cash alternatives / retirement

pauline115

Some poor decisions / financial illiteracy, a rubbish accountant and a busy career have left me with a large amount of cash and no pension. Im 54.

I have around 200k cash in my business which i'm thinking of maxing out pension contributions in a sip over the next few years (I have a ltd company) im considering global index funds but at the same time looking at other options what seems to be a time of increased risk. 

Given that I will be putting large lump sums and am coming towards the end of my career could you recommend a way that will be lower risk while I see that happens over the next year or two. I know the received wisdom is don't time the market but i'm not totally convinced of the risks of a large crash vs the relatively speaking small additional gains are worth having lots in equities given my age.  I just would like to get some cash into the sip to take advantage of the tax savings witha any growth a bonus,

I also have over half a million in cash outside the business that I would be open to suggestions on alternatives to equities and cash, at the moment they are all 4.5-5% and I have as much as possible in cash isas 

Would you recommend a cautious big bank fund? I dont understand gilts/bonds and how they might differ enough to make an informed pick

Thanks you for taking the time to read

Sam_666

Get proper accountant to check if pension setup pass hmrc test. Some info is here:
https://www.unbiased.co.uk/discover/tax-business/running-a-business/contributing-to-your-pension-via-a-limited-company-explained
Invest in Royal London MM fund to park cash until you develop you investment strategy.

As for cash outside ltd, get IFA. None here can give you meaningful advice based on 1% of info provided.

pauline115

the cash is all in various savings accounts for now, some ISA  and a mix of easy access and notice accounts.

How do IFA's work, is it a case of them developing a plan for a fixed fee or taking a percentage over time? I dont know any personally , do you have any advice about how to find a good one?

400ixl

At what age are you wanting to retire?

You could consider transferring the cash ISA money to a stocks and shares ISA to get the investment returns.

That and maximising your pension investment would be a good start.

Dazed_and_C0nfused

pauline115 said:

Some poor decisions / financial illiteracy, a rubbish accountant and a busy career have left me with a large amount of cash and no pension. Im 54.

I have around 200k cash in my business which i'm thinking of maxing out pension contributions in a sip over the next few years (I have a ltd company) im considering global index funds but at the same time looking at other options what seems to be a time of increased risk.

That is a very important fact you need to make whoever you end up getting help/advice from aware of.

It will mean you have no scope to use carry forward of unused annual allowance.

Probably not a major problem but it is a key piece of information an IFA would need to be made aware of.

Linton

pauline115 said:

Some poor decisions / financial illiteracy, a rubbish accountant and a busy career have left me with a large amount of cash and no pension. Im 54.

I have around 200k cash in my business which i'm thinking of maxing out pension contributions in a sip over the next few years (I have a ltd company) im considering global index funds but at the same time looking at other options what seems to be a time of increased risk. 

Given that I will be putting large lump sums and am coming towards the end of my career could you recommend a way that will be lower risk while I see that happens over the next year or two. I know the received wisdom is don't time the market but i'm not totally convinced of the risks of a large crash vs the relatively speaking small additional gains are worth having lots in equities given my age.  I just would like to get some cash into the sip to take advantage of the tax savings witha any growth a bonus,

I also have over half a million in cash outside the business that I would be open to suggestions on alternatives to equities and cash, at the moment they are all 4.5-5% and I have as much as possible in cash isas 

Would you recommend a cautious big bank fund? I dont understand gilts/bonds and how they might differ enough to make an informed pick

Thanks you for taking the time to read

pauline115 said:

the cash is all in various savings accounts for now, some ISA  and a mix of easy access and notice accounts.

How do IFA's work, is it a case of them developing a plan for a fixed fee or taking a percentage over time? I dont know any personally , do you have any advice about how to find a good one?

Given the amount of money involved, your lack of knowledge, and the need to make your savings tax efficient I agree an IFA  is essential.  The I is for Independent  which means they can propose investments from any supplier and are not tied to particular one(s). The IFA should consider  both the cash currently held in your business and your personal cash savings together.  A small local IFA company should be fine for your needs, the big national firms can be very expensive and may not be Independent. 

Recommendations from friends and family is one way of identifying suitable IFAs and/or you can find say 3 local ones and arrange a free meeting with each to enable you to explain what you want and for them to say what they can do and at what price.  Then choose the one you feel you would be most happy to work with.  The inter-personal relationship is important.

You should use the opportunity to learn as much as you can from your IFA.

An IFA will do the initial work of understanding your needs and proposing how best to meet them for an agreed fixed fee normally stated as a % of the total pot size. Ongoing maintenance of your investments would be a separate deal, again normally quoted as an annual % of pot size.

You are concerned about current risks.  There are always risks, sometimes more obvious than now.  A time of risk is a good time to invest because prices are lower.  Better than when everyone is exuberent and prices are soaring.  You could be invested perhaps for the next 40 years and will live through many temporarily difficult times so you will need to get used to them.

Albermarle

You do not need to be 100% in equites/shares, nor 100% in gilts/bonds.
For someone of your age and from your comments, then usually some kind of medium risk mixture of both is a well trodden path.
As above it does sound like an IFA would be of value to you, even though you will have to pay them of course. 

pauline115

@Linton i dont have any family or friends who have ever used an IFA. Is there a way to measure how good they are? given the nature of my needs do you think theres value in an adviser over putting a large percentage in a diversified fund and the rest in ISAs?

pauline115

@Albermarle should i be concerned about the 'overvalued ' stock market ie wait to investim any % equities given when i am starting

pauline115

also what would be considered a reasonable fee so i can make sure  im not overpaying

Stargunner

Firstly, how many more years are you looking to carry on working before you retire, and how much money would you need per year in your retirement,  Then some appropriate advice can be suggested.