What to do with 40K

VXman

Following on from a post in another section where I said I'd just had an endowment policy mature. I am now wondering what to do with it.

I have no debts or mortgage and own a house. Currently working but will retire probably next August.

I have about 100K in accessible savings earning around the 1-2% mark and about 50K in various ETF's. (Wealthify, Vanguard life strategy 60 and 80, HL Select Global and UK Growth.) Not really that knowledgeable on investing so I've spread bits of money in different places.

When I retire I will have another 100K in cash and a pension of about 20K per year.

So I need to keep some savings accessible to enjoy life. (Wife will have pension too)
I want to play reasonably safe but try and get a little more than the 1-2 % savings. Also want to keep money fairly accessible in the short term as we may help our son to buy a flat,

So just wondering what to do with this 40K. Should I just add it to some of the other ETF's or maybe someone could suggest another route to safely investing to get a reasonable return?

AnotherJoe

You could start by putting some of it in your pension because you'll get a near immediate tax lift which, assuming you are 55, you can access straight away or better after you've retired.. You could do the same for your wife.
As an example, you each add £20k to a pension.

That gets bumped up to £25k.
You each retire but do not start taking pensions yet.

You take out your 25% lump sum. £6.25k leaving £18,750.

Now not working, wait until the new tax year then you each take out £12,500, eg the tax allowance, so no tax is paid on that.
The following tax year you take out the rest. Again, no tax to pay.
Result = free £10k.
If you are high rate tax payers, even more.

Albermarle

The above post is good advice to put it into a pension.
If you can just add it to your current pension will depend on what type it is .
In any case it is easy/free to open a new pension(s)
Although you have some money invested outside a pension remember that money in a pension is also normally invested in the financial markets . Although you can keep it as cash with zero interest in some pensions .

xylophone

Following on from a post in another section where I said I'd just had an endowment policy mature. I am now wondering what to do with it.

I've been in Hong Kong for 2 years now and whilst I still hold a Tesco account correspondance goes to my UK address

Let's just say I'm on holiday. I still have an income and a house in the UK.

(By the way I am the original poster. Can't seem to access my other account)

It appears that the OP is now resident (and working) in Hong Kong.

Depending on his exact situation, this may well affect how much he can pay into a UK pension and receive tax relief.

It may well also affect any savings he proposes making in a UK account.

VXman

Sorry, should have said.thought I'd covered everything!! Temporarily in Hong Kong. I'm a teacher so no way of adding to my UK pension and not paying tax in the UK at the moment anyway.

Will return to the UK to retire next summer so just need to do with putting this money somewhere now rather than my current account.

xylophone

Is your son interested in buying very soon?

Had you considered gifting him the money now as a PET?

VXman

Yes considered that but not quite ready to go this route yet.

Rally just want opinions on a reasonably safe investment route which would return a little more than 1-2 percent that savings accounts are giving.

george4064

VXman wrote: »

Yes considered that but not quite ready to go this route yet.

Rally just want opinions on a reasonably safe investment route which would return a little more than 1-2 percent that savings accounts are giving.

You will need to take some risk to achieve more than savings accounts are currently offering. You can't achieve higher returns without taking on more risk, its how risk-return trade off works.

mostwelcome

^ Seconded.

I was going to suggest something that also carries risk.

Albermarle

I want to play reasonably safe but try and get a little more than the 1-2 % savings. Also want to keep money fairly accessible in the short term as we may help our son to buy a flat,

AS well as having to take some risk to gain better returns than from the bank , you need to be clear investing is a long term activity ( ideally with a time horizon >10 years) This is because it smooths out short/medium term market volatility.
If you want your money to be 'fairly accessible ' then best to leave it in a savings account .

bostonerimus

1) Pay off high interest debt
2) Put 6 months cash in the bank if you don't already have it.
3) Use it to increase workplace pension contributions
4) Anything left put in an ISA

If you do 3 or 4 invest in low cost tracker or multi asset funds...job done.