Where to invest £100k today?

itsme999

Hi

I have £100k cash to invest, I have used my 2026/27 CISA allowance. I am 65, have 2 fully paid properties rented and not in the mood or energy for more. I have investments managed by institutions/banks doing OK not much above banks interest rates. Banks are paying now around 4.9% for 1 to 5 years fixed rate bonds. I've never taken high risks and defo not now.

Any input welcome.

Edit; I don't need the cash or the return it for another 5 years.

TIA

Newbie_John

Low coupon gilts, you can decide what's the right length time for you.

https://giltsyield.com/bond/

Maturity date is when you get your money back, Gross yield is the return (coupon % + redemption price). Low coupon is mostly tax free, high coupon good for ISA as coupons are taxable.

InvesterJones

https://forums.moneysavingexpert.com/discussion/6675398/where-to-invest-100k-today

When do you need it back by and how much do you need it to grow?

Albermarle

 I have investments managed by institutions/banks doing OK not much above banks interest rates. 

Do you mean you are taking/paying for financial advice? If not then banks etc will not manage your investments, only take your instructions/choices.

A typical medium risk mulri asset fund ( 50%/50% bonds ) has grown on average 12 % a year for the past three years.

itsme999

https://forums.moneysavingexpert.com/discussion/comment/82061467#Comment_82061467

I have done shares, investments. cash and stocks ISAs, fixed rate bonds but never gilts, I need to find out more about them.

itsme999

https://forums.moneysavingexpert.com/discussion/comment/82061486#Comment_82061486

Another 5 years plus. It's got to be over the 4.9% fixed rate bonds from banks.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82061512#Comment_82061512

But how much risk are you prepared to accept in return for the potential for higher growth?

InvesterJones

https://forums.moneysavingexpert.com/discussion/comment/82061512#Comment_82061512

Gilts start returning over 4.9% when duration is close to 10 years, if you need something sooner than that and greater than 4.9% you would need to take on more risk, which is tricky without as much time to ride out volatility. Quite a demanding ask if you need that much return. Maybe corporate bonds?

dunstonh

I've never taken high risks and defo not now.

Rental properties are similar to stockmarket investments.

You say your investments are managed by the banks. If you've given them instruction to act too cautiously, then the returns will reflect that. A half-decent medium-risk portfolio would be returning something similar to the properties.

Newbie_John

https://forums.moneysavingexpert.com/discussion/comment/82061524#Comment_82061524

We don't know anything about tax situation, assuming two rental properties put you at 20% rate. Then the 4.9% rate is close to 4.1% after tax. And that's range for shorter gilts.

Now the thing I find annoying with top rates savings accounts is that it's a welcome offer that ends after a year moving back to lower rate 3-4%.

Gilts are like saving accounts with government, for example TG30 is about 4 year fixed, after 4 years you will get £16k back (4.2% return) with some £ of 0.2% paid every 6 months and rest at maturity. If BoE rates dropped significantly in a year/two you could sell it earlier getting little bit more.

But not much difference really unless you pick longer..

itsme999

https://forums.moneysavingexpert.com/discussion/comment/82061749#Comment_82061749

Hi; I am higher rate tax payer. The 5 year fixed rate bonds at 4.9% gives the comfort of earning that rate for the duration of the bond, the 4.9% won't change if BoE reduces base rates. Interest is paid annually which will give £24.5k in total.

My main worry with these bonds is in the unlikely event the sterling currency £ gets devalued, such won't happen unless there is war God forbids.