House money advice

Interested!

For health reasons I'm selling my house and moving in with a friend, I don't know how long this will be for, years I expect, possibly many maybe just a few. I'm concerned that my capital is going to depreciate compared to bricks & mortar as I may need to buy a home in the future. If I do need somewhere else to live at short notice I can always rent or get a mortgage so I don't need instant access to the money, if I did buy another property I'd downsize so would only spend about half of my capital. I'm 42, single, no kids, no debts, 22 years in public sector job with pension. What do people suggest I do with the money (£300Kish) to protect it from inflation? Any advice welcome although I'm reluctant to do BTL as I don't need the hassle.

Thank you.

ChilliBob

Whilst you're deciding maxing out premium bonds at £50k is a good idea. Instant access pretty much and the best rate with 'average' luck. 

Perhaps 100k could then sit amongst fixed or notice savings accounts - 100% safe, but not an amazing rate.

The remaining 50% which you say you'd not need for a house presumably you have a longer time horizon in mind, in which case investing would be a possibility to explore. 

This is a more risk averse plan I guess, as its saying the capital you *need* isn't invested in any way, just earning a (pitiful!) amount of interest, and probably eroding slightly compared to inflation. 

The investing side of things is a whole separate question really. You'd need to decide where you can invest from first - e.g Pension, ISA or if you'd need to invest unsheltered from the tax man. Pensions aren't something I know tonnes about too much but maxing these out is a good idea too. 

Not a concrete plan but hopefully that gives you some thoughts to ponder. Do consider if the health reasons would change which might mean getting hold of more than 50% of the capital could be a benefit. 

Good luck  

El_Torro

This is one of those rare occasions where BTL might actually be a good idea. Simply because you could move into the property yourself if you decide to live alone again. That way you don't need to worry about house price inflation. I know you said you're reluctant to go down this route but it might be worth considering.

Other than that ChilliBob is right in saying you might want a mix of cash and other assets. Equities will most likely outpace inflation but if you plan to cash them in within 10 years of the initial investment there's a high risk that they'll be worth less than when you first invested. 

What I would say is don't lock your money away too soon. Wait until you are sure you are happy to live with your friend long term. For now buy £50k worth of Premium Bonds and put the rest in an NS&I Direct Saver or other places where the money is safe and you have easy access to it.

mark55man

Up to about 5 years the advice would be cash or cash like to avoid the risk of a market fall.  As your intent for the money is to rebuy property you need something that tracks with property - but most investment vehicles are business property related not domestic.  Therefore buying a BTL (or even renting out your own house, if not sold yet) does seem a fitting idea.  You can get full service agents, even some who guarantee against voids.

Good luck with your health and your decisioj