Investment advice

AAZ

My partner dad has gifted her 80K and we are wondering what is the best way to invest it. She has a good employer pension scheme and although we have a big morgage liability currently we want to invest in some liquid asset so we can withdraw in financial emergency. 
Any advice much appreicated 

grumiofoundation

Firstly no-one will give you financial 'advice'.

But no one will (or at least should) even be able to make any suggestions without more information. If you read similar threads you will see the first responses are commonly - provide more details such  as aims for money, ages, attitude to risk etc, emergency fund in place (also links to question below).


In your OP you say 'so we can withdraw in financial emergency'. Do you mean an unforeseen financial emergency or something like needing a new boiler/car? The issue with withdrawing when in an emergency is you could withdraw at a point where your funds have dropped 10./20/30/40/50%, thereby crystallising a loss.

Linton

Any money you want to withdraw in a financial emergency should be kept in instant access cash at the highest interest rate you can find.  However I find it difficult to understand how a financial emergency could require instant access to £80K.  Keeping the money in a cash account will probably lead to loss of real value because of inflation.  The only way to avoid this in the longer term is to invest in shares in some way.  So I suggest you keep something like 6 months living expenses in a cash account and put the rest elsewhere for the longer term. 

What the "elsewhere" is depends on how long the longer term is. One simple option could be to increase your pension contributions.

AAZ

I agree I understand this is not a financial advice
We don't need emergency fund for day to working etc both of us are in stable job and have some cash reserve, I wanted to phrase that we do not want to invest in properties and essentially looking for a long term investment in funds.
I had a look on Vanguard (but they are so many of them !!!) 

Albermarle

In this case you have two options (sensible ones anyway, presume you want to avoid very high risk options like crypto, day trading etc)
1) a Stocks & Shares ISA. By investing via a S&S ISA, you avoid the potential to pay any tax and it simplifies the process of investing. You are limited to investing £20K per tax year each. Less if you make any contributions to any other sort of ISA.
2) Increasing contributions to your pension(s). This is more tax beneficial that a S&S ISA, but the money will be unavailable until your late 50's.

In both cases your money is actually in investments within the ISA/pension, which need to be chosen according to your objectives and risk tolerance. Investing in stocks for beginners: how to get started - MSE (moneysavingexpert.com)

All investing is a long term game though and money invested is best left alone for as long a time period as possible.
Long-term investing: Increasing your chances of positive returns (nutmeg.com)

With a S&S ISA you can have ones with just a handful of investments to choose from , or thousands.
Stocks & shares ISAs: find the best platform - MSE (moneysavingexpert.com)
How to invest in a stocks and shares Isa: The quick and easy guide | This is Money

Nardy

investing via a S&S ISA

What is not obvious when starting out on this road is that you can invest more than £20,000 but only £20,000 of it can be in an ISA. You would do the rest via a General Investment Account. When  a new tax year starts you can then transfer up to £20,000 from your general account to your ISA.

dunstonh

And don't forget the pension tax wrapper.  That beats ISA & GIA in most cases where the money is unlikely to be drawn before age 57.   Potential for LISA as well.

bostonerimus

Use the money to pay off any high interest debt ie credit cards etc.

Then make sure you have 6 months to a year's spending in cash in a bank current or easy access saving account for emergencies.

Then use what's left to max out your annual pension contributions. You could look at an ISA as well as it gives quick access to the money, but the tax advantages aren't as good as the pension.

Invest in inexpensive index trackers or multi-asset funds comprised of index trackers. Vanguard and HSBC have plenty to choose from.

You might also consider overpaying your mortgage depending on your interest rate or making home improvements like insulation, more efficient boilers or heat pumps that will pay you back in reduced energy bills.

Altior

There may be some inheritance tax implications. If there are, could be tricky if the gift has been placed (and locked) in a pension wrapper.  

Albermarle

Altior said:

There may be some inheritance tax implications. If there are, could be tricky if the gift has been placed (and locked) in a pension wrapper.  

If there are any IHT implications on such an amount, it will only affect the estate of the person who gave the gift.
So where the gift ends up is not an issue,

Notepad_Phil

Albermarle said:

Altior said:

There may be some inheritance tax implications. If there are, could be tricky if the gift has been placed (and locked) in a pension wrapper.  

If there are any IHT implications on such an amount, it will only affect the estate of the person who gave the gift.
So where the gift ends up is not an issue,

But the proviso is that if the partner's dad dies in the next 7 year then the remaining estate at the time of death must have enough money in it to deal with the IHT implication from this and any other such gifts.