70K to invest.. what to do?

SupaWales

Hello, new here.

Like most forums I expect this sort of question gets asked regularly!
I've had a quick look at responses to similar questions and aside from the debates over who's right & who's wrong answer wise, I don't understand some of the terminology used.

What would you do with £70K to invest?
I already have ISA's at £20K each for myself & wife.
I would like to take some income from the profits.
I'm still working & paying basic rate tax, my wife is not working.
I retire in January 2025.

Thanks in advance!

 

SupaWales

I forgot to add that I'm mortgage free.

bostonerimus

Do a detailed budget so you can see where you might save money going into retirement
Pay off high interest debt
Then put money in the bank so that you have at least a year's cash spending to ride out down turns and just for cash flow.
Then consider making extra pension and/or ISA payments Invest in low cost multi-asset funds or a portfolio of a few diversified index funds.

Where is your retirement income coming from?

xylophone

Are you currently contributing to a pension? If so, what kind?

Have you and your wife obtained state pension forecasts?

https://www.gov.uk/check-state-pension

MEM62

How much headroom do you have in your pension allowance?  There are tax advantages to maxing out your contributions for the year.  Other than that, if you ISA allowance is used up, I would look at equities in a general investment account.  Funds from this can be moved to your ISA in the next tax year.     

george4064

Max out pension allowance, otherwise invest in GIA ready to Bed & ISA at first available opportunity.

Kansuwan

@ bostonerimus,
IMO an emergency cash fund with at least a year's cash is extreme, most recommend a fund with 3 - 6 month's cash. As a basic rate tax payer the OP may need to possibly keep back around the 50K of the 70K available for investing.

jimjames

SupaWales said:

What would you do with £70K to invest?
I already have ISA's at £20K each for myself & wife.
I would like to take some income from the profits.
I'm still working & paying basic rate tax, my wife is not working.
I retire in January 2025.

You can each invest £20k per year in an ISA so do you mean you've already added £20k this year or is the overall total £20k? If so and you haven't added any money since 6 April then you have a new allowance to use which could take £40k of that money (£20k each). As above pension could be an option for some of it too if you have emergency funds sorted out.

tebbins

Kansuwan said:

@ bostonerimus,
IMO an emergency cash fund with at least a year's cash is extreme, most recommend a fund with 3 - 6 month's cash. As a basic rate tax payer the OP may need to possibly keep back around the 50K of the 70K available for investing.

3-6 months is often cited as the "how to start saving" number, there's nothing wrong with accumulating more cash if you feel it's appropriate to your circumstances and risk appetite - the interest rate on Chase's easy access account is higher than short-term gilts for instance, possibly higher than mid-term gilts after costs, bearing in mind the volatility. VGOV is already down 9.5% in capital terms ytd.

VKE

SupaWales said:

Hello, new here.

Like most forums I expect this sort of question gets asked regularly!
I've had a quick look at responses to similar questions and aside from the debates over who's right & who's wrong answer wise, I don't understand some of the terminology used.

What would you do with £70K to invest?
I already have ISA's at £20K each for myself & wife.
I would like to take some income from the profits.
I'm still working & paying basic rate tax, my wife is not working.
I retire in January 2025.

Thanks in advance!

 

A couple of things we have done following my redundancy and I'm not working but husband is:
Given 10% of my tax allowance to my husband; short conversation with HMRC and all sorted
Have moved a higher amount of our savings into various accounts held in my name

Majority of our cash is held in easy access acounts paying higher rates of interest:
Chase
Zopa
Cynergy
Virgin
Tandem
Atom
Marcus; small £ due to better % in those listed above

As I'm not working I track all our accounts and the interest rates and gone are the days of loyalties to the bank; we move £ based  on as and when there is a % increase ~ now this can all be done online it is so much easier. We do have a few accounts where we're fixed/notice accounts where the rates are now NOT so great and as there has been better rates recently we're not going to act too soon as we think there will more increases in the coming weeks

Thrugelmir

Kansuwan said:

@ bostonerimus,
IMO an emergency cash fund with at least a year's cash is extreme, most recommend a fund with 3 - 6 month's cash. As a basic rate tax payer the OP may need to possibly keep back around the 50K of the 70K available for investing.

Never borrow money (other for property purchase), save and spend cash instead. Pay upfront rather than spread the cost.  There's always a major item of expenditure on the horizon.