Widow 71 years young seeks opinions

lizzet

Completely new on MSE, been reading the investment-related topics on here for several weeks.

Little bit of background. My husband passed away quite recently. The flat in which I live is paid for and I'm debt-free. Gave up working some years ago. For a woman in her early 70s, I'm feeling fit and healthy.

I'm drawing the full state pension plus a private one. In addition, my cash savings are enough to give me financial comfort. Also have adequate multi-asset funds put away in case of future homecare or care home costs.   

My late husband only ever had a small pension and due to his over spending and big ideas, he depleted it quite quickly. 

It has now come to my attention that he had an ISA invested in funds. Money was never really something that he liked to discuss, even with me. He more or less bordered on total secrecy when it came to finance. So this is now something I wasn't expecting. 

His ISA is being passed to me. It has a total value of £107,000. From what I can gather it is invested in about 25 different funds, spread over various risk factors and equity to bond ratios. It includes for example chunks of money in each one of VLS ranges plus some in their All Cap, Dev World and Dev Europe excl UK. Then also, he had amounts in equivalent funds of Fidelity, Blackrock Consensus and others. I think it's fair to say it was a mix and match with no structure.


My questions are...1) Would his total ISA amount be sold and the cash amount transferred to me, or would I inherit the ISA as is?

2) Whichever the case, I would like to continue to invest this money. Firstly to rearrange it into a sensible portfolio containing a smaller number of funds. My risk appetite is medium to high for a woman of my age. I'm thinking of leaving it invested for about 10 years. 
Kind of looking for opinions, not necessarily advice. Sticking the whole lot in a cautious 20:80 equity to bond is safer. But I like the idea of 100% equities. Perhaps a mixture of adventurous with a degree of relative safety?

My rationale is that someone earning a good salary at age 35, sticking a decent chunk of it in say Fidelity World Index should be comfortable with a market crash because he/she still has years for a recovery. But even at 71, I can hang in after a crash for 10 PLUS years, if necessary.

Dazed_and_C0nfused

This answers some of your questions.

https://www.gov.uk/individual-savings-accounts/if-you-die

pip895

With regard to what to do with the investments once you have them in your own ISA - given that you seem to have a whole range of trackers there you could probably replace them with a single multi asset fund without changing much.  

Personally I would avoid VLS 20 - if you want to go for something at that risk point then perhaps look at Troy Trojan or the very similar Investment trust PNL - they are actively managed and I feel might avoid some of the pitfalls with such a large bond component. 

If you want to stick with a single passive investment then VLS 40 or 60 might be a better choice.

[Re reading your thread did you mean 80:20 Equity to bonds - If so VLS 80 would be a reasonable core holding - perhaps with the addition of some satellite funds covering things like small companies which are better with active management..]

jimjames

You mention that you already have multi-asset funds. If that's the case then it's probably not a good idea to look at this money in isolation and to consider it as part of your whole portfolio overall. If you're happy with the existing funds could you just add this money to them in the same proportions?

lizzet

pip895 said:

[Re reading your thread did you mean 80:20 Equity to bonds - If so VLS 80 would be a reasonable core holding - perhaps with the addition of some satellite funds covering things like small companies which are better with active management..]

I did actually mean VLS20 as an example.
Was emphasising the point that at the age of 71, some would perhaps suggest a much lower risk multi-asset fund, whereas I was suggesting that 100% equities could still be feasible.  

pip895

lizzet said:

pip895 said:

[Re reading your thread did you mean 80:20 Equity to bonds - If so VLS 80 would be a reasonable core holding - perhaps with the addition of some satellite funds covering things like small companies which are better with active management..]

I did actually mean VLS20 as an example.
Was emphasising the point that at the age of 71, some would perhaps suggest a much lower risk multi-asset fund, whereas I was suggesting that 100% equities could still be feasible.  

That makes sense- I am retired and in drawdown but a little younger than you and I’m currently at 70% equity.  The 30% is split between bonds Cash and about 5% Gold.

tacpot12

I think the idea of 100% equities is sensible in your situation. You have enough income to meet your day to day needs, so have the flexibility to wait out any short-term downturns in the market. 

Vanguard VLS 100 could be a good option. 

There are a few Investment Trusts that might be alternatives, such as Scottish Mortgage, Monks, Brunner and Bankers. (www.theaic.co.uk is a good website to look at the relative merits of different Investment Trusts).

kuratowski

Sounds like you already have a very firm grasp on what you need, and so maybe just want to hear a few more ideas?
For 100% equities, have a look at the long list here https://monevator.com/low-cost-index-trackers/
Or, if you don't want to go quite as far as 100% equities, an adventurous portfolio might look something like: 85% global index tracker and 15% gilts.

And you'll need a platform to hold the funds.  Here is a table giving comparison of the platforms.  I would suggest perhaps a fixed fee platform, in view of the account valuation.
https://monevator.com/compare-uk-cheapest-online-brokers/

Robert_McGeddon

lizzet said:

 Would his total ISA amount be sold and the cash amount transferred to me, or would I inherit the ISA as is?

Could be either.

The thing to avoid is having his ISA closed and paid to you - you are then limited to £20K per annum investment in your own ISA.

You should confirm that the transfer into your name is via an Additional Permitted Subscription (APS) before you press the button. In practical terms, if you open an ISA in your name with his provider the investments can usually be moved across without difficulty. If you're transferring to your provider this is sometimes possible but more likely is the old provider advises the new provider the value of the APS, then transfers cash to you. You then add cash to your ISA and invest it as you see fit.

Malthusian

lizzet said:

Was emphasising the point that at the age of 71, some would perhaps suggest a much lower risk multi-asset fund, whereas I was suggesting that 100% equities could still be feasible.  

When people say "older person = lower risk profile" they generally assume two things: 1) more likely to want to draw down on the funds, and 2) in the case of someone new to investing, likely to be more set in their ways and therefore less tolerant of large swings in value. Neither applies in your case from what you have said.

If your income is sufficient for your needs and you believe you already have enough put by for future care costs, what is the money likely to be used for if you withdraw it in 10 years?

Is it worth thinking about estate planning and not just investment, if this money isn't likely to ever be spent on yourself?

Alexland

Robert_McGeddon said:

The thing to avoid is having his ISA closed and paid to you - you are then limited to £20K per annum investment in your own ISA.

APS is a subscription requiring information and declarations not an ISA transfer. The old ISA wrapper ended on death. More information in the ISA manager's guidance below.
https://www.gov.uk/guidance/manage-additional-permitted-subscriptions-into-an-isa