£20K to invest advice

hallster11

Morning all

After some ideas please.

- 46 year old male, married with no kids
- Mortgage just been paid off and no other debts
- In very good final salary pension scheme where I contribute 11% of my wage with the company contributing 13%. Have been in this pension for nearly 25 years and will be looking at retiring no later than 63.
- Currently have three ISAs with £20K receiving a paltry 0.55% AER with a further £19K in a HSBC Savers Account

With the £20K yielding virtually nothing, and in ISAs I haven't touched for 10 years and don't plan to until I retire, I'm after some advice on the sorts of things I should be looking in to.

Cheers in advance.

MaxiRobriguez

Personally would suggest you open a Stocks and Shares ISA to buy a cheap global equity index tracker, and leave it for 15 years.

SonOf

- In very good final salary pension scheme where I contribute 11% of my wage with the company contributing 13%.

Are you sure that is a final salary scheme as what the employer pays to the DB scheme doesnt matter. DB schemes are a package of defined benefits. The employer just needs to make sure the scheme can afford the benefits. That will see them adjust their levels of funding for the scheme periodically.

It is only money purchase schemes where the employer contribution is required to be known and is important.

Have been in this pension for nearly 25 years and will be looking at retiring no later than 63.

Will the scheme allow you to take benefits at age 63?
If so, are there penalties to do so or is it better that you fund the gap by other means?

Personally would suggest you open a Stocks and Shares ISA to buy a cheap global equity index tracker, and leave it for 15 years.

Statistically, that is unlikely to be the best advice. The average UK consumer does not have the risk tolerance to accept that level of risk.

Nothing the OP has said suggests that is the best option. Either in terms of risk attitude or it being a suitable tax wrapper. The pension tax wrapper may be more suitable. We are lacking sufficient information to say.

DrSyn

1. First have an emergency cash fund.

2. If you do not wish to put more money your pension, then invest via a stocks and shares ISA.

Be sure you want to invest and not save.

3. 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.

You chose the risk level or share/bond split you are comfortable with, pay them the money & they do the rest. There are a number of such funds. Two examples are given below.

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

With this you chose the share/bond split. They then will re-balance to maintain it at that split. You have to accept the market risk that goes with the split.

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

With this you chose the risk level (say balanced) you are comfortable with. They the re-balance the funds assets to maintain it at that risk level. This is called a “Risk Targeted Fund”

Albermarle

Currently have three ISAs with £20K receiving a paltry 0.55% AER with a further £19K in a HSBC Savers Account

If you decide you want to continue saving rather than investing , then at least look for some better interest paying savings accounts .
Cash ISA's are redundant for most people ( but not all) as you can earn £1000 interest tax free nowadays if you earn less than £50K . Over that you can still earn £500 in interest tax free.
Savings accounts that are not ISA's tend to pay more .
In any case well above 0.55%

Space_Captain

I opened a Paragon savings account and put it in there. 1.6% fixed isn't good these days but better than what you are getting now. Marcus is another option.

El_Torro

hallster11 wrote: »

Currently have three ISAs with £20K receiving a paltry 0.55% AER with a further £19K in a HSBC Savers Account

You have 3 ISAS worth £20k each, or they are worth a total of £20k?


If you have £79k in cash I imagine this is too much for an emergency fund and some of it should be invested.


Either way your emergency fund should be in accounts earning more than 0.55% interest. More details on what you can do here:
https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/


For anything above your emergency fund investing is a good idea. As long as you are planning to stay invested for at least 10 years. DrSyn gives some good tips for starters, though really if you're going to invest you should do some research and know what you're getting into.