Lump sum investment

raven111

I’m looking to invest/save £300k to generate a monthly income. I want my £300k to be safe. Where’s the best place to put it? Thanks..

TheMilkmansDad

By safe I assume you don't want to invest as, by nature, they go up and down so might not be classed as "safe". So have a look at the best savings accounts. You'll need to split it to ensure you're covered by the £85,000 per institution.

Albermarle

To get better replies, you need to supply some more info.
Such as how old are you and how long do you want the monthly income to continue?
What existing savings/investments/pension provision do you have?
What is your risk tolerance, are you happy to see it invested and going up and down in value, to hopefully get a better result long term ?
Are you in employment/earning taxable income?

Finally have you considered taking professional advice, for what is a large sum of money ?

EthicsGradient

If, by "safe" you mean "guaranteed to not decrease", then you're looking at just savings, and you shouldn't put more than £85k with any one bank etc.

Do you intend to keep the whole £300k in the accounts for the foreseeable future, or may you need to spend some of it some time? Is this for a single person, or a married couple? What is their other income, in terms of pensions, salaries etc.?

PloughmansLunch

TheMilkmansDad said:

By safe I assume you don't want to invest as, by nature, they go up and down so might not be classed as "safe". So have a look at the best savings accounts. You'll need to split it to ensure you're covered by the £85,000 per institution.

If choosing the saving option and want it all in one place then you are covered up to £1m with NS&I - their Guaranteed Income Bonds pay monthly but you'd have to make do with a rate lower than savings peers at 3.9%. Should pay just shy of £1000 per month unless NS&I put the rates up after the next BoE meeting.

dunstonh

raven111 said:

I’m looking to invest/save £300k to generate a monthly income. I want my £300k to be safe. Where’s the best place to put it? Thanks..

Far too little information to answer that question.

What do you mean by safe?
There are no safe options (perhaps apart from an RPI linked annuity).  Every single option has a risk. Cash savings has shortfall risk and inflation risk.  Investments bring investment risk but reduced shortfall and inflation risk.

So, cash savings can actually be more risky than investments when it comes to income provision.

raven111

Thanks for all comments. I’m 66 and own the property me and my wife live in. We own another property that we rent out. Rental income isn’t great after all costs. We want to move back into the rented property. So options are to either sell or rent out property we live in. But again net rental income after all costs would only come to circa £650 per month. We could sell at £500k estimate, pay off loan on rental property of £200k leaving £300k. We have other savings and pensions but would need the £300k to provide a monthly income at least equal to the possible net rental income of £650 per month.

TheMilkmansDad

Well £300k in savings account paying 4% (rough average of current products) gives you £12k interest per annum.

raven111

Thanks. I can see that would generate an annual interest (before tax) but how would that be taken monthly?

wmb194

raven111 said:

Thanks. I can see that would generate an annual interest (before tax) but how would that be taken monthly?

Easily: lots of instant access and fixed rate savings bonds pay interest monthly, either to the account or paid away to an account of your choosing. Just pay attention to the terms of the account and make sure that where applicable you tick the correct box on the application.

Albermarle

TheMilkmansDad said:

Well £300k in savings account paying 4% (rough average of current products) gives you £12k interest per annum.

Although at least some of that £12K will be taxable and it will decline in actual value due to inflation.  Also in ten years time the £300K will still be intact, but will not buy the same amount as it will now.
I am not saying what you suggest is wrong, and it has the benefit of being simple, just that it also has a downside.
Annuities are also a possibility in this situation.
Even a pension style drawdown is possible, but if the OP is not used to investing that might be too big a step.