Advice on Investing £8k for 5 Years

love_lifer

Hello all

Im looking to invest some of my savings to increase, hopefully, my income at age 60. The £8k is currently sat in a v low interest account. Im self employed on a very low income. I have about £50k savings and am using this to supplement my income . next year I can start drawing some local govt pension £8k per annum), which will mean I dont need to use my savings on the whole.

I dont have a mortgage or debt. I live frugally. I am single

Ive looked at stocks and shares isas but am stuck deciding what is the best option. I think a do it with me provider makes the most sense.

Any thoughts would be most welcome

LobsterMemory

I'm sorry, I'm not able to help but what I find annoying, is that there's you, who really could seem to benefit from independent financial advice won't get it because the advisors are pandering to the sort of silly sods on the "I've got a spare £500k. What should I do?" threads

johnadams7

LobsterMemory wrote: »

I'm sorry, I'm not able to help but what I find annoying, is that there's you, who really could seem to benefit from independent financial advice won't get it because the advisors are pandering to the sort of silly sods on the "I've got a spare £500k. What should I do?" threads

they can't be that silly if they have 500k, unless of course it is criminal gains. Jealousy much?

LobsterMemory

Absolutely not. If I had a spare Half mil, I'd spend £1500 of it on a vsit to an IFA rather than cadge advice off an internet forum

johnadams7

5 years isn't a very long time frame, and unless you can afford to loose it - i'd stick it in a Marcus account. Although perhaps, you might consider chucking a couple k, in a low equity, multi asset product, maybe the lifestrategy 20-40%? With the proviso that you may need to keep it a few more years.

johnadams7

LobsterMemory wrote: »

Absolutely not. If I had a spare Half mil, I'd spend £1500 of it on a vsit to an IFA rather than cadge advice off an internet forum

Not sure how you came to that figure ? There is a reason the wealth use people like St James Place and that is because of the service. Speaking to some IFA's and meeting two, they seem to be chewing gum, chino wearing chancers

xylophone

Will you earn £8000 (or more) in this tax year?

Are you currently contributing to a pension? If not, had you considered so doing?

For example, let's suppose that you earn £8000 this tax year.

You could contribute £6400 to a personal pension and receive tax relief of £1600.

Even with no earnings at all you can still contribute up to £2880 to the pension and receive tax relief of up to £720.

https://forums.moneysavingexpert.com/discussion/5580163/paying-2880-into-pension-when-retired&highlight=contributing+3600

Have you obtained a state pension forecast?

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

Linton

Your situation isnt clear to me from what you have said. How old are you now? When do you need the extra income? How much extra income do you need? Clearly £8K spread over the rest of your life isnt going to make much difference. Why isnt the £50K part of the equation?



However, taking the £8K and 5 years given in the title: Your problem is that 5 years is too short a time for investments like shares that are likely to produce a significantly better return than cash. Such investments will increase generally over time at a higher rate than savings accounts but in some years could have a major temporary fall in value. If one of these falls occurs say in year 4 there could be insufficient time for recovery by year 5 so you could lose money overall.


The best returns using standard accounts are likely to come from putting your money into bank/building society 5 year fixed rate savings "bonds" which currently return up to 2.5%. In the past there have been special deals available which offer higher rates for limited amounts of money but these normally require regular deposits. This possibly could be achieved by circulating money around a set of such accounts. This isnt my area of expertise but I think such deals are becoming less common and less generous.

jez_waterhouse68

Hi does anyone have any suggestions on investing in CryptoCurrency?

love_lifer

Thanks for the replies. Im 55 next year which is when I can start taking my private/local govt pension, £8k per annum.

the 50k is there for emergencies, extraordinary expenses until I die. It is in a variety of accounts to maximise interest

I earned £6k last year before outgoings, £4k after. So with the pension next year I wont be over the taxable income level.

I can invest for longer I suppose. It feels like I can risk £8k svaings, hence that figure (not to be confused with the pension amount)

Ive had free phone 'advice', which was to spend the svaings and then draw pension but that makes me uneasy.

Re state pension, Im 5 years short on contributions currently but intend to keep working to make that up before i reach 67

It feels like I have to try guess when I'll die in order to make a good decision.

love_lifer

xylophone wrote: »

Will you earn £8000 (or more) in this tax year?

Are you currently contributing to a pension? If not, had you considered so doing?

For example, let's suppose that you earn £8000 this tax year.

You could contribute £6400 to a personal pension and receive tax relief of £1600.

Even with no earnings at all you can still contribute up to £2880 to the pension and receive tax relief of up to £720.

https://forums.moneysavingexpert.com/discussion/5580163/paying-2880-into-pension-when-retired&highlight=contributing+3600

Have you obtained a state pension forecast?

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

Thanks for this, I hadn't realised it was an option. So basically I start a new pension and get govt help?

I will do some more research. Looks a better option than stocks and shares ISA