£20k - what to do with it?

rach2008

Whack in the instant access Chase account paying 1.5% until you decide. Or take a bit more risk in a p2p account (I like bridging loans, earn c. 7%). Get cashback too with these. The full 20k can go into an ISA so it is tax exempt.

agent69

rach2008 said:

Whack in the instant access Chase account paying 1.5% until you decide. Or take a bit more risk in a p2p account (I like bridging loans, earn c. 7%). Get cashback too with these. The full 20k can go into an ISA so it is tax exempt.

I assume you are joking?

Dazed_and_C0nfused

jpsartre said:

El_Torro said:

If you are currently a higher rate tax payer and you plan to retire at 58 or later it makes sense to put the money in your pension. If you contribute to a pension via salary sacrifice it makes sense to up your contributions and use the £20k to live off. Then when the money runs out reduce your contributions. 

If you are a basic rate tax payer and you want to access some money before you're 58 then a Stocks & Shares ISA might make more sense than a pension. Depends on your circumstances, you haven't given us much to go on.

If you invest in a global tracker or multi asset fund then a 25 year horizon should see very healthy returns. There will be a lot of volatility during those 25 years (both up and down) so whether that's low risk in the long term or not is up to you to decide. Investing in a fund that is globally diversified also requires very little participation on your part.

Thanks, that's very helpful info. I'm 43 and don't plan to retire until my late 60s. I'm happy to leave the money alone until then. I'm a basic rate tax payer although my wife pays the higher tax rate so it might make sense to up her pension contributions (I realise this means I'm effectively handing over the money to her).

How does one go about investing in a "global tracker or multi asset fund"? Is it something my bank can do for me?

To answer some of the other questions - my current pension saving basically is the 20k. I've not had a pension contributing income for many of my adult years (relatively speaking) due to postgrad studies and other circumstances. I've now in a position where I'm much more financially stable with a higher income (again, relatively speaking) and more secure employment where I'm contributing towards my pesion but I'm conscious of the fact that I need to start thinking about the future.

You can usually get a 6.25% return just for picking the pension option.  Before any investment gains (or losses).

You might want to keep some back for a rainy day fund but let's say you add £15k to a SIPP (assuming you earn enough to be eligible to do so).  That will become £18,750 with the basic rate tax relief added.

When you come to take it as a pension 25% will be tax free and the rest taxable.  If you are a basic rate taxpayer when taking the money out that means you get £4,687.50 tax free and £14,062.50 is taxable, £11,250 after basic rate tax had been paid.

£4,687.50 + £11,250 = £15,937.50 after tax.

If you can take it all out in tax years where you have unused Personal Allowances then you can turn £15,000 into £18,750.

Thrugelmir

Owe money on the mortgage?  Pay the debt down. Will provide a guaranteed return. 

rach2008

agent69 said:

rach2008 said:

Whack in the instant access Chase account paying 1.5% until you decide. Or take a bit more risk in a p2p account (I like bridging loans, earn c. 7%). Get cashback too with these. The full 20k can go into an ISA so it is tax exempt.

I assume you are joking?

Nope. Been in p2p for years not lost a penny. 

ColdIron

rach2008 said:

Or take a bit more risk in a p2p account (I like bridging loans, earn c. 7%).

Poor suggestion when the OP asked for

jpsartre said:

Basically I'm looking for:

• a long term investment, 20-25 years.
• something that's low-risk in the long term.
  
• something that requires minimal participation on my part

agent69

rach2008 said:

agent69 said:

rach2008 said:

Whack in the instant access Chase account paying 1.5% until you decide. Or take a bit more risk in a p2p account (I like bridging loans, earn c. 7%). Get cashback too with these. The full 20k can go into an ISA so it is tax exempt.

I assume you are joking?

Nope. Been in p2p for years not lost a penny. 

And do you think your experience is typical of P2P investing?

Curious which platforms you have invested in if you have never had a any defaulted loans that didn't repay in full

jpsartre

Thrugelmir said:

Owe money on the mortgage?  Pay the debt down. Will provide a guaranteed return. 

I do still own on my mortgage and was thinking of that option but I was hoping I would be able to get a higher return than the rate I pay on my mortgage.

rach2008

agent69 said:

rach2008 said:

agent69 said:

rach2008 said:

Whack in the instant access Chase account paying 1.5% until you decide. Or take a bit more risk in a p2p account (I like bridging loans, earn c. 7%). Get cashback too with these. The full 20k can go into an ISA so it is tax exempt.

I assume you are joking?

Nope. Been in p2p for years not lost a penny. 

And do you think your experience is typical of P2P investing?

Curious which platforms you have invested in if you have never had a any defaulted loans that didn't repay in full

I think it is typical of some types of P2P yes. If you research and understand how the platforms work. Check out the default rates with Kuflink, Easy Money, Loanpad... To my knowledge no investor has lost any money on these. However diversify risk by investing in multiple loans. By comparison I have lost money in my SS investments/pensions.

Daliah

rach2008 said:

 By comparison I have lost money in my SS investments/pensions.

If you have held your SS investments/pensions for several years and have lost money in them, I would suggest your selection of investments hasn't been the best. If you were invested in a global multi-asset fund, you'd not run at a loss.