Investing 250k inheritance post Brexit -advice needed

longleggings

Hi
I need some help with investing around 250k of inheritance due to me in a couple of months. I would like to achieve around 3% yield and have some kind of regular income.
I am particularly interested in your views on stock and shares ISA or indeed any other income sources (incl. property) in the coming year or so, post Brexit.
Will the Brexit scenario make investments more volatile ?
My current situation is that I have around 80k in short term ISA’s and bonds. I am retiring in Sept and am expecting around 16k p.a. pension incl. both state and work pension.
So potentially 80k +250k to invest.
Any advice gratefully received
Thanks I advance
LL

Malkytheheed

If you only want 3% yield then go for bonds. 

DiggerUK

In or out it won't make a difference.
If you have any mortgage, clear it, likewise clear all other debts. Some more details would be handy, but you seem ready for retirement.....
Digger Mansions has all our retirement savings in gold, we are more than happy with our decision. If you have funds you won't need for at least ten years that's we're I'd put them..._ 
https://moneyweek.com/2342/a-beginners-guide-to-investing-in-gold

https://moneyweek.com/37397/where-to-buy-gold-coins-and-bars

Linton

If you invested £250K in share/bond funds you should be able to sustainably take £7500/year, or a bit more, as cash increasing with inflation. Two problems:

1 Tax - you can only put £20K/year into an S&S ISA, or £40K/year if split between a couple.  So it will take some time to be safe from tax.  It may be worth your while to make a large one-off payment into your pension before you retire.

2 - What investments? There are various ways you can structure your investments to provide a steady income.  All will probably involve buying funds of shares and/or bonds. Without a lot more information it is difficult to suggest what would be appropriate for you. Given the amount of money involved, if you feel nervous about making a decision I suggest you talk to a local I(ndependent) Financial Advisor.  The "I" is very important.

On BREXIT - if you are invested sensibly you will be holding shares in companies from across the world with only a relatively small % dependent on the UK.  The World does not care about BREXIT.  The one uncertainty which you cannot avoid is the foreign currency risk.  If BREXIT is a disaster the £ will fall against other currencies.  The effect is that your foreign investments will rise in value in £ terms, which is good for you.  On the other hand if BREXIT is a brilliant success the reverse will happen.  Such effects will occur over many years so really it's not a matter that should concern you unduly.

** note that investment bonds are very different to what banks incorrectly call "bonds", which are really fixed term savings accounts.

xylophone

You have "relevant earnings" in this tax year and next - it would be worth considering making pension contributions up to the maximum while you do.

longleggings

Thanks to all for your thoughts - sounds like Brexit should not get in the way and that investment bonds may be an answer.
Linton, I was interested in hearing your point about a one off investment into my pension scheme - i will explore the possibilities within my scheme.  Regarding investment bonds, can anyone recommend an online platform or option for this. - i'm not sure i will need an IFA.
Thanks again
L

longleggings

Have explored the possibility of putting a lump some into an additional pension - i am with the teachers pension scheme
Does anyone have any experience of this scheme ? and is it worth putting money into an additional pension - i hear it may take along time to get a return

Audaxer

longleggings said:

Thanks to all for your thoughts - sounds like Brexit should not get in the way and that investment bonds may be an answer.
Linton, I was interested in hearing your point about a one off investment into my pension scheme - i will explore the possibilities within my scheme.  Regarding investment bonds, can anyone recommend an online platform or option for this. - i'm not sure i will need an IFA.
Thanks again
L

longleggings said:

Thanks to all for your thoughts - sounds like Brexit should not get in the way and that investment bonds may be an answer.
Linton, I was interested in hearing your point about a one off investment into my pension scheme - i will explore the possibilities within my scheme.  Regarding investment bonds, can anyone recommend an online platform or option for this. - i'm not sure i will need an IFA.
Thanks again
L

I would steer clear of products labelled as investment bonds. You could look at funds that include shares and funds that include corporate and government bonds, or better to start with multi asset funds that include both equity and bonds. There are some good low cost, globally diversified multi asset funds that are discussed a lot on here, such as Vanguard Life Strategy funds, HSBC Global Strategy funds and L&G Multi Index funds. They all come in various versions relating to your risk tolerance, e.g. more equities equals potentially higher returns, but greater volatility. A multi asset fund with around 60% equities and 40% bonds is a medium risk fund, and in my opinion a good option in retirement if looking to take a 3% annual return increasing each year with inflation. With a large amount to invest, I would split it between a couple of multi asset funds. 

Before doing anything you can learn a lot about these type of funds by searching these names on this forum and looking at sites like Monevator. If after that, you don't want to DIY your investments, you could look for a good IFA, but it would still be a good idea to learn as much as you can first so you can ask relevant questions to a few prospective IFAs and compare costs etc.

Sheriff_Fatmen

longleggings said:

Have explored the possibility of putting a lump some into an additional pension - i am with the teachers pension scheme
Does anyone have any experience of this scheme ? and is it worth putting money into an additional pension - i hear it may take along time to get a return

You want a pension fund with low annual management fees, less than 0.7%, my own Defined Contribution pension is 0.3%. If teachers is high %, you could manage your own pension via a SIPP, where you could invest in bond/gilts funds, gold, etc etc, doesn't have to be all stocks. Seems to be a lot of gloom around bonds at the mo. You may also get tax relief added by the government if putting it into pension, but I'm not sure since it is inheritance money. Read up and take ownership of your pension and pension rules  then put a chunk of it in there 

Moe_The_Bartender

DiggerUK said:

In or out it won't make a difference.
If you have any mortgage, clear it, likewise clear all other debts. Some more details would be handy, but you seem ready for retirement.....
Digger Mansions has all our retirement savings in gold, we are more than happy with our decision. If you have funds you won't need for at least ten years that's we're I'd put them..._ 
https://moneyweek.com/2342/a-beginners-guide-to-investing-in-gold

https://moneyweek.com/37397/where-to-buy-gold-coins-and-bars

If the OP'S objective is a 3% yield, how does investing in gold achieve that?

longleggings

Thanks Audaxer and others. I will get onto the Monevator site and have a look at Multi asset funds.
As a matter of interest, if i decide to consult a IFA. What is a typical/reasonable fee from these people ? and is it a percentage of the amount to be invested ?
Thanks again