Where to put some money away for 3-8 years?

noClue

Guess this is one of those questions got asked a lot... Have around £100k in cash atm, thinking of moving to a bigger place in 3-8 years (e.g. growing children, progressing in job so hopefully to a different area further from london).
Premium bonds already maxed out. Own current place no mortgage.
Wonder what my better options are?

ColdIron

https://moneyfacts.co.uk/savings-accounts/

steampowered

So, you will have savings of £150k . £100k in cash, another £50k that you've already got in premium bonds.

That is far too much to be holding in cash and premium bonds. Each year, inflation will be reducing the value of your savings.

I would invest a big chunk of that. Perhaps in a lower risk investment fund as you might want to access it in a few years time. You should make the most of your £20k per year stocks & shares ISA allowance.

Also check your pension position. Are you setting yourself up for a retirement on baked beans? If so, it might be a good idea to use some of this cash to fix that, making the most of the tax relief you can get while you are working (especially if you are a higher rate tax payer).

csgohan4

I think alot of advice in a similar thread holds true here

https://forums.moneysavingexpert.com/discussion/6174594/ive-got-170k-and-would-like-to-know-where-to-invest-it/p1

noClue

Even 7 year bond return is so low lol, only 1.7%...
I think my time scale makes thing harder as it's right between short and medium term. I might have to take a bit risk go for 20/80 or 40/60 bond/equity split...

noClue

equity/bond*

mark55man

what's your appetite to risk.  If you need the capital for a house purchase then , you might have longer than 3-8 years eg when you move you can take a mortgage out for a bit extra to give yourself extra years.  There are many threads about being mortgage free through aggressive overpayment versus investing for the future

Some people would advise steering clear of investment until CoVid has finished, others would say fill your boots. 

The posters above are right if its 3-5 years and you need all the capital for the plans then you should avoid stocks and shares - but 8-10 I think you need to have some non cash exposure,  There are plenty of capital protection funds (often Investment trusts) and plenty of threads about them, these probably represent the most cautious way of dipping your toes in.

Although you are being safe and cautious you must not underestimate how much inflation can erode a cash pile.  I would be very worried about that.

xylophone

You might consider using your full ISA allowance in stocks and shares for the next couple of years at least - you would still have your PBs and £60,000 in a cash deposit.

noClue

mark88man said:

There are plenty of capital protection funds (often Investment trusts) and plenty of threads about them, these probably represent the most cautious way of dipping your toes in.

You are not suggesting this right? 
RCP
They are investment trust I believe?

I did a search here, but only found some fraud-beware posts?

bowlhead99

noClue said:

mark88man said:

There are plenty of capital protection funds (often Investment trusts) and plenty of threads about them, these probably represent the most cautious way of dipping your toes in.

You are not suggesting this right? 
RCP
They are investment trust I believe?

They are an investment trust which are positioned relatively conservatively compared to some, but their goal is not explicitly capital protection, and most of their investments are equities. Trusts such as Personal Assets or Capital Gearing, or some of the funds from Ruffer and Troy would generally be expected to be less volatile (though likely have lower longer term returns).

RCP just published their results for the six months to June which were broadly flat for NAV total return (-2% versus 0% for FTSE World or LifeStrategy 60),  but down almost 15% on share price because it moved from a premium over NAV to a discount.  Only a little over 40% of their portfolio was in listed equities as an average for the period, but they also hold a large slug of unlisted equities or private funds and a number of 'more interesting' debt or credit instruments which may suffer at the same time as equity markets do. For example, from the start of the year to the middle of March market bottom, Personal Assets dropped less than 10% (conservative portfolio and discount/premium control mechanism) while RIT Capital Partners was briefly down over 30% on share price at one point (although 15-20% of that would have been the swing in the discount).  I hold both of those trusts within my pension.

noClue

Thanks for the explanation. I guess it's good time to hold some RCP since they are on discount. Will look into Personal Assets.