£100K To invest - Where to start?

granny1

Hello all,

I'm posting this on behalf of an elderly relative (76).

Currently, she owns her house (Husband died many years ago ). She has approximately £100K sitting in several different savings accounts within one high street building society. Currently she is slightly worried with all the recent Northern Rock shenanigans about if they collapsed she'd lose all of her money.

She has asked me to have a look at what can be done with it. It all needs to be low risk stuff, instant access is probably not needed (OK we will say 50% of the amount for instant access)

Now I'm a complete novice on things like these so was wondering what advice people could give her? Is it best to split it up into amounts of £15K to £25K and just stick it into different savings accounts?

Thanks all

Ben

RJharrow

banks and/or financial companies offer a considerable rate provided you have to locked up your money for a specific period. . . .

Jonbvn

Index linked saving certs from NS&I look like a good idea for £30k. Guaranteed by the gov't and linked to RPI.

Also have a look at Northern Rock products, which are currently guaranteed by the gov't.

davidlee

The best thing would be to seek professional help who could guide you and help you in taking a wise step.

jamesd

Multiple accounts definitely.

You should also show her the performance chart for BlackRock UK Absolue Alpha fund and see whether she's willing to accept the fairly small ups and downs to get 8-15% growth, not guaranteed. If yes, maybe as much as 25% of the money in it.

For people who want fairly low overall ups and downs I tend to suggest this mixture of investments at the moment:

30% BlackRock UK Absolute Alpha
20% Cru Investment Portfolio
20% Invesco Perpetual Monthly Income Plus
20% Invesco Perpetual Income
10% Neptune Global Equity

The chart shows how the volatilities differ and why so much is in the more stable ones (colors are red, blue, yellow, green, gray in fund order).

Depending on how much she wants in savings accounts this might be suitable for as much as 50% of the money.

gfplux

Hello granny1,
Your relative has by her actions shown you the type of investor she is - cautious.
you should guide her to only cash investments.
Have a look at national Savings http://www.nsandi.com/
Good Luck

[Deleted User]

granny1 wrote: »

She has approximately £100K sitting in several different savings accounts within one high street building society. Currently she is slightly worried with all the recent Northern Rock shenanigans about if they collapsed she'd lose all of her money.

Indeed, best to have no more than 35k with any one financial instituation, as per: http://www.moneysavingexpert.com/savings/savings-accounts-best-interest#howsafe

granny1 wrote: »

She has asked me to have a look at what can be done with it. It all needs to be low risk stuff, instant access is probably not needed (OK we will say 50% of the amount for instant access)

Bearing this in mind I'm not sure why jamesd is advising investments, typically 5 years minimum with more associated risk than savings.

granny1 wrote: »

Now I'm a complete novice on things like these so was wondering what advice people could give her? Is it best to split it up into amounts of £15K to £25K and just stick it into different savings accounts?

Pretty much. As per the above link you should be aware of the 35k rule.

1. In general, ISA's are a good place to start:

http://www.moneysavingexpert.com/sav...gs-without-tax
and http://forums.moneysavingexpert.com/....html?t=401374

2. I'd then suggest getting a decent instant access savings account(s):

http://www.moneysavingexpert.com/sav...st#topaccounts
and http://www.thisismoney.co.uk/saving-...&in_page_id=50

3. Fixed rate savings accounts are also a good option:

http://www.moneysavingexpert.com/sav...interest#fixed
and http://www.thisismoney.co.uk/saving-...&in_page_id=50

Finally, an appropriate quote from: http://www.moneysavingexpert.com/savings/savings-accounts-best-interest

Got big savings and want to keep your money in once place?

If you've a lot of cash (well over the £35,000 amount) and the safety factor worries you, there are two places that give 100% guarantee on savings, Northern Rock and National Savings & Investments, as they are currently owned by HM government. Yet as the rates don't tend to be that good, be aware that by hedging for safety you're sacrificing interest.

The best paying Northern Rock account is the eSaver which pays 6% AER on balances above £1. With NS&I the best option is its Index-linked Savings.

granny1

Excellent advice from all

I'll have a look into it and let her know, and see what she thinks. I'll do some research following the links you've all posted!

Thanks again

Ben

PS I'll probably be back asking more questions once I've had a look!

jamesd

davidmt83, the question was about investments that are low risk with a 50% in instant access constraint. So I mentioned a single investment and a mixture that could meet that criteria.

My guess is that she won't be comfortable with anything other than savings accounts or NS&I but it's worth ensuring that she's aware of the range of options available, particularly the relatively new BlackRock and Cru options that are both low risk and deliver greater returns than savings accounts, with better tax treatment.

If she's living off the proceeds from this money then it is long term investing, unless she's expecting to die in the near future. Even average life expectancy takes her to ten years from now and there's a substantial chance of living well into her nineties. That's easily long enough to halve her income if she relies on savings accounts and NS&I.