Best Option for Cash Lump Sum

Audaxer

DoneWorking said:

Thanks guys 
I find this all so interesting

I'm yet another person new to retirement and trying to protect a lifetimes savings from inflation

I also suffer from anxiety and I must admit this gives me a few problems getting back to sleep if I wake up too early

I'd really appreciate any further advice 

And thanks for not giving me a hard time

I can understand your anxiety in setting it all up as it is a lot to invest. If it was all invested in a medium risk multi asset fund with say 60% equities, would you be able to cope with an immediate equity crash, which could see the fund fall 20% or more pretty quickly. There is nothing wrong with such a fund as equity crashes happen from time to time, but over the long term it should beat inflation - you just have to be prepared for some volatility and not panic when it happens. 

I think you are right to take your time, learning as much as you can about investments meantime. I would also take a cautious approach and not invest it all at once.

GeoffTF

We have just been discussing the investment angle here. You have said you have £400K, which you do not need to 10 years. A some of that can be fed into ISAs: 2 x £20K per year. Can you put money into a pension? What is your state pension situation? Health? There are lots of potential questions. I have said that looking after your investments is something you can profitably do yourself. Nonetheless, it might be advantageous to engage an FA on a one-off basis. There is no shortage of them. You should be able to find one who will do a financial review for a reasonable price. I would expect to pay £hundreds rather than £thousands, but you will not know until you start shopping around.

P933alilli

VLS60 went up 0.62% again yesterday!
   An increase of 1.06% on the two days since i bought units as a S&S isa in the fund!
I'm drip-feeding £500 per month atm but considering whether or not to put my remaining 19.5 k in before April 6th.
 Then again i could continue dripfeeding and also open an ordinary cash isa as long as i dont go over the 20k quota in total.
  'If' inflation doesnt remain high cash isas could still be useful. Ive been looking at the monthly inflation rates since August 2016 when i opened my last 5 year cash isa and discovered that on 28 of those months the 1.88% interest paid on the account was above inflation so it did do better than i expected!

eskbanker

Collyflower1 said:

'If' inflation doesnt remain high cash isas could still be useful. Ive been looking at the monthly inflation rates since August 2016 when i opened my last 5 year cash isa and discovered that on 28 of those months the 1.88% interest paid on the account was above inflation so it did do better than i expected!

So the interest was below inflation for 32 months (i.e. the majority, albeit a small one) then?

P933alilli

Yes, not great for building wealth but when i look closely at the month by month interest rate it ended up +2.52%/60. So, beating inflation by  +0.042%!

eskbanker

Collyflower1 said:

Yes, not great for building wealth but when i look closely at the month by month interest rate it ended up +2.52%/60. So, beating inflation by  +0.042%!

Depends on your definition of inflation, I suppose, but on the face of it the ISA is unlikely to have outperformed inflation on a total return basis over that period, if using CPI.

The index was 100.898 in August 2016 and 112.085 in August 2021, so an increase of just over 11%.

1.88% compounded over five years is 9.76%....

GeoffTF

Collyflower1 said:

VLS60 went up 0.62% again yesterday!
   An increase of 1.06% on the two days since i bought units as a S&S isa in the fund!
I'm drip-feeding £500 per month atm but considering whether or not to put my remaining 19.5 k in before April 6th.
 Then again i could continue dripfeeding and also open an ordinary cash isa as long as i dont go over the 20k quota in total.
  'If' inflation doesnt remain high cash isas could still be useful. Ive been looking at the monthly inflation rates since August 2016 when i opened my last 5 year cash isa and discovered that on 28 of those months the 1.88% interest paid on the account was above inflation so it did do better than i expected!

VLS 60 includes 40% bonds to reduce risk. If you are too sacred to fill your ISA allowance in one go, perhaps that is too racy for you. Perhaps you would be using VLS 40 or VLS 20. I have no idea what your personal circumstances are. I am not offering advice as to what is an appropriate level of risk for you.

P933alilli

Just being a bit tentative atm and wanting to get a feel for things and how everything works with everything being new to me! 
I can put 20k in which i wont be needing for 7-10 years probably. I'm also just debating whether or not i could take more risk with the FTSE global all cap fund as an isa from the new tax year and going halves with the VLS60!

Thrugelmir

Collyflower1 said:

Just being a bit tentative atm and wanting to get a feel for things and how everything works with everything being new to me! 
I can put 20k in which i wont be needing for 7-10 years probably. I'm also just debating whether or not i could take more risk with the FTSE global all cap fund as an isa from the new tax year and going halves with the VLS60!

Options inbetween are available. 

P933alilli

All world ucits ETF or VLS80?