5-10 Year Recommendation

Altior

magd36 said:

Altior said:

Away from linkers there's currently no way to guarantee capital against potential inflation erosion over the medium term. As evidently, nobody knows what future inflation will be. 

In my view, the most suitable strategy is to protect capital as a minimum, then try to maximise yield, and hope that matches (or supersedes) inflation.

There's much more scope for this outside of an ISA. 

I don't disagree but can you give me a simple example of how you'd try to achieve that outside an ISA when cash generally doesn't match inflation over time? Thanks.

If you don't mind putting in a bit of legwork, inflation can easily be beaten via special savings accounts and regular savers. For example, the santander edge saver will give you 6% on £4K, MONBS recently offered a RS 7% (variable) for £1K pcm. 

Obviously there's a potential tax implication that will depend on other variables, however you might well have some flexibility with that as you're retiring. Right now it comfortably beats anything you can get in the ISA space (with no capital risk). 

I enjoy it a lot, so not a chore for me, but it's something that requires regular monitoring to maximise opportunity. For example, Virgin briefly offered a 10% RS. I also jumped on long term cash bonds when interest rates spiked, I have several bonds paying 6% up to 2028, and an ISA paying 5% up to next year. 

magd36

Altior said:

magd36 said:

Altior said:

Away from linkers there's currently no way to guarantee capital against potential inflation erosion over the medium term. As evidently, nobody knows what future inflation will be. 

In my view, the most suitable strategy is to protect capital as a minimum, then try to maximise yield, and hope that matches (or supersedes) inflation.

There's much more scope for this outside of an ISA. 

I don't disagree but can you give me a simple example of how you'd try to achieve that outside an ISA when cash generally doesn't match inflation over time? Thanks.

If you don't mind putting in a bit of legwork, inflation can easily be beaten via special savings accounts and regular savers. For example, the santander edge saver will give you 6% on £4K, MONBS recently offered a RS 7% (variable) for £1K pcm. 

Obviously there's a potential tax implication that will depend on other variables, however you might well have some flexibility with that as you're retiring. Right now it comfortably beats anything you can get in the ISA space (with no capital risk). 

I enjoy it a lot, so not a chore for me, but it's something that requires regular monitoring to maximise opportunity. For example, Virgin briefly offered a 10% RS. I also jumped on long term cash bonds when interest rates spiked, I have several bonds paying 6% up to 2028, and an ISA paying 5% up to next year. 

I understand and admire your diligence. Not sure it's achievable over 10 years based on savings account rates over the last 10 years but possibly. Wish I could be so engaged but great to hear it has been achievable. Thanks.

Altior

magd36 said:

Altior said:

magd36 said:

Altior said:

Away from linkers there's currently no way to guarantee capital against potential inflation erosion over the medium term. As evidently, nobody knows what future inflation will be. 

In my view, the most suitable strategy is to protect capital as a minimum, then try to maximise yield, and hope that matches (or supersedes) inflation.

There's much more scope for this outside of an ISA. 

I don't disagree but can you give me a simple example of how you'd try to achieve that outside an ISA when cash generally doesn't match inflation over time? Thanks.

If you don't mind putting in a bit of legwork, inflation can easily be beaten via special savings accounts and regular savers. For example, the santander edge saver will give you 6% on £4K, MONBS recently offered a RS 7% (variable) for £1K pcm. 

Obviously there's a potential tax implication that will depend on other variables, however you might well have some flexibility with that as you're retiring. Right now it comfortably beats anything you can get in the ISA space (with no capital risk). 

I enjoy it a lot, so not a chore for me, but it's something that requires regular monitoring to maximise opportunity. For example, Virgin briefly offered a 10% RS. I also jumped on long term cash bonds when interest rates spiked, I have several bonds paying 6% up to 2028, and an ISA paying 5% up to next year. 

I understand and admire your diligence. Not sure it's achievable over 10 years based on savings account rates over the last 10 years but possibly. Wish I could be so engaged but great to hear it has been achievable. Thanks.

This forum does most of the work, to be honest!

It gets more challenging as the funds accumulate, but circa £20K is comfortable. Currently my 'feeder' account is Chase with a bonus for a year, paying 4.75%. 

The low engagement option is cash bonds. I've added a screenshot of some of mine as an example. These rates are long gone, so it's a case of monitoring the market for when opportunities arise. A theoretical minor gamble, but the odds of beating inflation over the period are very high. And I don't put all the eggs in those baskets.