Options for £250k for five years

NottinghamKnight

Premium bonds and fixed term savings accounts, job done.

Albermarle

choi said:

Thanks
I'd be prepared to see some loss due to inflation
However if inflation rises I'm assuming interests would rise
However if I'm locked in a long term savings account on fixed interest I would not be able to take advantage
Any solution to this

Yes sort of - Fixed term for 2 or 3 years , rather than longer . Maybe start one off now and then another in 6 months and then another 6 months after that . 

choi

Regarding Investment
My IFA proposed following costs
Initial Arrangement and Implementation charge of 1.35% on investment of £250,000
1.0 % pa ongoing

Are these reasonable charges

steampowered

choi said:

As one of the responders has said I am ultra cautious

I suffer from extreme anxiety and I also have serious health issues
The five year period reflects this
But I guess I should be more optimistic and go for ten years
To sum up I'd rather lose 100k plus to inflation on the Savings Route than lose a lot more by the Investment Route 

Given your anxiety, and the fact that you said you do not need the money, I agree with other posters that savings accounts with premium bonds / NS&I income bonds are a good option. Have a look at  https://www.nsandi.com/ - which is backed by HM Treasury so as safe as you can possibly get.

Your money needs to work for you. There is no point having a big savings pot if you don't have any immediate need for it, and it is causing you stress. 

Even a "low risk" investment option will come with the risk of fluctuations in value from time to time. Over a 5 year plus period those fluctuations will average out, but if it is going to cause you to suffer from anxiety in the mean time, it's not worth it.

If you decide savings are the way to go, you don't need an IFA.

As an alternative you could consider taking out a sensible low to medium investment and just leaving it there - i.e. don't check your investment statements for the next 10 years. Or effectively hand it over to the IFA to manage. But if you think you would be unable to leave it alone and that you would be unable to manage the anxiety associated with investments, then that might not be realistic.

NottinghamKnight

choi said:

Regarding Investment
My IFA proposed following costs
Initial Arrangement and Implementation charge of 1.35% on investment of £250,000
1.0 % pa ongoing

Are these reasonable charges

The initial seems reasonable, though some will not charge an initial charge on larger sums if they are being paid annually as well. Annual looks pricey, would expect half that.

choi

Some one suggested using Chase Dr Vere for Investments
Are they quite expensive
Or would I be better with an individual IFA

Regarding Savings can anyone recommend a Savings Platform similar to the one run by HL
Are these ok

dunstonh

choi said:

Regarding Investment
My IFA proposed following costs
Initial Arrangement and Implementation charge of 1.35% on investment of £250,000
1.0 % pa ongoing

Are these reasonable charges

1% ongoing is usual on smaller values.  You would expect it to tier downwards as you invest more.  It depends on how much of the £500k being invested but 0.5% would be more typical for ongoing.   Plus, around £2500 initial should be target. 

Some one suggested using Chase Dr Vere for Investments
Are they quite expensive
Or would I be better with an individual IFA

Always should be a choice between IFA and DIY.   Not FA. Not wealth manager.  

Eco_Miser

You don't have to do the same thing with all your money.

You could spread say 80% of it among Premium Bonds, other NS&I products and a series of fixed-term fixed-rate deposits with banks (all capital guaranteed, but susceptible to inflation), and 20% into investments that will probably cover inflation for the whole amount, but could lose 50% of its value, temporarily.

choi

Is there a max amount of Premium Bonds you can hold
What kind of interest would I get with NS&I
As regards the 20% investment
Would I need an IFA for this
Or is there an off the shelf product such as Vanguard or similar

grumiofoundation

choi said:

Is there a max amount of Premium Bonds you can hold 50k per person
What kind of interest would I get with NS&I from 23rd novermber 0.1/0/01%. Premium bond 'expected' (with average luck) prize return just under 1%* 
As regards the 20% investment
Would I need an IFA for this You don't need one. For only 50k fees would likely be higher % than for 250k.
Or is there an off the shelf product such as Vanguard or similar vanguard, and other providers, provide multi-assest funds that are likely suitable. Which fund(s) are appropriate depends on attitude to risk, timescale of investing etc. Links below

*actually less than 1% as this headline rate skewed by £1M prizes.

https://www.moneysavingexpert.com/savings/premium-bonds/
https://www.nsandi.com/interest-rates

Couple of links for intro reading - many, many more out there...
https://monevator.com/passive-fund-of-funds-the-rivals/
https://www.vanguardinvestor.co.uk/articles/latest-thoughts/investing-success/building-a-diversified-investment-portfolio