Investing advice

dont_use_vistaprint

hi I need some advice on where to invest my capital. I'm 55. I've been retired for three years. I now get about £800 a month from a LGPS pension which more than covers my bills and day-to-day expenses.

I currently have about 380K in capital that is split between investco BIPS, VLS80 and short-term money market.

I also have about £120,000 in various savings accounts currently making just above 4%.

I would like to sell all 380K i'm buying a single fund that will deliver me around 5 to 6% with a very low risk of crashing but short-term volatility I don't mind as this is primarily Money for 10 to 15 years from now

masonic

The 10 year gilt yield is just shy of 5%. If you need the income, you could opt for T37H (green gilt) which pays a coupon of 4.625% and the rest of the return comes from a capital gain at maturity. But the price will fluctuate somewhat, especially in the early years. Otherwise, TG35 has a low (0.625%) coupon, so is more tax-efficient if you are investing outside of an ISA or SIPP.

You could opt for corporate bond funds, including high yield ones, but these will crash from time to time, and there is no guarantee they'd return more than a savings account.

You don't mention wanting to protect against inflation, so would you be happy with 5% if inflation was double digit for a year or two, like happened in 2022, or stays elevated for a decade (like the 1970s when it averaged 13%pa and interest rates were increased to over 10% for a good portion of the period, and out to the early 1990s)?

It might be worth revisiting your previous thread on the same subject as some of the replies there are still relevant:

https://forums.moneysavingexpert.com/discussion/6652009/looking-for-an-investment

Ultimately if you aren't bothered about inflation risk or shortfall risk, but want something that wouldn't fall victim to an economic crash or depression, then you shouldn't expect it to return much more than the BoE base rate. Savings accounts are the weapon of choice for most in this situation.