Recently received my share of a payout from a policy on joint lives of my parents and which fell payable on my Mother's death. Policy was in trust for my sister and I and was taken out by my Father approx 30yrs ago with express intent of us having funds to pay IHT rather than borrow against estate. In prevailing circs it looks as though IT will be nil or nugatory. We were advised this is a tax free gain.
Also just got Mrs B's Teacher's Pension lump sum.
Contemplating whether there is any advantage in putting cash into ISAs to use 2001/18 allowance.
We're both basic rate taxpayers. So far as I can tell there's nogain in using an ISA unless we anticipate interest payable in 2018/19 exceeding the £1k annual limit (i.e. £2k between us). Certainly not going to be anywhere near that amount in 17/18.
Am I right?
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Have you got any other savings which might add up to over 1000 pounds in interest.
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>> Have you got any other savings which might add up to over 1000 pounds in
>> interest.
Yes, we had other savings too but I think we'd need to be getting well over 1.5% to even get near £2k interest.
Mum's estate is still awaiting probate and will include cash from sale of her flat and some investments which we'll probably transfer intact. Don't want to get much tied up in fixed period accounts with exit costs as I'll be getting proper advice on longer term investment once the amount payable has crystallised.
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Buy something nice. Rolex are a good investment these days..my Submariner has gone up by a grand in 3 years ! :-)
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Are they? It hadn't occurred to me that mine would have gone up in value.
But you probably have to know where the original boxes and certificates are, and I wouldn't have a clue.
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....I think that probably the main advantage in investing in an ISA year on year is to protect a growing investment from tax, and patently, given current tax practice, this shows little if any advantage in early years, but after a few years, can negate tax payments. You can't, of course, retrospectively move money into an ISA.
Whether it is worthwhile doing, however, depends both on the level of investment you will make over a good few years, and, possibly more importantly, any schemes/strategies that may now provide somewhat better returns than a tax-free ISA, both currently and in the future.
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Can you not put funds into a Stocks & Shares Isa and leave in cash for the time being? That way at least you have used the allowance for 2017/18, and can always withdraw out of that tax free umbrella should you so wish.
I have a Hargreaves Lansdown S & S ( self select) Isa so I do my own online dealing.
On a precautionary note, I transferred in several years worth of Cash Isa’s last year because interest rates were so low....with mixed results across my varied portfolio. I’m down quite a bit but you live in hope!
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If it is long term savings, have you considered stocks and shares ISAs?
If you want a cash return with no risk (except inflation) to capital, then check to see if NSI has anything worthwhile to offer.
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>> If it is long term savings, have you considered stocks and shares ISAs?
There will be long term savings, indeed most will be long term, but I think I need IFA type advice before committing to anything.
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I think as to what to invest in brompt, it's perhaps best to ask yourself what do you want the money to do? Then over what time frame and what is your attitude to risk?
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What Sooty said but with emphasis on your attitude to risk. Not wishing to teach any egg sucking, but it's very important to understand your goals, needs and restrictions before considering any particular investment.
Start from the other side;
- how bad for you is it if it gets smaller.
- how bad for you is it if it is tied up and you need it in a hurry
Then compare that to;
- how good for you is it if it gets bigger.
- how good for you is it to have it liquid
Bear in mind;
- do you have specific purpose for some or all of that money
- do you have any specific timeframes in mind for that money
When you have those straight in your mind, that is the time to go and consult with a trusted IFA. Finding/choosing that person is very important.
[I am assuming you'd never countenance the level of risk which can result in total loss]
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... and if you are feeling the need to consult an IFA do make absolutely sure you are clear on what fees will be payable and what you are getting for it before you start.
A stocks and shares ISA would be my personal choice too, you have a wide range of investments available, but they are not for everyone.
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Ratesetter are currently offering 5.1% on 5 year ISA (5.4% yesterday) and 3.4% 1year. P2P may not be for everyone, but it's fine for me as a dabble.
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Take your money and buy property. Near a Uni for example.
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>> Take your money and buy property. Near a Uni for example.
It's an idea but sis and I already rejected keeping Mum's flat as a BTL investment. Not student territory admittedly but good for professional couple/flat-share. Too much hassle to manage.
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Likewise with my late Aunts flat....a short walk to Saltaire and 20 min rail commute to Leeds. We got it valued for probate purposes in its current condition, took lots of photos and video, then totally gutted it and transformed it into a highly desirable 2 bed flat. With both outdoor parking, a garage, and pleasant communal gardens.
Sold before we even completed the work, but as you say, too much hassle to manage. Far better to sell it, split the proceeds with my brother, and tuck the money away for a rainy day.
As if.........it rains a lot in Ribblesdale
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>> too much hassle to manage.
>>
Not necessarily, it all depends. I did it very successfully for several years. I think the secret is to choose your tenants carefully. Get professionals to check their references.
I used an agency to find the tenants, check their refs, take and hold the deposit. I collected the rents thereafter.
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"Too much hassle to manage."
That would be my take on the situation; it isn't worth it unless you're going to make a business of being a landlord.
A couple who we know in a nearby village inherited a house when one of them's mum died; they decided to let the bungalow - it was only a couple of doors away from their own place. I can't remember the exact sequence of events but, after a short while, they found themselves letting to a DHSS(?) couple. Things started to go downhill; e.g. every time a lightbulb blew, they would be round demanding that a replacement be put in, they didn't look after the place or the garden, then the chap left ...... and then the rent wasn't paid etc. Our friends found it all very stressful and, in the end, they had to go to the trouble of evicting the tenant. After that brief dabble with being landlords, they quickly decided to sell the bungalow.
On the other hand, another friend inherited some money and invested in a house; simultaneously, his 16-year old daughter became an unmarried mother so he was able to let the place to her, the rent being paid by social services(?). With the money that he made from that arrangement, he invested in another place, then another and joined with more investors to form some sort of company. They bought cheap places in the Newcastle area, did them up, and let them to students. They used the cheapest of fittings and when tenants left, they simply replaced those fittings with new. Although he has now retired from his job, he still has to give 1 or 2 days a week as his input to the business.
Last edited by: Haywain on Wed 4 Apr 18 at 08:55
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>> "Too much hassle to manage."
You really need to chose your area and property type. While property prices close to me are high, rental income as a % is low. To make it worth while you need 5% annual return, and here only 2.5 - 3% is possible. Ironically the more expensive the purchase price the lower the rental return.
As a long term investment therefore property is fine, as an income stream on capital its not. As I stress round here that is
Elsewhere tho, as previously said, a university town is ideal, an HMO if possible. Your average 3 bed terrace or semi will support 5 tenants and large rental returns.
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Watching a few episodes of "Can't Pay? We'll Take It Away" should be enough to keep people off direct rental property investment.
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>> Watching a few episodes of "Can't Pay? We'll Take It Away" should be enough to
>> keep people off direct rental property investment.
"nightmare tenants, slum landlords" is also good viewing, but only if you're not one or the other. Loads of landlords being ripped off by tenants who know how to cheat the system.
Last edited by: VxFan on Thu 5 Apr 18 at 10:33
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>> Watching a few episodes of "Can't Pay? We'll Take It Away" should be enough to
>> keep people off direct rental property investment.
One of the tenants whose eviction was filmed in that series has won damages for breach of privacy:
www.judiciary.gov.uk/wp-content/uploads/2018/02/ali-v-channel5-judgment.pdf
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Mrs B's lump sum, sale of the flat and other investments that could be used would surely produce more than a £2K yield in any hallway decent investment plan, hence indicating an ISA. I would go for the stocks and shares variety and - based on my experiences with four of them - would avoid financial advisers and follow instead a familiar investors dictum of DYOR (Do Your Own Research).
You will need an ISA provider - a "platform" in the jargon. Hargreaves Lansdowne is probably the most celebrated but I prefer to use an old-fashioned stockbroker, although that is an expensive way to go.
What yield will satisfy you? I believe the FTSE All Share index shows about 3.4%. Natural greed leads me to seek 5% but the payoff is twofold, risk and low growth. As for the latter, it is greatly advantageous to forego the income and simply reinvest it in the ISA to gain the comforting advantage of compound interest. There are ways of doing this automatically.
Hargreaves and other providers have free dummy investment facilities enabling would-be investors to try out their ideas. The one I use is found at www.iii.co.uk. I have used it for years without investing a penny with them.
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Shares can be risky and Isa's pay little in return.
Around here by a house for under 100 grand and rent out.Zero has a point in the student area you could make money.
I thought about it but all the hassle of renting out keeping the property in good nick .
I just want an easy life now too busy looking after the two grandchildren two days a week.
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>>Shares can be risky
They can, and are contra-indicated for the elderly, who haven't much time left to wait for corrections to losses This is why I have less than 1% invested in shares (actually, it, as I only have one).
The rest is in safer investments - bonds, bond funds, other funds (unit and investment), ETFs, trackers and preference shares.
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Don’t totally agree with that. For any money likely to form part of inheritance shares are probably the way to go fo that portion of savings you won’t be needing yourself. Let the beneficiaries take the risk!
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Have most of my S&S ISA £ in Legal and General UK Index tracker fund that pays me the income rather than reinvesting it directly (distribution rather than accumulation fund)
Obviously some risk to capital but I only buy more after a decent fall in the Index.
As far as longterm investing goes it is merely a flutter in comparison to my NHS pension which costs me about 3 grand a month.
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That is a lot of money to pay for a pension Lygonos.
My daughter is a nurse I know she pays a decent sum for retirement.I never thought about my pension when young you never do.
Lucky B/P pension is not to bad plus my state pension.I don't want any more stuff just a decent quality of life.Health is more inportant.
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>> NHS pension which costs me about 3 grand a month.
Quite a lot. But I don't know how the GP pension scheme works. A quick Google suggests 14.5% contribution if they earn over £111,377. But that's not £3K is it.
I pay into my pension about what my wife take home a month and it's nowhere near £3K. I get extra too from my employer due to a closed final salary scheme.
The default where I work is someone pays in 5% and the company will match it and get another 5%. So even if the £3K is personal/company combined then where I work someone would need to be earning £30K a month to pay £3K into their pension ;-) If I earned £111,377 suddenly my employer would probably ask me to leave and pay me off but they'd still not be paying £3K a month.
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>> Quite a lot. But I don't know how the GP pension scheme works. A quick
>> Google suggests 14.5% contribution if they earn over £111,377. But that's not £3K is it.
While an increasing number of GPs are employees I suspect Lygonos is a partner and as such will presumably be paying both employee and employer contributions out of his turnover.
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If I earned £111,377 suddenly my employer would probably ask me to
>> leave and pay me off but they'd still not be paying £3K a month.
>>
Does no one in your organisation earn more than £111k?
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>> Does no one in your organisation earn more than £111k?
Of course they do. And the most senior probably earn millions and pensions for them is another ball game altogether.
The salary range for my role code (2 least senior and 6 most senior) will go from a median of £36k to £103k. Comparing to the wider market the equivalent goes from £41k to £117k.
My comment on me leaving is my employer pays in a lot more than 5% for some of us. Of course it might be %age of less than you get elsewhere. But I also take 40 days annual leave too which is nice.
Last edited by: rtj70 on Thu 5 Apr 18 at 20:30
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Comparing to the wider market the equivalent
>> goes from £41k to £117k.
That's a very precise figure for wider market wages.
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It is and was accurate when the document I have was published. I could have been more precise.
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It just seemed an unusually specific number when talking of a wider market. Normally rounded up or down in 5/10k amounts.
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An ISA and Savings Question - R.P.
