What to do with £200,000

older_and_no_wiser

sebtomato said:

aroominyork said:

It is right to worry that with inflation at 10% your £100k will be worth little more than £90k in a year, but like other people have said this is too short a time period for investing in a risk asset. However if, as you think will happen, house prices fall by the time you buy a property, you will be protected from some of that loss.

Even if inflation is 10%, his £100K might still be worth £100K to him...

Inflation at 10% is a very generic concept, where most people will have different circumstances.

Groceries might be worth 10% more in a year's time, but he may not buy £100K of groceries.

This is a great point! Most of the inflation metrics seem to be coming from the rise in energy and fuel costs. If someone does very few miles in their car (or doesn't own one) and is very careful with their home energy consumption, then their personal inflation level may be a lot less. Same issue with grocery shopping. I do realise of course that energy and fuel costs also have that knock-on effect with many other areas of personal finance and expenses.

Personally speaking, my living expenses haven't really risen at all in the last 6 months. If anything, they have gone down as I'm more wary of inflation and living (even) more within my means. As a result I'm managing to slightly increase the amount I can invest/save each month. 

The thing that impacts me the most is seeing my pension and investments dropping over the last few months. I'm trying not to follow these too closely currently as this is only notionally money until I need it during retirement which isn't happening for several years. I'm using this period of market lows to ensure I keep investing as much as possible. It's sale time.