How to invest 35000 for a small regular income

eskbanker

kassy64 said:

Opening poster mentions nothing about protecting the £35k against inflation (which is probably impossible in todays climate) just wants to ‘give him/herself a small monthly income’.

But OP has an important decision to make regarding whether to save in a capital-protected deposit account or to invest in something with a different risk profile (i.e. it's not 'risk' versus 'no risk'), so it's only right that adequate information is supplied to support that decision - many think of risk in a very one-dimensional way but it really isn't as simple as that, so it's perfectly legitimate to explore what OP's priorities really are, as bunging the pot into a deposit account may not be the optimal solution....

silverwhistle

OP, would having that amount impact any benefits you might receive?

An additional approach might also be to spend some money on reducing your outgoings, so increasing insulation, buying LED lights, fix a draughty back door sort of thing. With your own house and a southish facing roof you might even contemplate solar panels and there are plenty on these boards who have them and can give unbiased advice.

Millyonare

As always, it comes down to one's personal appetite for "risk".

Some rough examples.

* Low risk = savings bank account (like UBI)... 3%... £100 a month

* Mid risk = established investment trust (like CTY)... 6%... £175 a month

* High risk = established income fund (like HFEL)... 9%... £250 a month

Not investment advice. Dyor, etc.

Robin9

silverwhistle said:

OP, would having that amount impact any benefits you might receive?

An additional approach might also be to spend some money on reducing your outgoings, so increasing insulation, buying LED lights, fix a draughty back door sort of thing. With your own house and a southish facing roof you might even contemplate solar panels and there are plenty on these boards who have them and can give unbiased advice.

I agree -  but perhaps take that holiday.  Then invest in your property

EthicsGradient

If we really are to take inflation into account, then a full assessment of all the OP's finances is needed - what rate are they currently paying on the mortgage, how long (if any time) is that fixed, might they downsize at some time, do we think it's reasonable to assign the same future rate of inflation to house prices as general inflation or should a different one be guessed at, do they have a pension becoming available at some time, could they use a lump sum from that to help repay the mortgage before it is due to be fully repaid, etc.

kassy64

I think you guys are overthinking this. He/she has an inheritance and wishes it to provide a ‘small regular income’. A fixed rate savings bond for length of time determined by OP which pays monthly interest is probably the best bet and security. 

Albermarle

kassy64 said:

Opening poster mentions nothing about protecting the £35k against inflation (which is probably impossible in todays climate) just wants to ‘give him/herself a small monthly income’.

It is true that in 2022 and probably 2023, keeping up with inflation by any means is going to be very difficult ( NS&I index linked bonds and most public sector pensions being two exceptions)
However in the medium/long term, investments should have a better chance of keeping up with inflation than cash savings.
Although It is not impossible that inflation will drop quickly at some point and some cash savings interest rates could be above inflation at that point.
Seems crazy to say that now, but there have been past periods when savings interest have been higher than inflation. Not for quite a long time though, probably the last time was around 2009.

eskbanker

kassy64 said:

I think you guys are overthinking this. He/she has an inheritance and wishes it to provide a ‘small regular income’. A fixed rate savings bond for length of time determined by OP which pays monthly interest is probably the best bet and security. 

That's undoubtedly one option, but what leads you to the conclusion that it's "probably the best bet", in the absence of any further information about OP's financial circumstances, etc?

kassy64

Ok, it may not be the best bet but it’s ‘an’ option. 

Rather than go on and on about inflation etc give some examples how the OP can get a small monthly return on their £35k which was the original request made. Once he/she has some options they can make a more informed decision. 

xylophone

The OP (assuming no contributions to ISA this tax year) could perhaps open a stocks and shares ISA and buy a fund offering monthly income?

After the iweb £50 set up fee and then the £5 to buy a fund there are no charges to maintain or for paying out the income.

https://www.iweb-sharedealing.co.uk/our-accounts/account-opening-offer.html?utm_source=GOOGLE&utm_medium=paid+search&utm_campaign=UK_Brand_iWeb_Share+Dealing_Product+Brand_Exact&utm_term=iweb+isa&utm_adgroup=UK_Brand_iWeb_Share+Dealing_ISA_Exact&&WT.mc_id=43700070126821232&WT.srch=1&gclid=EAIaIQobChMIkvqExJK6-QIVxprVCh0pNgryEAAYASAAEgL0vfD_BwE&gclsrc=aw.ds

The balance could be saved in an account offering the best rate she can find?