Investing 250k inheritance post Brexit -advice needed

eskbanker

thegentleway said:

AnotherJoe said:

To answer for TC, with £50k (max amount) PB's will pay 1.2% on average tax free. 

You actually get less than 1.2%, about 1% with average luck.

No, the 1.2% is already the reduced figure, reflecting the fact that the vast majority won't get anywhere near the theoretical return of 1.4%.

longleggings

Thanks - some interesting comments.
In response to Coyris this is new money so  NS&I seems to me to make more sense in the short term
LL

AnotherJoe

thegentleway said:

AnotherJoe said:

To answer for TC, with £50k (max amount) PB's will pay 1.2% on average tax free. 

You actually get less than 1.2%, about 1% with average luck.
"PB are more for fun than returns": https://www.moneysavingexpert.com/savings/premium-bonds/

If you actually read that link, you'll see it says that with average luck and £50k in bonds you have a  99% chance of getting better than 1.16%. So 1.2% seems like a fair approximation. 

eskbanker

AnotherJoe said:

thegentleway said:

AnotherJoe said:

To answer for TC, with £50k (max amount) PB's will pay 1.2% on average tax free. 

You actually get less than 1.2%, about 1% with average luck.
"PB are more for fun than returns": https://www.moneysavingexpert.com/savings/premium-bonds/

If you actually read that link, you'll see it says that with average luck and £50k in bonds you have a  99% chance of getting better than 1.16%. So 1.2% seems like a fair approximation. 

That's not actually what the article says - unless I'm mistaken, you've taken that figure from the section where they're comparing PB returns with interest that's taxed at higher rate, i.e. the assertion is that a £50K holding for a year has a 99% chance of beating 1.16% less 40% tax, so it's a 99% chance of a return better than 0.7%.

There's little doubt that a realistic median average is in 1.26% territory, but, even with a decent-sized holding for a reasonable period, the intrinsic variability of returns in a random draw means that there is still a much higher chance of coming up short of that, in that it's only an 87% chance of beating even 1% for that selected combination....

thegentleway

eskbanker said:

No, the 1.2% is already the reduced figure, reflecting the fact that the vast majority won't get anywhere near the theoretical return of 1.4%.

Thanks for clarifying