£250k to invest

Toooldforthisagain

Hi

Just looking for some ideas / views on what to do with £250k I have tried to give as much information as possible

I'm 52 with a 9 year old 
Have a family home with no mortgage and no debts, we may look to move in 18 months 
Have £30k in a fixed 1 year bond at 5% 
Have £10k in accessible money 
Just bought new car 
Pension have some small private ones and currently working for Local Authority
Pension Husband has one with his work too
We both are standard rate tax payers
Don't want to risk the capital at all

We save approx £1k per month

Thank you

eskbanker

The Flowchart - UKPersonalFinance Wiki offers a structured process to help decide what to do with money....

Albermarle

The first thing to think about is what do you want this money to do for you? For example.
Do you ( both?) want to plan to retire earlier than you would have done?
Do you want to leave an inheritance?
Do you want to have money to support your son when he is older ( car, house deposit, Uni costs etc ) ?
Do you want to give some to charity?
Do you want to start spending more on luxuries, more holidays etc.

Only then can you sensibly decide what to do with it now.

By the way your thread title refers to investing the money, but your post seems to indicate you want to save it ( two different things).

Don't want to risk the capital at all

This is a serious handicap to a proper financial plan, and being too cautious is a risk in itself.
Nobody will suggest to put the £250K into something very risky, but using part of it to invest in mainstream funds ( such as those in your private pensions) for the long term is likely to be more beneficial than just putting it all in savings accounts.

Gary1984

You can both open a cash ISA and put 20k in each to avoid paying tax on your interest.

For the rest spread it evenly across 3 or 4 savings accounts. This way you stay under the FSCS £85k limit in case anything happens to any of the providers.

Split the accounts between you and your spouse so that you both fully utilise your tax free savings allowance. If you need all of it for the house move keep it easy access. If you can afford to lock some of it away then a fixed rate will protect you from rate falls.

https://www.moneysavingexpert.com/savings/

kempiejon

What are your running bills and other expenses?
If you can save £1k per month you have sufficient income currently.

If I had SO, young kid, was mortgage free, with a new car, some savings, some pension and didn't want to take any risks I'd stick some in cash ISAs and premium bonds and ear mark some for very specific spending.
Again, if I were in your circumstances, I'd say it's time for a big family chat. You'll never be able to spend the next 5 years with the family so now might worth saying to the SO this is a perfect time to downsize our jobs to spend time together as a family exploiting that £250k. It'd buy a lot of experiences.
There quite a few years of living in that money and you'll never get the time back.

dunstonh

Don't want to risk the capital at all

By not having investment risk, you increase inflation risk and shortfall risk.   So, no investment risk can actually be higher risk overall than taking a sensible level of investment risk, where inflation risk and shortfall risk would be lower.

In reality, there is no risk free option.  It's a sliding scale of risk.

kempiejon

dunstonh said:

Don't want to risk the capital at all

By not having investment risk, you increase inflation risk and shortfall risk.   So, no investment risk can actually be higher risk overall than taking a sensible level of investment risk, where inflation risk and shortfall risk would be lower.

In reality, there is no risk free option.  It's a sliding scale of risk.

Quite so. People got rich taking risks. Lots of business fail.

Spending isn't effected by inflation really. But if the objective is to preserve the capital £250k in a bank will be £250k forever. What's the point of that. Money has to have a goal. Buy things, have experiences, self improvement, pay for care, retire early, give bequests, philanthropy. It took me a while to realise I didn't just want a pile of money I wanted money to enable me.

I think investments are for long term protection of spending power and the chance of growth. Cash hasn't exclusively lost to inflation but usually does especially long term. Inflation had been fairly predictable for what 10-20 years except for the last 3?
Savings is a bucket of at inflation risk cash to be used to smooth out unexpected spending. Christmas, holidays and emergencies no heating, redundancy long term sick. How much you save is probably correlated with your view to safety.
£250k kept as cash will definitely decline in purchasing power. £250k invested will vary but has the chance of matching an perhaps exceeding inflation. That's why we do it. For those inexperienced and new investing putting your money where it's value is volatile and determined by things called "markets" feels dangerous.
£250k sitting in the bank looks safe and it'll look like £250k in 30 years. By which time it might just by a car rather than a flat.

Cisco001

First thing I would do is max all isa, yours, your husband and child.
Then checking the pension pots and decide if there is a need of increase in contribution before consider anything else.

Catplan

Cisco001 said:

First thing I would do is max all isa, yours, your husband and child.
Then checking the pension pots and decide if there is a need of increase in contribution before consider anything else.

I’d max pension pot first then ISA but with the sums involved enough to do both.

Beddie

kempiejon said:

 But if the objective is to preserve the capital £250k in a bank will be £250k forever. What's the point of that. Money has to have a goal. Buy things, have experiences, self improvement, pay for care, retire early, give bequests, philanthropy. It took me a while to realise I didn't just want a pile of money I wanted money to enable me.

I agree with you. It's something a lot of people need to learn, otherwise the money itself becomes the goal, not the opportunities it gives.

nottsphil

kempiejon said:

dunstonh said:

Don't want to risk the capital at all

By not having investment risk, you increase inflation risk and shortfall risk.   So, no investment risk can actually be higher risk overall than taking a sensible level of investment risk, where inflation risk and shortfall risk would be lower.

In reality, there is no risk free option.  It's a sliding scale of risk.

£250k sitting in the bank looks safe and it'll look like £250k in 30 years. By which time it might just by a car rather than a flat.

It might still buy a detached  house in Notts 😊