Income from savings advice

JNick

Hello
Im in the very very lucky position where I have sold my house and able to go mortgage free with £900k in bank. I have though lost my job and aim to live off this by investing well. I am going to do a combination of the highest interest fixed bonds, a few easy access, isa's every year, bunging minimum in pension and premium bonds. Im planning on using one of the savings platforms such as Hargreaves or Lansdown. Just a quick sense check really that Im not missing anything obvious. 
Thanks very much in advance

dunstonh

Just a quick sense check really that Im not missing anything obvious. 

The use of just savings puts you at higher risk of inflation and shortfall risk.   You should introduce investments to reduce those risks.

 bunging minimum in pension and premium bonds. 

I'm guessing that was a typo and you meant the opposite.

Sg28

Holiday in the Bahamas?

ColdIron

How old are you? What is your pension provision? Where will you live? Do you intend to work again?

Cash alone is likely to be a poor choice

EthicsGradient

Without knowing your age, whether you have a partner or children, what you think your expenditure will be (including rent?), and what your future pensions will be, it's hard to say. I presume "minimum in pension and premium bonds" should read "maximum", because the minimum, for someone not in work, is zero. Hargreaves Lansdown is one company; while they do sometimes show the best savings deals, they don't always, and it would be wiser to check what is generally available, using eg the MSE lists of savings accounts, or the MoneyFactsCompare site.

Depending on the answers to the above, it might be worth using an IFA for advice - it's a large amount, and if you need it to last some time, they may be able to suggest low risk strategies that use bonds and/or shares too. Over the long term, these usually beat savings accounts.

Albermarle

JNick said:

Hello
Im in the very very lucky position where I have sold my house and able to go mortgage free with £900k in bank. I have though lost my job and aim to live off this by investing well. I am going to do a combination of the highest interest fixed bonds, a few easy access, isa's every year, bunging minimum in pension and premium bonds. Im planning on using one of the savings platforms such as Hargreaves or Lansdown. Just a quick sense check really that Im not missing anything obvious. 
Thanks very much in advance

You should consider getting some professional advice, to manage such a large sum, if you are not experienced in this area. Some specific points as follows:
Saving and Investing are two different things. Although everybody is different, with this sort of sum most would have the majority invested.
You can only add significant sums to a pension and get tax relief, if you have a decent salary. If you are not working you are very limited in what you can add.
Hargreaves Lansdown is an investment platform, that offers a savings account service as a sideline.
They offer thousands of different investments and may not be the best choice if you are not well informed about investing.

eskbanker

JNick said:

Im in the very very lucky position where I have sold my house and able to go mortgage free with £900k in bank.

It seems unsurprising that you're mortgage-free if you've sold your house! Does this mean you're renting, or living in an inherited property or similar, i.e. do you have housing costs?

JNick said:

I have though lost my job and aim to live off this by investing well. I am going to do a combination of the highest interest fixed bonds, a few easy access, isa's every year, bunging minimum in pension and premium bonds. Im planning on using one of the savings platforms such as Hargreaves or Lansdown. Just a quick sense check really that Im not missing anything obvious. 

Not sure to what extent you've done this already but you ought to construct a financial plan that maps out how much you need to live on and to ensure that you differentiate between funding that in the near future (money that should be kept in readily-accessible low-risk form) versus longer term money that can be invested to mitigate the effects of real terms value loss to inflation.

P.S. Many on here have erroneously referred to Hargreaves Lansdown as 'Hargreaves and Lansdown', but I don't think I've ever seen them described as 'Hargreaves or Lansdown', which is a bit like asking if someone likes country or western music....

Doctor_Who

Albermarle said:

You can only add significant sums to a pension and get tax relief, if you have a decent salary. If you are not working you are very limited in what you can add.

If the OP has had some paid employment this financial year, but won't in future years, then this year will be their last chance to get significant pension tax relief (apart from the non-tax payer £3600 gross contribution anyone can make each year). 

JNick

Thanks all very much for the feedback - I will see an FA - and yep i meant 'maximum' not minimum, sorry. And also to write 'Hargreaves' or 'Raisin' savings platforms. Note to self to proof read before posting. 
And yep SG28 - celebratory holiday already booked 

jimjames

JNick said:

Thanks all very much for the feedback - I will see an FA - 

Strongly recommend you don't do that. Find an IFA, the I for independent is very important. Otherwise someone will sell you the products they sell not necessarily the best product for your situation.

cwep2

Couple of pointers:

Most advice on how much cash to have / size of emergency fund work on assumption you have regular (employment) income coming in and the cash amount is to top this up. Obviously you may not have regular cash coming in, certainly vs your outgoings so I would recommend you keep 1-2yrs worth of typical outgoings in cash or cash-like assets (rather than stocks) which will be much higher than most guides suggest, although without rent/mortgage these will be lower than for many people. These can be a combination of easy access (for next 3 months) + PBs + ladder of fixed accounts maturing every few months + Gilts (for tax advantage over fixed assuming you are higher rate now). Also in your position worth keeping some cash around for splurging, in case you want to go on that dream holiday/buy a new car/extend house or something like that. This is the pot you don't want invested in equities.

Equity tracker funds are fine, diversify though, some may seem diverse ("Global") but may be 40%+ in US equities which gives you some concentration and currency risk. Dig a little under the hood and maybe have a spread of fund types, maybe commodities fund or EM fund or whatever. 

You will probably have 6figs in either/both ISA or GIA, some places charge %age of assets as fee, some are fixed fee or sometimes no ongoing fee. For most sub 6 figs this doesn't make much difference, but if you have a lot in these investing accounts you want fixed rather than %age. I don't know off top of my head what HL is, but I personally use iWeb (part of Lloyds/Halifax group) which charges no ongoing fees so is one of a few recommended for high value accounts. Also if you have ISA and GIA in same place you don't pay twice, if you have one you get the other for free. GIA is General Investment Account = what you invest that's not in an ISA wrapper, you will also need to deal with CGT and probably do tax returns including investment income/gains.

You may need/want an accountant if your situation is complex, I don't myself but many people in your position do. If you are comfortable doing a self assessment tax return on your own and calculating CGT etc you probably don't need one, but one may help you save money by optimising things with respect to tax.

Finally don't stress on the day to day moves in your investments, they will go up and down, some days this will be 5 figures which may seem a lot, but it's best to stay one step removed from it all. Over the long term it is almost always the right place to put the bulk of any wealth to grow it and better than cash, but there is volatility which goes along with that, so just think of it as something you won't need to touch for 1-2yrs+ so you only need to worry about the moves over that time frame, not the day to day or weekly swings.