Where would you Invest £550,000 inheritance for at least 6 years until entitlement

Invest987

Just thinking about my original post and in 3 years that £550k is now £621. Is anyone surprised? Anything i should do for the last 2 years before my children get the money? 

Linton

Invest987 said:

Just thinking about my original post and in 3 years that £550k is now £621. Is anyone surprised? Anything i should do for the last 2 years before my children get the money? 

How is it invested? The money should certainly now be 100% cash or equivalent and in my view should have been from the start.

Are the children sufficiently prepared to manage a very large lump sum?

aroominyork

Linton said:

Invest987 said:

Just thinking about my original post and in 3 years that £550k is now £621. Is anyone surprised? Anything i should do for the last 2 years before my children get the money? 

How is it invested? The money should certainly now be 100% cash or equivalent and in my view should have been from the start.

If it was in a savings/MMF account averaging 4.15% - pretty much the average BoE base rate over the last three years - it would have grown from £550k to £621k. 

Linton said:

Are the children sufficiently prepared to manage a very large lump sum?

Not if they learn financial management from this parent. (Sorry, OP - harsh but true.)

Bostonerimus1

I'd probably just put it in a high interest saving account and talk to the beneficiaries about it. This will be a risk free, CYA move. Make sure they are prepared to take more risk when they get access to it and have a longer time horizon. Then I would be using the money to fund SIPPS and ISAs and probably invest in something like VLS60 or VLS80 for the long term while also putting as much as possible into company pension funds.

If they follow this flow chart they won't go far wrong.

https://ukpersonal.finance/flowchart/

Read this and take it to heart.

https://www.bogleheads.org/wiki/Investing_from_the_UK

Invest987

Linton said:

Invest987 said:

Just thinking about my original post and in 3 years that £550k is now £621. Is anyone surprised? Anything i should do for the last 2 years before my children get the money? 

How is it invested? The money should certainly now be 100% cash or equivalent and in my view should have been from the start.

Are the children sufficiently prepared to manage a very large lump sum?

A varied portfolio in stocks shares and bonds....have measured against others and fairly typical given the markets in last 3 years. I have to be honest and am not an expert. Took 3 opinions and had hoped it grew more.  In the 3 years gone by one is already at 22 a higher rate tax payer has done superbly well, managed, planned and made really great financial decisions so far and the other having won a global award whilst doing a degree apprenticeship will be one an amazing salary in 18 months time. My Son is also really financially aware and both I know will respect the kind gift that was made to them. 

Invest987

aroominyork said:

Linton said:

Invest987 said:

Just thinking about my original post and in 3 years that £550k is now £621. Is anyone surprised? Anything i should do for the last 2 years before my children get the money? 

How is it invested? The money should certainly now be 100% cash or equivalent and in my view should have been from the start.

If it was in a savings/MMF account averaging 4.15% - pretty much the average BoE base rate over the last three years - it would have grown from £550k to £621k. 

Linton said:

Are the children sufficiently prepared to manage a very large lump sum?

Not if they learn financial management from this parent. (Sorry, OP - harsh but true.)

Honesty is the best policy and always willing to take advice. However like I said on previous post.....In the 3 years gone by one is already at 22 a higher rate tax payer has done superbly well, managed, planned and made really great financial decisions so far and the other having won a global award whilst doing a degree apprenticeship will be one an amazing salary in 18 months time. My Son is also really financially aware and both I know will respect the kind gift that was made to them. 

Heedtheadvice

Even more reason to get them involved...?

Linton

Invest987 said:

Linton said:

Invest987 said:

Just thinking about my original post and in 3 years that £550k is now £621. Is anyone surprised? Anything i should do for the last 2 years before my children get the money? 

How is it invested? The money should certainly now be 100% cash or equivalent and in my view should have been from the start.

Are the children sufficiently prepared to manage a very large lump sum?

A varied portfolio in stocks shares and bonds....have measured against others and fairly typical given the markets in last 3 years. I have to be honest and am not an expert. Took 3 opinions and had hoped it grew more.  In the 3 years gone by one is already at 22 a higher rate tax payer has done superbly well, managed, planned and made really great financial decisions so far and the other having won a global award whilst doing a degree apprenticeship will be one an amazing salary in 18 months time. My Son is also really financially aware and both I know will respect the kind gift that was made to them. 

You accept the risk that there may be a significant stock market crash between now and when the money is distributed? Would the children be upset?

Invest987

Heedtheadvice said:

Even more reason to get them involved...?

I agree. This year has proved they are both financially responsible. I will be telling then a year early so that they can adjust and be part of the decision making. 

Invest987

Linton said:

Invest987 said:

Linton said:

Invest987 said:

Just thinking about my original post and in 3 years that £550k is now £621. Is anyone surprised? Anything i should do for the last 2 years before my children get the money? 

How is it invested? The money should certainly now be 100% cash or equivalent and in my view should have been from the start.

Are the children sufficiently prepared to manage a very large lump sum?

A varied portfolio in stocks shares and bonds....have measured against others and fairly typical given the markets in last 3 years. I have to be honest and am not an expert. Took 3 opinions and had hoped it grew more.  In the 3 years gone by one is already at 22 a higher rate tax payer has done superbly well, managed, planned and made really great financial decisions so far and the other having won a global award whilst doing a degree apprenticeship will be one an amazing salary in 18 months time. My Son is also really financially aware and both I know will respect the kind gift that was made to them. 

You accept the risk that there may be a significant stock market crash between now and when the money is distributed? Would the children be upset?

I know it weighs heavy but actually following the wishes of the person who left it to them.