Inheritance

Albermarle

 because I'm not enormously financially savvy my instinct is to trust high street UK banks like HSBC, santander, halifax, etc. over online ones I've not heard of.

The high st banks play on this insecurity and offer generally abysmal savings rates.

Apart from some regular savings accounts, which are a limited special breed, I can pretty much say 99% that no regular poster on this forum has savings with a high st bank.

Santander and Nationwide maybe a few, but most save with these 'banks you have never heard of' as your money is still protected just the same. If they are mentioned in MSE savings site or here  Compare The Best UK Savings Accounts | moneyfacts.co.uk for example, they are safe up to £85K

RobM99

...or check on the FSCS website.

granddaughter1980s

Alice_Holt said:

granddaughter1980s said:

p00hsticks said:

granddaughter1980s said:

One being a long term pot which I don't want to touch which could just sit in the background working for me, rather than doing nothing.

My main problem is the working for me pot. I'm hunting for fixed rate cash ISAs at the moment to just dump a bunch in for 2-5 years at least.

I know you've said that investments frighten you as you're not comfortable with the idea of them going down rather than up, but in order to work for you, a long term pot really needs to be in some sort of funds, stocks, shares etc. A cash ISA paying 2-3% in a time when inflation is over 10% is losing you money just as surely as a dip in the stock markets would, but over a long period (say ten years +) historical data shows that mainstream investments will generally perform much better than cash savings.

Thanks p00hsticks, that does make me feel slightly less like it's going to be a more sensible move overall for at least some of it! but is there a way to go for a newbie? Would you recommend a basic stocks and shares ISA or would you go down the investment firm route and have someone 'professional' do something with it... or do I go the route of something like a vanguard index linked fund?

      I'd chose a global tracker fund (such as Vanguard Life Strategy 80 using the Vanguard ISA platform) and drip feed your contributions into it monthly. That removes some risks such as:
i) Picking a more expensive active fund that under performs the market;
ii) Inflation eroding the real value of cash holdings;
iii) Seeing a lump sum investment dipping in value during short-term market movements and panicking.

Set it up, make regular contributions, and then forget it. Come back in 10 yrs, and you might be pleasantly surprised by the outcome.   

 I'd also do similar in a Self Invested Pension Plan (SIPP) which might come in useful should you wish to retire before SPA and your occupational pension start.  Or look at AVC's in your current USS scheme, if those offer better terms / reduced management costs. 
Increasing pension contributions is particularly advantageous for 40% tax payers.   

Others will have their own preferences / opinions / strategies, this is mine. You should decide on the approach you feel most comfortable with, and the one you can stick with regardless of inevitable market movements.

Thanks Alice - excellent shout and through various sources I like the sound of Vanguard (actually heard about them through Freakonomics!). Seeing as I am a total beginner though can I ask whether there's any benefit to drip feeding vs dumping a lump sum in? I don't want to dump all of it in because I have plans with some of it but I was thinking about a third or so should just go into something like this where I don't touch it for an age.

Based on a brief eyeball of the Vanguard options I'm wondering whether I should pop two lump sums into something like the lifetime60 or lifetime80 and have one set to accumulate and one set to income - no idea whether that's even possible but thought it might give me some spare funds that are more useable...

DiamondLil

If it helps, the oft repeated mantra is "time in the market beats timing the market". Which I have found to be correct in my case.

[Deleted User]

Without knowing the figures etc - I'd be inclined to put something like 1/3 into the mortgage as a capital repayment, 1/3 into your main pension pot and keep 1/3 cash or near cash (savings, ISA or premium bonds) to be used for renovations, fun etc.

Mr._H_2

You mention that you have some of the money earmarked for “home improvements”. Do these include things that will improve the energy efficiency of your property? If you are planning on staying where you are for a long time, I think you should seriously consider things like insulation, a heat pump, solar panels, and battery storage. These are all things that can contribute to reducing your outgoings and/or increasing your income and should therefore be viewed as investments and considered alongside your other options.

Gary1984

On average the outcome would be better to just dump it all in. The advantage of drip feeding it, especially if you see yourself as risk adverse, is that you are less likely to panic if the investments tank in the very short term if you've only committed a smaller portion of your money.

How much is being invested? If it's around £40k you could put £20k in a S&S ISA now and the rest when you get your new allowance in April.

Mr._H_2

In terms of “traditional” investing - no one has a crystal ball and no one knows for sure what will happen in the future. However, we are in a bear market at the moment and the general trajectory in the near term is probably downwards. In this scenario drip-feeding would do better than sticking in a lump sum all in one go. If you do decide to invest however, don’t try to “time the market” i.e. try to guess where the exact “bottom” is - you’ll end up being an accidental trader rather than investor and more likely to lose money and waste your time.

Mr._H_2

Interesting that people are advising to pay off the mortgage whilst not having enough info to give that advice.

What is the current interest rate on your mortgage? Fixed or variable? When will the current rate change? Etc.

eskbanker

Mr._H_2 said:

In terms of “traditional” investing - no one has a crystal ball and no one knows for sure what will happen in the future. However, we are in a bear market at the moment and the general trajectory in the near term is probably downwards. In this scenario drip-feeding would do better than sticking in a lump sum all in one go. If you do decide to invest however, don’t try to “time the market” i.e. try to guess where the exact “bottom” is - you’ll end up being an accidental trader rather than investor and more likely to lose money and waste your time.

Basing investment behaviour on a perception that "the general trajectory in the near term is probably downwards" is also trying to time the market - it's easily justifiable to commit to either lump sum or drip-feeding as one's adopted investment policy, but anything involving choosing based on a belief about short-term direction is pretty much the definition of trying to time the market....