Looking for safe no-maintenance investments for later life

jcb999

Looking for safe no-maintenance investments for a family member (late 60’s) who needs to consolidate a lot of savings and investments (has a variety but is no longer interested in managing them). Due to previous bad experiences will NOT consider an IFA.

They have a considerable sum in cash accounts as well but are currently terrified of losing money in the stock market (despite having investments there already) yet also terrified of inflation eroding their savings. Keeps each account below FSCS threshold. Also had a recent bad experience with Woodford and have lost all confidence. Result – frozen into inaction, yet still terrified.

Do you think Vanguard Life Strategy 20 or 40 would be safe enough? What else could be considered? (wants to keep within FSCS limits.) Wants a buy-and-keep strategy. Any help gratefully received.

Malthusian

Do they have Lasting Powers of Attorney in place?

What do they want to achieve with the money? Do they need income, capital growth, etc? If they leave things as they are then what bad things will happen?

If you recommend something capital-at-risk and it then goes down they will probably blame you, so the best advice for you would be to make bland suggestions of cash accounts and otherwise steer clear.

Vanguard LifeStrategy 20% and 40% are not safe and not suitable for someone who is "terrified" of risk. Bonds will still go down in a crash. Bonds will also go down if interest rates increase or are expected to. Once you go below 50% equities you start sacrificing meaningful return for no meaningful reduction in risk.

The only "no maintenance" investment is a conventional annuity. I am emphatically not suggesting you suggest one, partly because there is no reason to think one is appropriate from your post, and mainly because if they bought one and later changed their mind they will blame you. Any capital-at-risk investment should be reviewed annually at minimum; cash accounts should also be reviewed regularly but fewer things can go wrong if you don't bother.

Albermarle

AS you have already stated :
Cash = safe = low interest ( less than inflation )
Investments = potentially more growth but also potential for loss ( risk)

There is no magic escape route inbetween .

If you want to invest but are very cautious, than something like VLS20 would be the route to go. It will probably at least keep pace with inflation in the long term but this is NOT guaranteed and it may well even go down during market downturns , However it is a lot less risky than investing in funds like Woodfords , although of course the potential for growth is limited .

Regarding keeping within FCSC limits - with banks this makes some sense, as they can and do go bust occasionally . It is much less of an issue with funds like Vanguard . If they were to go bust then probably means we would be in the worst economic catastrophe the world has ever seen/nuclear war and there would be no government to pay you compensation.

xylophone

Is the relative married? Does he have children?

Does he own his own home?

Presumably he has a state pension - does he have other secure pension income?

Is his pension income enough to keep him comfortable when his usual spending patterns are considered?

xylophone

https://www.sharesmagazine.co.uk/article/investment-ideas-for-the-over-70s
may be worth a glance.

atush

I would look at some long term Rising dividend payers in the Investment trust sector.

Yes they can go up and down with the market, but if you arent selling units/shares you dont loose out. And all the while they are paying an annual dividend which rises each year and you can harvest for income. Some have 5+ decades of consistent rising dividends.

firestone

xylophone wrote: »

https://www.sharesmagazine.co.uk/article/investment-ideas-for-the-over-70s
may be worth a glance.

Might also be a good point of interest & learning for the OP on how things can change and the risk involved as Two years ago the article was happy to call Woodford a high quality fund and One of their 3 main picks

Malthusian

xylophone wrote: »

https://www.sharesmagazine.co.uk/article/investment-ideas-for-the-over-70s
may be worth a glance.

Not according to you, because if you'd glanced at it yourself you'd've spotted this gem.

Ryan Hughes, head of fund selection at AJ Bell Youinvest, recommends opting for a mixture of corporate bond funds, multi-asset funds and, if your risk appetite is appropriate, diversified equity funds. [...]

‘For equity exposure, assuming the risk profile and time horizon warrant this, I’d be looking at high quality equity income holdings such as Woodford Equity Income (GB00BLRZQ620) and Newton Global Income (GB00B8BQG486).

[emphasis as per the original]

lol

Even if it didn't have Woodford in it, it's still a typical "sack of random crap" fund-picking article that really should be a relic of the 2000s by now.

This: "A typical equity (another name for stocks and shares) to bond ratio for someone over age 70 would be 20:80 or 40:60" - is also nonsense. I mean the bit about a "typical ratio", not the bit where they don't know what "stocks and shares" means, that would just be pedantry. There is no typical ratio and a 20% bonds / 80% equities split is unsuitable for most 70 year old investors willing to take some investment risk.

xylophone

I did say "may" and "glance" - and there can be few investors who are not aware of the Woodford debacle...

And I thought it might have been of interest to the OP to look at the comments and suggestions from a couple of years ago and weigh up performance since.

Audaxer

firestone wrote: »

Might also be a good point of interest & learning for the OP on how things can change and the risk involved as Two years ago the article was happy to call Woodford a high quality fund and One of their 3 main picks

Well spotted. Even although it's an old article, I would have thought because of the reference to the Woodford fund, they would want to remove that article from their site.

Malthusian

Audaxer wrote: »

Well spotted. Even although it's an old article, I would have thought because of the reference to the Woodford fund, they would want to remove that article from their site.

It's bad form to remove historic articles just because they contained a prediction that turned out to be wrong. It's Ministry of Truth territory. If the Grauniad backs Man U to win the Premier League title and nine months later Man City wins, they don't go back and erase the evidence of their failed predictions.

If there was an error of fact in the article that would be different and would require a correction, but "bash the wine gums on Neil Woodford" is just an opinion.

It does usefully illustrate that articles in the consumer press (mainstream or financial) should always be taken with a large pinch of salt. Information on tax or legal matters can usually be found on the websites of solicitors or financial service providers, which are generally accurate. Recommendations from the press on funds and investments are mostly garbage.