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Not my cash btw, belongs to my mum. Dad died suddenly from undiagnosed/poorly treated blood cancer back in october last year (one week after he retired) and they had £30k sitting in an isa account getting 1.6% interest which is a paltry amount. Now that the estate is all settled and she has a cheque for the amount I want to ensure she can make the most of her savings with as little as risk as possible, she doesn't have any real need to access the cash as she also has approx £13k in a savings account that she's going to use this year for a few windows/garage roof etc (mortgage free) so i guess she could tie it up for 3years or so as long as it made her money.
So?....speak to an IFA will be my first port of call but i'd like to have an idea what is possible and i thought i'd ask on here as there's bound to be someone who could offer a few pointers.
Cheers,
Put it into a stocks and shares ISA? Pick a reasonable looking ready made fund from the likes of Hargreaves Lansdown, can all be done online.
You'd need to balance risk against return and there is an awful lot of uncertainty right now. 3 years is still pretty short term for investment. Cash ISA or premium bonds are probably about as good as you'll get for zero risk. Stocks and shares ISA for a bit more risk but good chance of better return. That's probably what I'd do. A nice low cost fund. No effort, should do ok longer term.
Dad died suddenly from undiagnosed/poorly treated blood cancer back in october last year
A decent lawyer would probably be an excellent investment....
If you were that kind of person... otherwise short sterling.
If it was me i'd stick the 30k into premium bonds straight away, if you do it before end of Feb you'll get in the April Draw. That will give you a bit of time to think things through and also see what happens at the end of March re brexit. To be honest three years is not long in investment terms and the market sitch is 'likely' to be volatile in that time frame. The linky puts the Coventry BS Cash ISA as an interesting contender but over 5 years.
Obviously any debts I would clear first, depending on interest rates etc
My experience of FA's is that 30k is not enough for them to be terribly interested. 100k upwards maybe.
i'm not an FA
https://www.moneysavingexpert.com/savings/best-cash-isa/#fiveyearfixed
No advice but sorry to hear about your dad Kenny.
Amanda's dad also died quite suddenly last year so we both feel your pain.
Look after you're self mate.
Cheers for advice folks, much appreciated 👍. There’s no debts to worry about, her savings and dads paltry private pension paid to her for the next 5 years will see her through till January next year when she will receive her state pension so that’ll eventually give her an income of approx £12k/year.
I like the idea of premium bonds until we decide what to do with it/wait till the Brexit bomb settles, could be lucky I guess and even a small win may pay more than the 1.8% she’s been offered by The Scottish building Society (where the isa’s were previously held).
Ive never been in the position to worry about investments as my savings are in the minuscule 3figures so it’s a bit of a learning curve.
Ill check out the Hargreaves Lansdown/Coventry BS cash isa as advised above as a starting point 👍
Having just spent the best part of £2k on solicitors fees to deal with the isa’s and a few letters (5hours work apparently) I doubt my mum wants to see/speak to another solicitor/lawyer for the rest of her life
Cheers Stu, appreciated 👍, it was made worse by the fact that I had to tell them about my ms diagnosis last August as it’s now progressive and I can barely stand up never mind walk, so she’s got me to try and help now.......I’ve also my dads garage full of a lifetimes worth of engineering tools & equipment to deal with when I’m able, not looking forward to it, pass on my commiserations to Amanda.....it’s ****ing horrible to deal with no matter how it occurs ☹️
Our return on Premium Bonds is bigger than we'd get for an ISA
We had a similar situation last year and put it into premium bonds. I do think the present uncertainty makes bonds a great option. It's also good fun checking after every draw to see if you've won.
To achieve better than your current 1.6% would mean a bit of a punt. As suggested above, check out Hargreaves Lansdown (or similar). My Neil Woodford fund is doing quite well but I've had it for a few years now so the "blips" are cushioned out quite nicely.
Or Fundsmsith?
More importantly, commiserations on your loss 🙁
Sorry for your loss. I would put it into premium bonds till you decide what to do. You can keep topping up too so a good home for spare cash, up to 50k.
For any direct investment in stocks and shares it will be a rollercoaster ride. Say you spread it over 10 shares you could be looking at + or - % in capital in the first few years. Reinvesting the dividends gives you protection but it isn't for the nervous investor.
My elderly mother has premium bonds and gets quite excited on the draw days.
Whilst shares can go up and down, if you put the money in a fairly broad set (such as a ftse 100 tracker) they're unlikely to drop more than 10% in a year and extremely unlikely to drop more than 20%. Over 3 years, I'd be pretty confident you would come up 'up', and the risk of ending up with less than £25k is next to zero
If you invest into a single stock, or 2 or 3, the risk is much greater (can genuinely end up with nothing) but so is the reqrd (more likely to end up with lots)
Premium Bonds give an equivalent to about 1.4% interest. Yes, there is a chance you could win a big prize, but there's also a chance you will win nothing.
Please don't take this as advice, because that's not really what it is. There will be more financially savvy people on here, than me who can say if this is a stupid idea....
But, have you investigated any of these peer to peer lending places, like funding circle? Might be another option worthy of consideration.
Money Saving Expert has a useful guide: https://www.moneysavingexpert.com/savings/peer-to-peer-lending/
Whilst shares can go up and down, if you put the money in a fairly broad set (such as a ftse 100 tracker) they’re unlikely to drop more than 10% in a year and extremely unlikely to drop more than 20%. Over 3 years, I’d be pretty confident you would come up ‘up’, and the risk of ending up with less than £25k is next to zero
Have a look at a 30-year FTSE chart and you'll see that a 10% drop is frequent, at least 10, 4 falls of around 20% and a couple of periods in which the falls reach over 40ù, against a background of inflation so you should really inflation adjust. And don't forget that even if a fund manager matches the market you won't because you'll be paying them fees. Dividends these days often don't even cover management and bank fees. Then there's the 2% or whatever you lose the day you buy in.
I was heavy on shares up to March 2000 when I sold the lot and have since been caustiously buying dips. My last minor buy was mid December. Overall I'm light shares at the moment because I don't see shares outperforming fixed income enough to be worth the increased risk. Don't put all 30k in shares OP. I wouldn't go more than 30% with my parents money at present and expect to be significantly down on that at some point in the next three years.
FTSE 5000 is not imposible.
But, have you investigated any of these peer to peer lending places, like funding circle? Might be another option worthy of consideration.
This is a very good suggestion - I'm currently earning 5.7% after fees and bad debt.
A bit less risk - check out RateSetter - they're offering 2.8% on their "Rolling" market product.
Have a look at a 30-year FTSE chart and you’ll see that a 10% drop is frequent, at least 10, 4 falls of around 20% and a couple of periods in which the falls reach over 40ù, against a background of inflation so you should really inflation adjust.
Why would inflation be factored in? if you factor it in to savings account the return is negative..
You do get the odd, sharp drop in something like the the ftse index, which is why investing over a short period of time (say 6 months) is risky. However, over a 3 year period, looking at total return, not just the index, you see a different pattern.
The only long-ish term (15 year) total return chart I can find is here - http://www.swanlowpark.co.uk/ftseannual
the only 3 year window over the last 15 where you'd have been significantly down is 2006-2008 - a loss of 12%. I admit that chart doesn't go back to the .com crash, where there'd probably have also been a window where you loose, but if you compare that to other windows (2003-2005 : 158% return, 2009-2011: 140% return) some people may find the risk is reasonable.
You're right there are some fees, but for a tracker you've blown them out of proportion - the HSBC tracker through hargreves has (for example) a 0% initial fee and a 0.17% ongoing fee -> https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/h/hsbc-ftse-100-index-class-c-accumulation - obviously a managed fund has more significant fees.
I wasn't suggesting that a tracker is the *right* investment, just that I occsaionally think people avoid this for the risk that 'all my money might be gone' - like its gambling on the horses. With a sensibly spread portfolio your risk is reduced - not to zero, but if you could deal with the small risk of losing a proportion of money (in some circumstances you can, in some you can't), then the potential rewards can be significant - hence why pension pots are nearly always invested in shares up to the last few years.
Don't have much to add beyond my sympathy, but on Stocks ISA I was advised to drip feed it rather than drop all in at once - this may impact plans if you're only looking at 3 years. I'm sure there's a good reason for that I can't remember ...
Average purchase price, less likely to drop the lot in on a high. Again if you look at the last 30 years there have been plenty of buying opportunites and there will be in the future. I don't think now is one of them. I added a bit in mid December (CAC at 4650) for the first time since before Macron was elected when I'd taken a punt on the French market responding positively to a Macron win (I'd have done better to go into a betting shop but that's not my style).
30k on red then a life of coke and smackwhores.
Cheers for all the good advice folks, I’m gradually educating myself as to what is best for my mum with the proviso that ultimately her cash must be secure with zero risk of loss which leads me think a five year bond with 2.55% interest would be in her best interest, and mine if I’m honest as I couldn’t handle the stress of market fluctuations, stress raises inflammatory markers that really **** with my ms and cripple me.
£30k at 2.55% fixed for 5 years (best I’ve found so far) would give her a return of almost £4K after 5 years, I’ve no doubt someone with experience would scoff at such a return but I need it to be simple, **** knows what’s going to happen to the economy after Brexit (sorry.....it had to rear its head somewhere...at least my mum calls out brexiteers as “****ing stupid ****s” when she hears them speil their shite) so I don’t wish to release my inner “Gordon Gecko” just as everything turns to shit.
She’s up for bunging a few £k in premium bonds though and treat them like a rainy day access account so I guess that’s as far a gamble as we’re both comfortable with.
If my dad was still alive then investing a certain amount would have on the plans as we would have his state pension along with the small ornate/engineering blacksmith jobs he planned to do but alas we’ve got to what’s best with what we have........so play it safe 👍.
Ta very much, appreciate all the advice and effort in replying. 👏