OAP with more than £200K

fenlander

ISAs are too small, what do you do with this sort of money ? this is what I guess will be left after CGT and fees, from the sale of a second home/development , seeing bank manager, NATWEST , on 27th June, any helpful suggestions incase he tries to tell me 2 % is a great return ??????????

trademark

firstly you have done really well selling property now :

you havnt said how old you are or if your married but:

7k into the best isa's you can find 14k if your married

the stock market is still undervalued and will rise as propert drops so maybe a ftse tracker :

premium bonds have a second 1m prize and you should get a reasonable return on 30k
60k if your married

gift 3k to relatives that you care about , see them enjoy it

an income bond or a high interest savings account for the money you need access to

p&o cruises do a great around the world trip ... 100 days for 30k ...

:rotfl:

sneekymum

I look after Mother's money. I have no financial qualifications at all but am doing a fair bit better than the last two Financial Advisers she had (that's not to say that seeing a really Independant Financial Adviser wouldn't be your best start).

I invest as if I were a pensioner when it comes to risk-
I aim to keep about 50% in Bonds - that is 'funds of bonds' and tax-free National Savings Certificates (max £15,000 per type per issue - there are Fixed rate and index-linked), 10% in Commercial Property Funds (these return 10%+ a year), 10% in cash (mini ISAs and internet savings accounts) and 30% in 'equity funds'.

I buy all funds at Fidelity through Cavendish Online and typically pay 2% as a fee. I get annual returns of over 7% and most of this is tax free as funds are subject to Capital Gains Tax only when you withdraw money (and not income tax) - and you've got a personal allowance of £8,200 before you pay any CGT.

Anyway - points that occur are - Do you wish to avoid Inheritance Tax? Do you need extra income?

cheerfulcat

Hi, fenlander,

Please, do not buy *anything* from the bank manager, or from an IFA employed by/linked to the bank. They will attempt to sell you products which you do not need, which will cost you a *lot* of money, and which may well tie you in for many years to come, with massive penalties for early withdrawal.

Best advice is to put the whole lot into an instant access, high interest savings account ( or several, if you're worried about keeping it all in one place ) and have a long hard think about what is needed from the money. An income? A sum of money at a certain date for, say, university fees or a wedding or a deposit for a house? Or perhaps you won't need an income straight away but you may in a few years' time...

FWIW, I have been in a similar situation and can truly say that it takes a while to figure out how you want to use the money and you will almost certainly find that the options which people who have products to sell will offer you are not ideal for your own personal objectives.

Assuming that you don't need the income, or not much of it, then a deposit account is as good a place as any for the short to medium term, depending on your age. The stock market will almost certainly give better returns but if it's going to cause you alarm to see your capital value fluctuate, it's perhaps best to keep your exposure to the markets low. It all depends on what you need.

Cheerfulcat

sneekymum

Yes that's good advice till you know what you're doing - I'd definately cancel that bank appointment though - make one with an IFA instead.

jockettuk

my 83 yr old neighbour inherited from her sister around 95,000 she knew what she wanted to do with around 40,000 ie new windows, stair lift, bath lift new porch etc but when she put her cheque into her bank (nat west) they hounded her to invest the money she told them she wanted to spend it and they asked her abt her future!! they wanted to tie her into a five yr deal at 83 you got to be kidding... she did all she wanted to and is enjoying the rest now as and when she needs it.. she is 85 now.. told the bank to take a run and jump that for all her life she has scrimped and saved and now wanted to enjoy her later life however long that may be.. good on her

dunstonh

a bank manager who is now a tied advisor is likely to only have a year or two as an advisor. Conflict of interests would be that he is responsible for sales targets of the branch and yet is advising you ant what is best for you.

Depending on your income, you will have to be aware of the potential of reducing your age allowance if you stick it on all deposit or income paying products. Inheritance tax may be of concern to you depending on your circumstances. You havent said if growth, income or combination is required.

One thing you wouldn't do is put it in one place/one fund. A sum of that amount would normally be spread over a range of areas. Nowadays, that can be done on one platform (meaning one statement) but it really depends on what you want to do with the money.

One thing is clear. Never go to a bank for financial advice.

Moorepart

Banks are just bunch of money grabber's,there finance advicer's should have health warnings on there back side,as you are a OAP means you can not affort to lose your capital,have a look at below web site:

Good Luck

http://195.171.4.123/index.jsp

deemy2004

Crikey 200k !!!

And here we're being fed that OAP's are poor ...

With £200k best bet would probably some sort of fixed bond... derbyshire do 5.05%

Cahoot instant access is 5.1%

Hmmm, I think liverpool do 5.2% ?

jockettuk

deemy2004 wrote:

Crikey 200k !!!

And here we're being fed that OAP's are poor ...

some are a bit more careful with there money and normally its from a sale of a house that the relatives would normally fight over in the event of a death.

EdInvestor

Beware of IFAs and their "investment bonds".These are stockmarket linked products sold by the insurance companies and the big selling point is 5% can be withdrawn tax free as income a year.

These products are riddled with charges and penalties and pay IFAs some of the highest commissions in the business. Avoid.

You can make the same investments by buying a couple of funds from a discount broker as mentioned or investing directly in a portofolio of shares - dividends are tax free to basic rate taxpayers.