50 yo looking for investment advice

Albermarle

I am in the building trade and my plan has always been to flip properties but I thought I’d see if there are better alternatives out there. 

As this a savings and investments forum, you will inevitably get answers geared in that direction. Most of the regular contributors accumulate retirement assets mainly via the pension route, rather than by having BTL properties ( although some do ) or property development/flipping properties, which is seen as quite risky. However actually being in the building trades is a positive in this respect.

I think overall it would be very difficult to predict which way would be best for you, and it might come down to personal preference. Investing via a pension would be a LOT less work, and should give steady return in the long run, aided by tax relief. Property is a LOT more work. It could prove very lucrative and then again it might be the opposite.

Aged

KJD73 said:

Hi, I’m soon to be turning 50 and have around £20,000 I’d like to invest for my retirement. Not really looked into it much yet so happy to accept all advice. Cheers in advance. 

If I were you, I'd consider using it to reduce my mortgage.

phillw

Aged said:
If I were you, I'd consider using it to reduce my mortgage.

The return on investment by repaying your mortgage is definitely much more certain.

Consider the mortgage a savings account. If you can beat the rate in another account at the same level of risk then repaying the mortgage first is not necessarily the right choice, though having capital outside the safety of your property can be an issue if you need to claim benefits.

Pensions are harder to compare because you get tax relief on the way in and pay tax on the way out. Blind faith that it's going to be better (and the government isn't going to move the goalposts) is probably the right way to go.

Albermarle

Blind faith that it's going to be better (and the government isn't going to move the goalposts) is probably the right way to go.

There will be no doubt changes to pension rules in future. However the changes are unlikely to affect the basics for a smaller investor. In my opinion, basic rate tax relief, 25% tax free etc are unlikely to be affected for many years.

inflationbuster

1/ AVC in your pension if you're not already retired (l personally opted to invest myself in a stock and shares ISA)

2/ Pay down your mortgage. 

3/ Multiyear year fixed rate bond in an ISA (>4%).  

4/ A final idea is invest (assumes you are willing to take some risk and you might not get the amount you invested back before you retire).  A (global) index tracker fund in a stocks and shares ISA. Long term index funds average ~10% according to Investopia.  Please take financial advice if considering this.

enthusiasticsaver

A pension would be the most tax efficient way of investing for retirement.  I would look into a SIPP as a starting point. 

justme111

How much do you live on now? Jow much of these expenses are not going to be there when you are older ? When does your wife wants to retire ? Does your projected pension meet your requirements ? If not - do you want to upset the pension or reduce your requirements ? If yes - then either spend thisoney , put it for children or save it just in case.