviva and can pay more into this if necessary. I am fairly risk adverse. I am looking to save for the longer term such as retirement. I do NOT want to be an active investor (other than say an annual review of performance.)

Really appreciate any advice - thanks in advance.

DrSyn

1, What about paying more into your pension or starting a SIPP?

2. First watch both of these:-

http://www.kroijer.com/

https://www.ifa.com/indexfundsthemovie/

Then consider investing in a low cost Global Multi Asset Fund. They have wide diversification while minimising risk, at low cost.

Global Multi-Asset Funds:
Vanguard Life Strategy
HSBC Global Strategy
L&G Multi Index Funds
Blackrock Consensus
Architas Passive

You chose the risk level or share/bond split you are comfortable with, pay them the money & they do the rest.

https://www.vanguardinvestor.co.uk/investing-explained/what-are-lifestrategy-funds?intcmpgn=lifestrategyfunds_learnmore_link

With this fund you chose the share/bond split at the start. They then re-balance to maintain your chosen split.You have to except the market risk that goes with that split.


https://www.hsbc.co.uk/investments/isas/hsbc-global-strategy-portfolios/

With this fund you chose the risk level you want (say balanced) at the start. They then re-balance the fund to maintain it at that risk level. This is called "Risk Targeted" fund.


3. Another possibility might be:- Vanguard Target Retirement Fund:

A better name might be “ Special Year Fund”. You just chose your year and pay them your money.

https://www.youtube.com/watch?v=Sr-IFxRGT88

https://www.vanguard.co.uk/adviser/adv/investments/about-funds/target-retirement-funds

Albermarle

I have an occupational stake holder pension currently with Aviva and can pay more into this if necessary.

If you are investing for retirement then a pension is a better bet due to the tax relief . Even better if you are a higher rate taxpayer .

I am fairly risk adverse.

That is fine, so are most people, although if you invest long term in mainstream diversified low cost investments ( as suggested in the previous post ) the risk is minimised and being too risk averse is actually a risk in itself .( like leaving your money languishing in low interest savings accounts )
Yes stock markets are volatile and sometimes drop a lot in a short period, but over the long term they normally are a good bet .

eskbanker

Albermarle wrote: »

Bean_Counter wrote: »

I am fairly risk adverse.

That is fine, so are most people....

Just to be really pedantic, nobody is risk adverse, but many are risk-averse!

https://www.quora.com/Diction-and-Word-Usage-Are-the-phrases-risk-averse-and-risk-adverse-equally-correct-grammatically

Agree about the pensions though....

Bean_Counter

eskbanker wrote: »

Just to be really pedantic, nobody is risk adverse, but many are risk-averse!

Apologies for the typo.

With regard to the tax relief, I have no other capital gains so based my level of investment and pension level, I am unlikely to have an income tax or CGT exposure whether ISA, investment or pension, I think.

bowlhead99

Bean_Counter wrote: »

Apologies for the typo.

With regard to the tax relief, I have no other capital gains so based my level of investment and pension level, I am unlikely to have an income tax or CGT exposure whether ISA, investment or pension, I think.

Although you are probably thinking you wouldn't pay tax on a small amount of dividend income or gains on the invested amount... in this case the reference to 'tax relief' relates to the relief on the income tax you usually pay on your employment income. If you contribute more of your net pay to a pension scheme instead of keeping the earnings to spend or invest outside a pension, you will get income tax relief, meaning that instead of having (e.g.) £80 to save or invest, the pension provider will gross it back up to £100 for basic tax relief inside the pension.

It will then grow protected from taxes until you draw it out once you get to later life, just like it would in an ISA. When you draw it out in later life, you'll have to pay income tax on whatever the £100 has grown into (because you are avoiding tax now), but a portion of it is allowed to be taken tax free, so overall, you win - compared to investing in an ISA or unwrapped.

As you're unable to access investments while i they're in a pension (until your late 50s), you could consider investing some of the money in a pension and some in an ISA. The ISA is unlikely to be as lucrative overall as using a pension, but it is convenient and doesn't really cost any more money to use ISA investments than non-ISA investments. Comparing ISA to using no tax wrapper at all: even if you don't have enough money to expect to pay tax on the investing profits you make, it's nice and convenient if you do it in an ISA where there is definitely no tax to pay at all. So that you don't have to keep detailed tax records just to prove that there's no tax to pay on the profit you made.