Finance/Investment tips?

the_jaffa

I've just received a reasonably decent, but not life changing, lump sum (£26,000) but I'm not sure what to do with it really.

I'm in my late 40s with no real pension to speak of (lots of tiny bits dotted around but none are worth much) so I'm thinking about just adding the lot to my pension. Is this a sensible option? If I understand it correctly, I will receive tax relief on it so gain a decent amount by putting it in there.

Any suggestions would be appreciated.

Cheers

RaymondLin

Not specific investment tips but the current school of thought are

1 - do it regularly and often
2 - dollar cost average
3 - never time the market
4 - don't put all your eggs in 1 basket
5 - don't invest in stocks of companies you don't understand
6 - Index funds out performs trying to pick best stocks in the long run

In the short term, high interest accounts, plenty now give over 2% with immediate access, Chase, Santander etc.

roberty

^^ this

CMW335

Not sure what the market is like where you are but that would just about be enough to get a Buy To Let Investment where I live returning net income of £450/500 per month with an interest only mortgage or you could go with repayment mortgage and let tenants pay it off for you

VimFuego

can't argue with anything @RaymondLin said. My current "strategy" for a similar sum is I'm drip feeding £1000 a month into a tracker ISA fund over the next couple of years, as well as paying into my pension from my salary. Once my investment pot is all invested, then I'll lower the amount each month and pay in whatever's leftover from my salary. 

chrisj1602

Is buy a vintage guitar a bad answer?

stickyfiddle

Buying property right now would be extremely brave. 

Wis for Raymondo

CMW335

stickyfiddle said:

Buying property right now would be extremely brave. 

Wis for Raymondo

It's worked out great from me

RaymondLin

CMW335 said:

stickyfiddle said:

Buying property right now would be extremely brave. 

Wis for Raymondo

It's worked out great from me

Only if you got a mortgage like a few months ago and locked it in for the next 5 years at something like 2%.

Right now, you are going to get like 6.5%.  Some lenders have pulled all their fixed rate products and going on tracker only.

HerrMetal

Personally I'd stick £20K into an ISA rather than a pension. Less restrictions on when you can access the money and the ISA is tax free to access unlike a pension which has tax advantages paying in, but pension income is then taxed once you get above the allowance - currently £12.5K.  The State pension currently uses up about £10K of that allowance. 

Oh, and spend the other £6k on having fun.

RaymondLin

If you earn under £37k annually then you can have up to from £1,000 interest without paying tax.  If you earn above that, the cap is £500.

£26k at 2% get you roughly about £500-600 over the course of the year, not a problem if you earn under £37k.

Ossyrocks

chrisj1602 said:

Is buy a vintage guitar a bad answer?

No, I don't think it's a bad answer. Since 2019 I've invested just over £10k in vintage guitars. Right now I think I could realise just over £14k if I sold them. And that's priced realistically for sale, not going off dealer advertised prices.

But there's always uncertainty about where the market will go in the future.

Keiko

Get yourself a nice pre-cbs strat and watch it appreciate. Just make damn sure it's legit.

Keiko

chrisj1602 said:

Is buy a vintage guitar a bad answer?

No. Invest in things you enjoy, and what you are knowledgeable about.

the_jaffa

Thanks for the tips.

I know nothing at all about investing etc so don't understand Raymond's first reply other than the obvious bits.

Herr Metals advise is nice and simple which appeals.

I'll look into and research what's been mentioned though, so thank you.

tony99

stickyfiddle said:

Buying property right now would be extremely brave. 

Wis for Raymondo

Careful with investment advice from Raymond. My house is now full of Lego and my missus has left.

RandallFlagg

RaymondLin said:

Not specific investment tips but the current school of thought are

1 - do it regularly and often
2 - dollar cost average
3 - never time the market
4 - don't put all your eggs in 1 basket
5 - don't invest in stocks of companies you don't understand
6 - Index funds out performs trying to pick best stocks in the long run

In the short term, high interest accounts, plenty now give over 2% with immediate access, Chase, Santander etc.

^^ This, and now is a great time to buy into the stock market, everything is on sale.

Grampa

If you own your own property you can do a lot worse than investing in that. There are several things that can be done that will add more value to the property than the project outlay (Google for ideas). You will also benefit from any upgrades whilst living there. Apart from pensions our primary investment platform for the past 40yrs has been property and it's served us extremely well.

d8m

https://www.barclays.co.uk/savings/instant-access/rainy-day-saver/

Not a huge windfall but if you are already with Barclays this an easy easy £250 over 12 months at current interest rates.

RaymondLin

d8m said:

https://www.barclays.co.uk/savings/instant-access/rainy-day-saver/

Not a huge windfall but if you are already with Barclays this an easy easy £250 at current interest rates.

I’m doing that but it caps out at £5k.

then stick the other 20k at Santander with their limited edition account, which applications close end of this month. It’s about 2.7%.

boogieman

If you can afford to tie up the money for 12 months you can get over 4% pa interest from a bond. Have a look at Martin Lewis’s Money Saving Expert site for the best current deals. Instant access will get you lower rates but you can still get 2.75% with Santander.