What to do with £50k?

Brie

You could put £20k into an ISA for yourself and another £20k into one for your wife.  And then maybe the other £10k into a pension for your wife.  If she's young and not working she's going to need money for her retirement at some point.

Humbug2015

Thanks for the replies.

My pensions are projected to be enough for myself and my wife and that's without the state pension. My wife inherits all of my pensions in my will and the pension companies have been notified of this.

My wife will almost certainly be due a hefty inheritance too in the coming years.

What kind of interest rate do the best ISA's give you?

Humbug2015

 So I would recommend a parallel long term 100% equity growth portfolio to buy more income funds as necessary.

Could you explain this further as I have no idea what this is?

Many thanks...

Linton

Humbug2015 said:

 So I would recommend a parallel long term 100% equity growth portfolio to buy more income funds as necessary.

Could you explain this further as I have no idea what this is?

Many thanks...

Dont put all your money in a passive income portfolio.  Keep some in a separate growth oriented portfolio as you may well need to buy more income funds in the future to cover inflation.

Another option would be to use less of the income for ongoing living expenses than you generate and invest the extra separately. This could provide a pot to use for larger one-off expenses or pay for future income fund purchases.

k6chris

Linton said:

Humbug2015 said:

Out of interest, we asked ChatGPT to recommend investments and this was what it said:

🧮 Portfolio Example Allocation (£50,000)

Investment Allocation Est. Yield Annual Income

Vanguard UK Equity Income Fund £7,500 ~4.0% £300

City of London (CTY) £5,000 ~5.2% £260

Vanguard All-World High Dividend (VHYL) £7,500 ~4.5% £337

Henderson Far East Income (HFEL) £5,000 ~8.0% £400

iShares Global REIT ETF (IWDP) £5,000 ~5.0% £250

iShares HY Corp Bond (IHYG) £5,000 ~7.5% £375

HICL Infrastructure (HICL) £2,500 ~6.0% £150

Renewables Infra Group (TRIG) £2,500 ~5.5% £138

JPMorgan Global G&I Trust (JGGI) £5,000 ~4.0% £200

Cash / Money Market £5,000 ~4.5% £225

Total £50,000 ~6.5% ~£3,425/yr

That looks to me like a reasonable well diversified generator of passive income.

I run a similar but rather larger income portfolio. Mine is held in an S&S ISA as that provides more room for other income to be taxed at basic rate.  That could well be a more important consideration than other tax factors in deciding whether to use a pension or an ISA.    Also your wife not working would significantly constrain the amount of money you both could put in a pension.

The platform I use (II) simply pays all interest/dividends directly into my bank account as soon as they arrive with no action required on my part.  I would doubt that could be achieved with a pension.

One aspect you need to consider is inflation.  It is unlikely that the income would rise in line with inflation.  So I would recommend a parallel long term 100% equity growth portfolio to buy more income funds as necessary.

I like this idea a lot.  I am looking to start drawdown of a smallish SIPP, to top up my DB pension, the idea of a passive income portfolio sits well with me mentally, rather than focusing on the growth or otherwise of a portfolio.

Albermarle

Humbug2015 said:

Thanks for the replies.

My pensions are projected to be enough for myself and my wife and that's without the state pension. My wife inherits all of my pensions in my will and the pension companies have been notified of this.

My wife will almost certainly be due a hefty inheritance too in the coming years.

What kind of interest rate do the best ISA's give you?

Best Cash ISA Rates | July 2025 | Up to 4.98% AER

There is also an ISA subforum on MSE, so maybe have a look at that as well.

Albermarle

Brie said:

You could put £20k into an ISA for yourself and another £20k into one for your wife.  And then maybe the other £10k into a pension for your wife.  If she's young and not working she's going to need money for her retirement at some point.

OP said - My wife isn't working due to ill health

In which case the maximum she can add each year to a pension is £2880 ( + £720 tax relief added)