Where to invest 150k?

daveharruk

isayhello said:

AlanP_2 said:

Pension contributions attract tax relief but withdrawals are taxed and a pension can't be accessed until 55 (going to 57).

Does that suit you?


If you want the money before then for something then probably not, but if you have retirement in mind then a pension will have the greatest benefit.

The investments that can be in a pension, a S&S ISA or unwrapped are all the same the pension / ISA is just a tax wrapper to keep them in.


BTL, as in a 2nd property attracts a higher rate of Stamp Duty and the profits are taxable. Depending on your overall income and tax rate this is typically "worse" than it used to be when all mortgage interest could be offset against tax at marginal rate (now limited to Basic Rate). In addition there will be Capital Gains Tax to pay once sold.


We all (mostly) want our pot to grow but many of us have a more specific objective or time frame. If you were 70+ and just wanted your pot to tick over with limited downside you would choose different investments than if you were 40 and were trying to build a pot so that you could retire before say 60.  

Ah ok thanks, so it seems with a pension the benefits cancel each other out a bit in the end as you are taxed eventually right?

If I've never bought a property is it a better investment then to have a BTL as I live with family or rent sometimes.

Any suggestions for platforms/investment types for 150k?

No, that is not correct - it is normally better to invest via a SIPP than an ISA - for several reasons - first of all, you will make gains on money that you otherwise would never have had (since you get tax relief either at source or later if done outside of payroll) and thus there is more potential for the snowball effect of compounding to really take effect, secondly you will most likely be paying less tax on the way out than you did on the way in because your income will be lower (this could be a lot less if you move to somewhere like Cyprus which has a 5% tax on pension income) and thirdly you can get 25% of it tax free anyway - whether that be all at once or of each withdrawal.

I doubt that a single let would be financially worthwhile after all costs are taken into account - perhaps a HMO, social housing or AirBNB lets would give better results. It might be useful for diversification but as you can typically get 4-5% dividend from a property REIT (real estate investment trust) plus potential capital growth unless you can find a really good opportunity (e.g. through a deal sourcer or existing contacts) it is probably better to let someone else do the hard work.

As far as platforms go, I use Interactive Investor for my SIPP, but iWeb would also be suitable for large amounts of capital as they're both fixed cost. Types of investment are very much an individual choice and will need a fair bit of research. Interactive Investor and other platforms have reference portfolios that you can just copy, or you can choose from their recommended lists. You can also pay third parties like SaltyDog Investor and get their portfolios which you can copy. The difficult part of investing though is not about making gains, but about minimising losses - at least in the long term. If you aren't bothered about short-term losses, then you could just keep a spare pile of cash to invest more if markets go down by a certain amount.

isayhello

Albermarle said:

The pension provider is less important than the investments you hold within the pensions.
So how your Pru pension is invested and how that fits with your other investments is the most important .

Separately you may look at alternative providers in terms of charges / ease of access/choice of investments.
A 'whole of market ' SIPP will offer thousands of funds  and other investments , but that just confuses many people and they will prefer something simpler ( maybe like the Pru pension) . It is really horses for courses .
Also transferring the Pru pension to your current workplace pension is usually an option.

I have invested the Pru pension in a few funds I've chosen, I was happy with them but the selection wasn't huge.

If I want to move this to another provider, for more options and cheaper costs, do I have to do it by transferring to a SIPP, is that the usual route?

Albermarle

isayhello said:

Albermarle said:

The pension provider is less important than the investments you hold within the pensions.
So how your Pru pension is invested and how that fits with your other investments is the most important .

Separately you may look at alternative providers in terms of charges / ease of access/choice of investments.
A 'whole of market ' SIPP will offer thousands of funds  and other investments , but that just confuses many people and they will prefer something simpler ( maybe like the Pru pension) . It is really horses for courses .
Also transferring the Pru pension to your current workplace pension is usually an option.

I have invested the Pru pension in a few funds I've chosen, I was happy with them but the selection wasn't huge.

If I want to move this to another provider, for more options and cheaper costs, do I have to do it by transferring to a SIPP, is that the usual route?

If you really want a lot more options then you need to move it to a 'whole of market' SIPP that offers thousands of funds /ETF's /Investment Trusts/individual shares etc . The ones most often mentioned on here are Hargreaves Landsdown; Interactive Investor; Fidelity, AJ Bell and Iweb, but there others . 
Cheaper costs are not guaranteed - many workplace pensions have low costs .
All SIPPs have different charging structures , so what is best for one person is not best for another.

isayhello

Albermarle said:

If you really want a lot more options then you need to move it to a 'whole of market' SIPP that offers thousands of funds /ETF's /Investment Trusts/individual shares etc . The ones most often mentioned on here are Hargreaves Landsdown; Interactive Investor; Fidelity, AJ Bell and Iweb, but there others . 
Cheaper costs are not guaranteed - many workplace pensions have low costs .
All SIPPs have different charging structures , so what is best for one person is not best for another.

So the SIPP is just another wrapper like an ISA? and I can just transfer the existing pension to this?

But like you say, I may have lower costs with the Pru than with some of the other providers you mentioned but I will have more choice of investments.