Where/how to invest £30K

older_and_no_wiser

I have a fixed rate savings account maturing next month with around £30,000 in it. I'm wondering where to invest this next. I'm 52 now and don't need access to it till well after retirement which will be when I'm 59/60. I have just moved my personal pension to an II SIPP and I was thinking of putting it all in there as I have carry forward allowance from previous years I can use. I realise I will get any contribution topped up by 20% by the government. However, I'm thinking it may be better putting it outside the pension as there could be tax to pay on withdrawal when I eventually need it - if I have too much invested in the pension as only the first 25% is tax free and up to £12,500 per year. I've not looked too much into how drawdown could work and if there are further tax savings possible at that point.

I also worry a bit about the fund performance now that the crash has started. I've seen my funds plummet in the last couple of weeks. Of course, this won't go on forever, and buying low is always good. I'm currently invested around 90% equity which I'll drop a couple of years or more prior to retirement. 

I have used up my ISA allowance for this year in a stock ISA. So that's not an option till next April.

Maybe use the money in the pension fund and use it all to purchase a bonds fund?

Happy for all your thoughts, advice and criticism. 😂

Thrugelmir

Bond funds could plummet if inflation spikes and investors demand higher yields on Government Bonds as a consequence. What "crash" has started?  There's an investment universe outside of the media headlines. No investment journey is without it's bumps in the road. If all your funds have plummeted then perhaps time to review the diversification within your portfolio. 

older_and_no_wiser

Thrugelmir said:

 If all your funds have plummeted then perhaps time to review the diversification within your portfolio. 

Well of you've read my other thread about Baillie Gifford American, you'll know I'm the stupid idiot who rebalanced and put a big chunk into that fund! It's around 25% of my pot and I've diversified with the rest of it.

Thrugelmir

swleventhal said:

Thrugelmir said:

 If all your funds have plummeted then perhaps time to review the diversification within your portfolio. 

Well of you've read my other thread about Baillie Gifford American, you'll know I'm the stupid idiot who rebalanced and put a big chunk into that fund! It's around 25% of my pot and I've diversified with the rest of it.

Another £30k to invest dilutes the concentration further.  It's your call and often the path that investors least like to take. Bite the bullet on part of your BGA holding and reinvest the proceeds elsewhere.  BG are unlikely to repeat the windfall from investing in a Tesla type stock anytime soon. 

older_and_no_wiser

Thrugelmir said:

 Bite the bullet on part of your BGA holding and reinvest the proceeds elsewhere.  BG are unlikely to repeat the windfall from investing in a Tesla type stock anytime soon. 

I'm happy to wait and ride out the BG American for a couple of years if that's what it takes. Once it regains some profit I may well cash in part of it and reinvest but I really don't want to sell just yet. I have faith that the American market will pick up and the BG fund managers have a good track record. 

older_and_no_wiser

I've got very small SIPP investments (1% each) in BG Shin Nippon and Fidelity China Special Situations. I had planned on adding to those with this extra money. Those funds are currently 7% down on when I purchased them a couple of weeks ago. Again, these were historically good funds which are suffering now but maybe worth sticking with. 

As @Thrugelmir mentioned, this will dilute the American concentration down somewhat.

Albermarle

and I was thinking of putting it all in there as I have carry forward allowance from previous years I can use

Just to be clear - you can not add more to a pension gross than you earn gross in a tax year , regardless of what happened in previous years . The carry forward of annual allowance is a separate issue . You can carry forward unused allowance but you need a high enough salary to take advantage of it .I just say this as often people are confused about it .

Apart from that a pension will always have a minimum tax benefit over other investments of 6.25% ( due to the 25% free cash ) 

If you can the also take £12570 tax free as well ( during years when you have no other pension or taxable income ) then it will be a much bigger gain obviously .

Also in the pension you do not have to worry about capital gains tax etc .

Flatulentoldgoat

Bitcoin is at a good price right now, time to buy. I'd thoroughly recommend looking at Crypto (you don't need to understand the underlying technologies)

older_and_no_wiser

Albermarle said:

Just to be clear - you can not add more to a pension gross than you earn gross in a tax year , regardless of what happened in previous years . 

Yes thanks - I was aware of that and already done the maths to ensure I don't go over that amount.

older_and_no_wiser

Flatulentoldgoat said:

Bitcoin is at a good price right now, time to buy. I'd thoroughly recommend looking at Crypto (you don't need to understand the underlying technologies)

Hmm. Yes may be worth a punt but it's so volatile I'm not sure my heart could take the stress. Possibly a smallish amount so I'm not panicking at every downturn. 

whatstheplan

As my other posts confirm, I'm not anti crypto, however I wouldn't be using any of your £30k to invest in BTC.