Bob McC
Living the life of Riley
I don’t.
lump sum - what options
- Thread starter 1964meb
- Start date
venton
pfm Member
You can get higher interest from bank savings than isas. It's worth knowing that "up to £5,000 of the interest received from savings can be tax-free. You can earn up to £17,570 a year in 2023-24 (as long as your personal allowance is the standard £12,570) and usually still be eligible for the starting rate for savings."
If your on low income it may be better to go with the bank interest.
https://www.gov.uk/apply-tax-free-interest-on-savings
If your on low income it may be better to go with the bank interest.
https://www.gov.uk/apply-tax-free-interest-on-savings
venton
pfm Member
"
If your other income is £17,570 or more
You’re not eligible for the starting rate for savings if your other income is £17,570 or more.
If your other income is less than £17,570
Your starting rate for savings is a maximum of £5,000. Every £1 of other income above your Personal Allowance reduces your starting rate for savings by £1.
Example
You earn £16,000 of wages and get £200 interest on your savings.
Your Personal Allowance is £12,570. It’s used up by the first £12,570 of your wages.
The remaining £3,430 of your wages (£16,000 minus £12,570) reduces your starting rate for savings by £3,430.
Your remaining starting rate for savings is £1,570 (£5,000 minus £3,430). This means you will not have to pay tax on your £200 savings interest.
"
Can also earn up to £1,000 of further interest on their savings without having to pay tax with the Personal Savings Allowance.
https://www.moneyhelper.org.uk/en/s...r 2023/24 it is,the starting rate for savings.
martin clark
pinko bodger
quite right: Might buy perhaps two or three quite-good fuses... according to some.
& if one did such - well, you're far beyond reason anyway & need your bumps felt.
Much better, more diverse thoughts in thread above already: pay-down even small debts carrying high interest; diversify the rest across a - fairly-small range of investments / exposure to risk, to your taste; pay for good advice to help that process/ against the kind of timescale you might want to draw on the capital you have in your hand, right now. Set your expectation lowish; enjoy ..later.
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Lucky you, mine reorganised my portfolio just before I retired and has cost me a fortune.
That is assuming you are earning enough to put those sums in as you are limited to what you earn in a tax year
Agreed - I was offering a counterpoint to the assertion not to put too much faith in an IFA.
JensenHealey
pfm Member
Without a thorough assessment of the current financial situation of the OP then all the various fishie suggestions are pointless. Does the OP have rainy day savings? What are yearly income levels like? Anything likely to change in the next few years? eg mortgage pay-off, perhaps an inheritance, or perhaps a previous investment might pay out... or a wedding to pay for, or a car to replace, or a house move envisaged.... there are so many things. Are pension provisions in place? It goes on.
This is why it is important to get an IFA involved - because the first thing they will (actually MUST) do is go through assets and incomes and situation before even talking about doing anything with a potential large 'investment'
This is why it is important to get an IFA involved - because the first thing they will (actually MUST) do is go through assets and incomes and situation before even talking about doing anything with a potential large 'investment'
Andrew C!
Been around a while....
This.
Ponty
pfm Member
Bang on. If it represents 100% of savings / investments the suggestions will be very different than if it was say a few % of net worth.
Cav
pfm Member
In a close to (early) retirement scenario from a well paying job most would already have earned all they need.
I took early retirement at 56 when 18 months would have netted £50k...
LecsonQuad
pfm Member
Anyone who doesn't think £50K is a large amount of cash lives in an elite world ...
Apart from spending it there are basically two options… saving it or investing it.
Saving it - maybe a 5% interest earning easy access savings account can be found, better still if it’s within a tax free cash isa account. 20k is the annual limit for an isa 40k if you have a partner to split it with. In a non tax free account you generally pay tax on interest earned over £1k pa. Premium bonds is also an option. Tax free winnings (large amounts possible)) and easy access.
Investing it is more of a risk but greater possible reward. Within a SIPP there are good tax breaks ( 20- 40%) and you can pick a fund to suit your appetite for risk. As mentioned A Vanguard Life strategy fund is a good global fund which spreads the investment risk.It is possible to get an average of 7% growth pa on top of the tax break.
With a little research there is no need necessarily to pay an ifa for investment advice on this size of fund.
Saving it - maybe a 5% interest earning easy access savings account can be found, better still if it’s within a tax free cash isa account. 20k is the annual limit for an isa 40k if you have a partner to split it with. In a non tax free account you generally pay tax on interest earned over £1k pa. Premium bonds is also an option. Tax free winnings (large amounts possible)) and easy access.
Investing it is more of a risk but greater possible reward. Within a SIPP there are good tax breaks ( 20- 40%) and you can pick a fund to suit your appetite for risk. As mentioned A Vanguard Life strategy fund is a good global fund which spreads the investment risk.It is possible to get an average of 7% growth pa on top of the tax break.
With a little research there is no need necessarily to pay an ifa for investment advice on this size of fund.
Cav
pfm Member
Many here cannot be short of a few bob...
venton
pfm Member
Bear in mind cash ISAs can always be withdrawn, even if you lock into a three year deal. There will be a small financial penalty eg 90 days interest. If you think, but aren't 100% sure, you can lock the cash away it makes sense to do so. There are decent deals on non ISA investment bonds, but they really are locked in for the duration chosen.
IFA's don't exist to advise you what to do. They exist to earn from you.... They're lawfully obligated to assess and record your attitude to risk (that's why they document it and ask you to sign , so that they're covered) and then they offer you investments according to your risk appetite. For which they, and the companies providing investments, take a cut. No surprises there.
But they don't offer advice over your general decisions, like when you could/should retire, how much income you need, should you pay your mortgage off, do you want a Ford or a BMW every five years , should you invest in property or shares etc etc. If you invest by way of IFA introduction, be sure to understand that whether your investment rises or falls, both the IFA and the investment house continue to benefit. If you hand your money over to an investment company, exactly who's asset is it?
But they don't offer advice over your general decisions, like when you could/should retire, how much income you need, should you pay your mortgage off, do you want a Ford or a BMW every five years , should you invest in property or shares etc etc. If you invest by way of IFA introduction, be sure to understand that whether your investment rises or falls, both the IFA and the investment house continue to benefit. If you hand your money over to an investment company, exactly who's asset is it?