Where To Invest For Monthly Income

woodbine66

I have approx £170,000 that I would like to invest somewhere with lowish risk to maximise monthly income. UBL UK offers a  fixed term deposit account that would pay 1.85% % if I tied the money up for 3 years. Would anyone else be able to offer a better monthly income on this money? I was thinking of getting advice from someone like Hargreaves Landsdown, would this be a good idea and would they be able to offer better income for an investment with low risk?

Many thanks for any help and advice.

cx6

Not even remotely confusing. Fixed term will generate a monthly income and the interest on product you mention can be paid out monthly so would fit your needs.

However, inflation is higher than that and interest rates are predicted to rise so do you want to lock yourself in for 3 years at this point?

Thrugelmir

What's the future use for the money? 

dunstonh

I was thinking of getting advice from someone like Hargreaves Landsdown, would this be a good idea and would they be able to offer better income for an investment with low risk?

Generally, the choice should be between DIY or use an IFA.  Not use FA/sales reps.

When it comes to providing a monthly income, every single option carries risk.   Using a savings account paying 1.85% is high risk.    It doesn't suffer investment risk but it has shortfall risk and inflation risk.   That £170,000 would have the spending power of about £110,000 in 10 years time. The income of £3145 pa would have the spending power of around £2100 a year.   It wouldn't be long before you need to start dipping into it to pay for things and then it produces less interest and you end up in a spiral where the balance goes down on a continuous basis until ultimately runs out.

Investments have investment risk but less risk of shortfall and inflation risk.    

So, you need to pick your risks.

The likes of Hargreaves Lansdown etc are investment platforms, advice? possibly general advice is available via the websites, advice on how to invest for a better income! Join the queue!!

HL have a restricted FA (not IFA) service. They use their own branded platform and funds.

jimjames

Just as an example of an investment that could pay a better return that a savings account (but purely an example, not recommendation) you have an investment trust like this paying 4.6% dividends at present. Obviously this is an investment so the capital value will vary and unlike savings is not guaranteed but it sounds like you are considering options that include capital risk. There are investment trusts that have raised their dividends for over 40 years so long term records although again it's not guaranteed.

https://www.hl.co.uk/shares/shares-search-results/c/city-of-london-investment-trust-ord-25p

If you're prepared to tie money up for 5 years plus then investing at least some of it would seem to make sense to get better income.

xylophone

If you want to consider the investment option and do not have the confidence to DIY, you could consider consulting an IFA.

https://adviserbook.co.uk/

Tick "confirmed independent" and other boxes relevant to your requirements.

Then you ring round to discuss service and fees.

Or you might consider parking the money in a couple of  accounts at the best interest rates you can find while you do some reading and research.

https://www.amazon.co.uk/DIY-Simple-Investing-Guide-Effective-ebook/dp/B00YPF6RCQ

Assuming that you haven't used your ISA allowance for this year, you might open a stocks and shares ISA and contribute £20,000 before 5 April and then £20,000 afterwards.

You might choose funds offering a monthly or quarterly income or perhaps investments trusts.

https://moneytothemasses.com/saving-for-your-future/investing/the-best-stocks-and-shares-investment-isa-the-cheapest-fund-platform

woodbine66

Thanks to all who replied, and apologies for lare reply. One or two things to consider.

woodbine66

Thrugelmir said:

What's the future use for the money? 

Ni immediate plans so far. It was an inheritance which is earning next to zero in a deposit account at present. Like many people these days, would like to boost my income and make the money work harder.

woodbine66

jimjames said:

Just as an example of an investment that could pay a better return that a savings account (but purely an example, not recommendation) you have an investment trust like this paying 4.6% dividends at present. Obviously this is an investment so the capital value will vary and unlike savings is not guaranteed but it sounds like you are considering options that include capital risk. There are investment trusts that have raised their dividends for over 40 years so long term records although again it's not guaranteed.

https://www.hl.co.uk/shares/shares-search-results/c/city-of-london-investment-trust-ord-25p

If you're prepared to tie money up for 5 years plus then investing at least some of it would seem to make sense to get better income.

Thanks for the HL example you have given. It was along the lines of what I have considered, but didn't know where to start.. Presumably this investment trust is like a unit trust where I make an investment that is put into a spread of shares? A few questions -

1) Would the returns on the HL example be a reasonably good return for this type of investment?

2) On a scale of one to 10, 10 being highest risk - where would this type of investment be?

3) Is now a good time to be investing in shares based investments (pandemic, Brexit, inflation, etc, etc)?

4) Is there a minimum investment?

5) Is there a minimum term to hold the investment?

6) Are there fees to buy and sell the investment?

7) Presumably there are fees to be deducted from the quarterly dividend?

8)  Are there other companies and investment trusts to consider?

9) I know nothing of ISAs, could I hold £20,000 of this type of investment trust in one?

10) Is it common to lose some of your investment when selling an investment trust?

Audaxer

woodbine66 said:

jimjames said:

Just as an example of an investment that could pay a better return that a savings account (but purely an example, not recommendation) you have an investment trust like this paying 4.6% dividends at present. Obviously this is an investment so the capital value will vary and unlike savings is not guaranteed but it sounds like you are considering options that include capital risk. There are investment trusts that have raised their dividends for over 40 years so long term records although again it's not guaranteed.

https://www.hl.co.uk/shares/shares-search-results/c/city-of-london-investment-trust-ord-25p

If you're prepared to tie money up for 5 years plus then investing at least some of it would seem to make sense to get better income.

Thanks for the HL example you have given. It was along the lines of what I have considered, but didn't know where to start.. Presumably this investment trust is like a unit trust where I make an investment that is put into a spread of shares? A few questions -

1) Would the returns on the HL example be a reasonably good return for this type of investment?

2) On a scale of one to 10, 10 being highest risk - where would this type of investment be?

3) Is now a good time to be investing in shares based investments (pandemic, Brexit, inflation, etc, etc)?

4) Is there a minimum investment?

5) Is there a minimum term to hold the investment?

6) Are there fees to buy and sell the investment?

7) Presumably there are fees to be deducted from the quarterly dividend?

8)  Are there other companies and investment trusts to consider?

9) I know nothing of ISAs, could I hold £20,000 of this type of investment trust in one?

10) Is it common to lose some of your investment when selling an investment trust?

This investment trust is not exclusive to HL - it can be held on HL as well as a number of other platforms. City of London IT is a popular investment trust for retirees in particular as it pays a dividend which has increased each year for decades. I hold this IT as part of my portfolio along with other ITs and funds, but it only accounts for a small percentage of my portfolio. Not many people would consider investing all their money in any one IT. 

Looking at your questions, I think you need to do your own research on ITs, funds and investing in general, before actually doing any investing. I would suggesting learning all you can about investing on sites such as Monevator. You could also consider low cost, globally diversified multi asset funds which are explained on Monevator and also discussed a lot on this forum.