What to do with £110,000.

Linton

nortong said:

Thank you all so much for your suggestions, I just want the money to grow as much as possible, I have no plans to spend it on myself rather for it to appreciate so that I can pass it on to my children. Having said that I also need to bear in mind that we cannot anticipate what's round the corner.

Rather than stipulating investing or saving I was really meant the best return, whatever the method. Incidentally, is compounded interest which is re-invested treated as income and subject to tax or is tax only levied if the interest is paid out?

The danger of going for the best return with investments is that higher returns generally mean higher risk.  Risk for example from an early major crash when you could end up with less mony than when you started.  So you need a suitable balance.  Taking no risk at all you can use cash savings which probably wont match inflation.  Take too much risk and you could have your final years blighted by stress and worry about the value of your investments. 

You need to distinguish between interest which comes from cash or bonds, dividends which come from payouts from the companies you hold shares in, and capital gains caused by increases in the price of those shares.

 - Interest is taxed under income tax in much the same way as interest from cash savings whether reinvested or not.
 - Dividends are taxed under income tax when they are deemed to have been paid out with some allowances similar to those for interest.  Again it makes no difference whether the dividend is reinvested or not.
 - Capital Gains tax is only due when you sell investments and is based on the difference in price between when you bought and when you sold.  There is a separate allowance of £12300

Tax can be complex for investments and so it is strongly recommended that they are kept in an S&S (Stocks& Shares) ISA thus avoiding any tax at all and all the hassle of working it out and paying it.

Newly_retired

I would say I am in a pretty similar position. Agreed you never know what is round the corner, but I have no great need to access most of my savings. Some will be spent as and when ( holidays, car costs, house maintenance / replacements etc ), but most will either be left to my heirs or used up if I eventually need care.
It needs quite an accessible float, but Regular Savers make up a proportion of my savings as their interest rates are better than most ( see separate thread for more information ). I also use ISAs for tax reasons, then at the moment I have quite a bit in accessible cash waiting for interest rates to settle somewhat, before moving into fixed rate accounts. ISAs also have the advantage that you can make withdrawals if needed, albeit losing some interest, whereas fixed rate accounts you can't. 
Hope this helps

Millyonare

For me, I'd spend £40k on an Aston Martin, save £50k on a global stockmarket tracker (like VWRL), and keep £20k in a 2% easy access saver (like Al Rayan bank). Enjoy that spare retirement cash.

Not investment advice, etc. Dyor.

Albermarle

Newly_retired said:

I would say I am in a pretty similar position. Agreed you never know what is round the corner, but I have no great need to access most of my savings. Some will be spent as and when ( holidays, car costs, house maintenance / replacements etc ), but most will either be left to my heirs or used up if I eventually need care.
It needs quite an accessible float, but Regular Savers make up a proportion of my savings as their interest rates are better than most ( see separate thread for more information ). I also use ISAs for tax reasons, then at the moment I have quite a bit in accessible cash waiting for interest rates to settle somewhat, before moving into fixed rate accounts. ISAs also have the advantage that you can make withdrawals if needed, albeit losing some interest, whereas fixed rate accounts you can't. 
Hope this helps

The issue here is that with everything in cash , even at relatively good interest rates, the value of your savings is being eaten away by inflation. Normally it is better to have a balance between savings for the short & medium term and investments for the long term. 

Thank you all so much for your suggestions, I just want the money to grow as much as possible, Don't we all !

Often on this forum we often get asked ' How can I get  maximum growth for minimum risk?'

I am afraid the answer is always ''only in your dreams' . As Linton explained going for maximum growth means taking maximum short to medium term risk..... Only in the long term ( > 10 years ) does this equation start to become less valid.

nortong

Newly_retired said:

I would say I am in a pretty similar position. Agreed you never know what is round the corner, but I have no great need to access most of my savings. Some will be spent as and when ( holidays, car costs, house maintenance / replacements etc ), but most will either be left to my heirs or used up if I eventually need care.
It needs quite an accessible float, but Regular Savers make up a proportion of my savings as their interest rates are better than most ( see separate thread for more information ). I also use ISAs for tax reasons, then at the moment I have quite a bit in accessible cash waiting for interest rates to settle somewhat, before moving into fixed rate accounts. ISAs also have the advantage that you can make withdrawals if needed, albeit losing some interest, whereas fixed rate accounts you can't. 
Hope this helps

Yes, that does help and Linton's advice is very sound.

I forgot to mention in my opening post that Vanguard's Life Strategy funds looks interesting does anyone think they could be relevant to my situation?

Albermarle

I forgot to mention in my opening post that Vanguard's Life Strategy funds looks interesting does anyone think they could be relevant to my situation?

A low cost multi asset fund could be a good choice. As well as the one you mention, you could also look at 

HSBC global strategy funds

Blackrock Mymap funds

Fidelity multi asset allocator funds

In all cases they have a range of risk levels to suit each investor. Personally I would avoid the very low risk/cautious ones though,