Best Option for Cash Lump Sum

dunstonh

monikaewm said:

jimjames said:

monikaewm said:

Have you looked at IFAs that have a fixed fee menu? They will charge you a lot less than £4k.

ISA is a good start, but you're limited to £20k per person. My suggestion would be to put the rest in an investment bond which allows you take 5% each year without any tax liability. 

Why would you suggest an investment bond but not a pension? Especially when you mention higher rate tax payers.

It’s just because the original post suggests that he’s either got enough saved up in his pension pot and doesn’t want to put more in or is already taking income so may not be able to make any lump sum contributions 

Ok, lets follow on from your "suggestion".
1 - Which investment bond?  onshore of offshore?
2 - why not use the pension wrapper, ISA wrapper of unwrapped? 
3 - The OP is an inexperienced investor.  The fact they say they don't want to more in the pension wrapper is likely down to inexperience and not understanding tax wrappers. i.e. not a valid reason for going with a less efficient tax wrapper 

DoneWorking

Update

So much information to digest

I think I need to find an IFA or FA

Is it best to go with a big well known company or go with a small independent

Is this a bad time to be going into investments

Should I go fully ESG investments

Or take a more balanced investment approach

Finally

Is sticking with savings accounts and bonds really that bad

Yes my funds would reduce by inflation less the interest

But could this be preferable to the risk of losing out due to poor investment performance

DoneWorking

One other point

If I go for the investment option via an IFA how soon should I go with this

Immediately
Or within a year

dunstonh

I think I need to find an IFA or FA

Never an FA.   FAs are restricted and the most common restriction is that they offer own branded products and investments which are frequently more expensive and lower quality.

The choice should be to either to DIY or use an IFA.  

Is it best to go with a big well known company or go with a small independent

Most IFAs are small localised firms with 1-5 advisers with maybe one or two offices.      The larger ones tend to operate more as salesforces.

Is this a bad time to be going into investments

There is never a good time or a bad time.    

Should I go fully ESG investments

If that is your preference then yes.  If it's not then no.    ESG investing does typically mean paying more in charges and getting a lower return.   Although the gap in returns between ESG and conventional investing has been falling in recent years and many find the level acceptable.   

Is sticking with savings accounts and bonds really that bad

Cash savings does not have investment risk but it does have shortfall risk and inflation risk.   Put it in savings at 1% and inflation average of 3% and you are losing 2% a year in spending power.   That is the equivalent of a stockmarket crash every 10 years.   

So, whilst you may consider cash to be risk free because it doesn't zig zag in value like investments, it still suffers other risks.

That doesn't mean you need to go gung ho up the risk scale like some have suggested on this thread.  Risk is not on or off.   It is a sliding scale.  You can take a sensible level of risk.

Yes my funds would reduce by inflation less the interest
But could this be preferable to the risk of losing out due to poor investment performance

Time dilutes the overall risk.   Investments zig zag. So, if you invested for just a year, you would could lose out a lot. However, the longer you invest, the more you average out the ups and downs and move closer to the long term average.

So, for money you plan to spend in the next 5 years, you wouldn't invest that.  But for the money you don't plan to spend in the next 5 years, that would be sensible to consider investing.     Do you want the guarantee of losing money in real terms with cash or the possibility of losing money in real terms by using investments?

Albermarle

The risks of investing are unknown but history shows that in the long term they should outperform cash savings significantly .
The risks of staying in cash savings is more clear . In the long term they will definitely lose value . 

Have a look at these links .
Investing for beginners: Why do we invest? - Monevator

Long-term investing: Increasing your chances of positive returns (nutmeg.com)

eskbanker

Albermarle said:

The risks of investing are unknown but history shows that in the long term they should outperform cash savings significantly .
The risks of staying in cash savings is more clear . In the long term they will definitely lose value . 

Have a look at these links .
Investing for beginners: Why do we invest? - Monevator

Long-term investing: Increasing your chances of positive returns (nutmeg.com)

I think the second sentence should be caveatted in the same way as the first, i.e. history shows that in the long term cash should lose value to inflation - I agree that it's massively (>99%) likely in future but it's not an incontrovertible fact as such....

Albermarle

eskbanker said:

Albermarle said:

The risks of investing are unknown but history shows that in the long term they should outperform cash savings significantly .
The risks of staying in cash savings is more clear . In the long term they will definitely lose value . 

Have a look at these links .
Investing for beginners: Why do we invest? - Monevator

Long-term investing: Increasing your chances of positive returns (nutmeg.com)

I think the second sentence should be caveatted in the same way as the first, i.e. history shows that in the long term cash should lose value to inflation - I agree that it's massively (>99%) likely in future but it's not an incontrovertible fact as such....

OK , I like a good caveat .

grumiofoundation

Albermarle said:

eskbanker said:

Albermarle said:

The risks of investing are unknown but history shows that in the long term they should outperform cash savings significantly .
The risks of staying in cash savings is more clear . In the long term they will definitely lose value . 

Have a look at these links .
Investing for beginners: Why do we invest? - Monevator

Long-term investing: Increasing your chances of positive returns (nutmeg.com)

I think the second sentence should be caveatted in the same way as the first, i.e. history shows that in the long term cash should lose value to inflation - I agree that it's massively (>99%) likely in future but it's not an incontrovertible fact as such....

OK , I like a good caveat .

Always..? 

xylophone

You might try

https://adviserbook.co.uk/

When the menu comes up, (left hand side) you can tick "confirmed independent" and any other specialisms which are relevant to your situation.

You can then ring round to check fees etc.

DoneWorking

Thanks all

My big concern is that if I go with an IFA using ESG investments I may end up paying up to 2% costs with a return which is not high enough to cover inflation

This option has the possible risk of loss of funds

I understand that leaving my fund in cash savings and bonds will only generate a return that is less than inflation

This would give a guaranteed drop of about 2% plus each year depending on inflation rate

Equating to a stock market crash after ten years

Really difficuilt to decide which way to go

Investment with risk and potential loss or gain

Savings/Bonds with certain loss