UK £400k lump sum investment to create a monthly income

UKInvestor101

Hi I’m 54 and following a redundancy I have an indexed linked pension, which will cover my bills. I also have £120,000 in CASH isa’s to generate income. I have other savings & shares (£200k) which I can still access to help cover expenses. 

However, I also have £400k I can afford to invest long-term but I’d like it to generate £15,000 per year. I’m talking to investment companies but was looking for advice as to the best way to generate a monthly additional income (£15k per annum) appreciate all investments contains risk and I’d like to try to inflation proof my future income, over the next 25/30 years. Fees associated with investment companies seem high, but if it’s money well spent then I don’t have an issue as very new to investing. Any help or experience of doing this would be greatly appreciated thanks all

Marcon

UKInvestor101 said:

Hi I’m 54 and following a redundancy I have an indexed linked pension, which will cover my bills. I also have £120,000 in CASH isa’s to generate income. I have other savings & shares (£200k) which I can still access to help cover expenses. 

However, I also have £400k I can afford to invest long-term but I’d like it to generate £15,000 per year. I’m talking to investment companies but was looking for advice as to the best way to generate a monthly additional income (£15k per annum) appreciate all investments contains risk and I’d like to try to inflation proof my future income, over the next 25/30 years. Fees associated with investment companies seem high, but if it’s money well spent then I don’t have an issue as very new to investing. Any help or experience of doing this would be greatly appreciated thanks all

Offshore bond might be worth considering, especially given the favourable tax treatment of the income: https://www.mandg.com/pru/adviser/en-gb/insights-events/insights-library/offshore-bonds-taxation-explained

xylophone

Have you obtained a state pension forecast?

https://www.gov.uk/check-state-pension


Consider taking advice from an independent financial adviser?

https://adviserbook.co.uk/

You would tick "confirmed independent" and other options required when the menu comes up.

Bostonerimus1

You could by an annuity with RPI with your 400k and get 15k a year, but as you have an index linked pension already I don't think you need one.

Or you could simply put it all into equity index funds and use a total return strategy to generate your income; use your ISA allowances sensibly. I'm dubious of offshore bonds because you're dealing with insurance companies with all the added overhead and fees and I believe in keeping things simple.

Malale

I think that Real estate investment can generate rental income. You can either invest directly in properties or consider real estate crowdfunding platforms. but, I'd prefer investing in property, especially with £400K.

NlghtOwl

Depends if you want to self manage, lots of options for fixed income and equities.  I was looking at investment trusts earlier which would give the amount you desire in dividends. Also a ftse tracker or dividend tracker wouldn’t be far off eg. VHYL and still offer growth. Keep it simple and try to move to tax advantaged wrappers when possible over the years. Good luck 

dunstonh

 Fees associated with investment companies seem high,

What is your definition of high?   They don't need to be high.

 I’m talking to investment companies

That is probably not the best place to get advice.  They will only retail their own product.   The choice should be between IFA or DIY.  Not using a salesforce/FA of a company.   The latter will just ramp up your costs.

Offshore bond might be worth considering

They certainly have come back into play since the reduction of the dividend allowance and CGT allowance.   However, the better ones tend to be on the investment platforms (whole of market investment choice rather than in-house fund range).  Along with a bit of bed & ISA, bed & pension with a relatively small amount in GIA.

Albermarle

You probably have two basic options;

1) Engage an Independent Financial Advisor
2) Spend some time reading and researching about investments and associated items like tax rules. ( These forums are a good source of info). This is so you can manage your own finances.