Investment & Investing

Why 4 years?

Is there a specific date at which you'll need it (e.g. uni fees for kids or something) or is that just a rough timeline where you might move house or retire or whatever? Probably makes a difference as to what you do with it

Because reasons.

P2P lending probably fits your criteria. I wouldn't put all of it in them, but some of it.
There are some sites which have very good records, eg
Loanpad
Capitalrise
Kuflink.
The first is 6.5%, 2 months access, the other two are higher rates but longer tie in. I have some money in all three and am happy with how they've gone.

For four years, some sort of bitcoin exposure makes sense, as you would expect to get a full cycle. PPINGTF but no one who has held bitcoin for four years has ever lost money

Can you get 4% easily after tax? Even that's a bit tricky

• £150k in premium bonds seems pretty good to cover the 1-year and 3-month access
  
• Somewhere between £20k-80k can go into ISAs by April next year
  
• Offset mortgage could be efficient if you still have a mortgage
  
  

Low coupon gilts might be next best option as there's no CGT? Would get around 4% right?

Can you get 4% easily after tax? Even that's a bit tricky

Well, with these kinds of sums you're trusting things to a "Wealth Manager" who aims to get you >7% (highly dependent on your risk profile) for a fee that's in the 1-2% range.

I'm just wondering if anyone here has any experience of that and the figures they're seeing.

I'm not looking to make the investment decisions myself, paying someone who knows what they are doing 1% is a much better option.

Right. Sorry, thought you were doing it yourself. Either way the manager needs to get you at least 5% after tax, otherwise you're paying them £5k a year for worse performance than plain old gilts (TG29/TN28?)

Scratchcards?

Whenever I’ve had to park a lump sum for a while in the past I’ve been lazy and used whatever Martin Lewis is highlighting as best option, ensuring to stay under the 85000GBP FCSC cap with any institution , but with the sums you are talking I guess there’s more incentive to squeeze additional incremental fractions of percent of interest out of it.

From your reference to the ability to park 150K in PBs you obviously have additional adults (or fake IDs) that you are able to use allowances for, so maybe pushing 60K each year into cash ISA with best rates is one part of tax minimisation strategy.

I know someone who had a conversation with a wealth management company about handling a similar sum so I’ll see what advice they got if they are happy to share

paying someone who knows what they are doing

Yeah, they know what they are doing; taking your fee and adding it to.their sales target. And aggregate returns equals market returns minus fees.

Sorry, unhelpful reply. I really don't know what I'd do in your situation.

Edit: having thought about it a little, with a 4 year time frame I'd be looking at tax efficiency as others have said, and cash and fixed income for all or the vast majority of it.

From your reference to the ability to park 150K in PBs you obviously have additional adults

One child so she can hold £50k of Premium Bonds too. Perfectly legal. Just have to cash out before she's 16yo otherwise she gets complete control (just checked this as I'd assumed it was 18). (It'd be slightly less than £50k in her name as she already has some PBs with money she has been given, that's not mine to fuck around with.)

As you say, ISAs could help with another 3 x £20k (or 6 x £20k if I keep a chunk for after 6th April 2025) but there would still be more than half of the lump left to deal with.

Edit: having thought about it a little, with a 4 year time frame I'd be looking at tax efficiency as others have said, and cash and fixed income for all or the vast majority of it.

Yes, that's what I'm saying too. I was asking if anyone has any specific advice/experience (especially with any "wealth management") rather than general "stick it somewhere that's tax efficient" advice.

No problem if no-one has any, didn't expect it and I may not end up in this situation but I'd like to have a better understanding of things in case I do.

Scratchcards?

I like it. I'd write a book about it and/or make a film and then hope to make a few £££ off that too.

P.S. I get the back reference.

Nice. Realising I should have suggested Amstel.

Mstr is having a nice pullback... Chase dumps not pumps

Ok so verbatim from their financial advisers response that was shared to me (and I would note that this was for an investor that may have expressed a preference for return of their capital rather than return on their capital) but nonetheless my opinion on it is that 1) the forecast returns are probably realistic for long term and vehicles that suggest consistently delivering more than that are maybe not everything they seem and 2) that’s a hell of a fee burden both for the octopus scheme and the ifa initial and ongoing costs.

“We discussed the option of using Business Relief as a diversifier to what you already hold directly. I highlighted the Octopus proposition as a potential alternative and I have attached some information about this scheme. The scheme is traditionally used for mitigating IHT but we have been using it more recently as a proxy for capital preservation and modest growth. The target annual growth is 4.2% which nets down to about 3% after Octopus take their fees. The growth rate is not capped but it is unlikely to be significantly higher than 3% over the long term. Another company we use offer a similar strategy but it is less diversified than the Octopus offering, although their target growth rate is higher at around 4.5% net of charges.
As intimated, typically our initial charges range from 1% to 2%, in this instance I can confirm that we would apply an initial charge of 1.5%. Our ongoing charges typically range from 0.5% to 1%, if the total investment was below £500,000 then the ongoing charge would be 0.70%”

I'm just wondering if anyone here has any experience of that and the figures they're seeing.

Experience of getting better returns than that, yes, but not of using a wealth manager.

Tldr, stick it in a tracker and be fairly certain it’ll outperform anything managed…?

Which tracker would you suggest for “low-to-medium” risk? For a 4 year time frame I don’t think any equities qualify.

Jez, I'm a moron.

I've had my trading 212 account for just over a month. After messing about with small amounts of money getting comfortable that it wasn't a scam I transferred a small ish amount of savings in to the account. As part of this my bank automatically set up trading 212 as a contact(it hadn't done this before) the same as my wife and sister etc. up until yesterday I've all ways started the process of putting money into my 212 account via the deposit money section of the 212 app. This time I was paying some bills after being paid and I used my bank contact details to send some money to my 212 account.

obviously the money hasn't termed up in my 212 account. After looking at the details further it turns out the reference number applied to trading 212 in the contact details on my bank looks like unique id applied to that payment I made at the time, rather than my 212 account in general.

It feels like a situation that should, hopefully resolve itself, its gone to the right place etc, I assume the reference is in someway associated to my account. I have messaged them but not had anything beyond and auto reply.

I'm normally so careful with this stuff, being the dick that always insists on paying a £1 to anybody new before making a payment etc. What a dickhead...

Anyway just a word of warning, not like you guys need it I'm sure.

It's not life altering money, but still rather not loss it.

Terms like low and medium risk are pretty subjective, but it is often about the portfolio mix as much as the specific investments, so you could have some tracker exposure, but not the lot - which makes sense as there is definitely a non-zero risk of a 2009-style stock market crash in the next four years.

A low risk portfolio might have 25% equities, a medium risk one 50%, etc. With the rest being bonds, cash, maybe a bit of property, etc.

4% after tax might be about 6% pre-tax, assuming a bit of sheltering, and back to 4% after inflation. Add a bit for a wealth manager:

The Financial Conduct Authority (FCA) says advisers charge an average
of 2.4% of the amount invested for initial advice and 0.8% a year for
ongoing advice (1.9% p.a with underlying product and portfolio charges
factored in).

Probably gets you back to needing 6% in real terms / 8% after inflation. A portfolio made up of mainly bonds is not going to get that so it would have to be 'medium' rather than 'low'-risk to stand a chance.

I can see how you could have done this as I almost did exactly the same thing yesterday!

I expect they will be able to sort it out and return your money.

Best to do a transfer from inside the app, then it assigns references automatically.

Best to do a transfer from inside the app, then it assigns references automatically.

Yeah 100%, rightly or wrongly I'm a little pissed that my bank set them up as a contact as part of the process. if they hadn't of done that it wouldn't have have occurred to me to do it that way.

Had not heard of P2P pending before and the rates seem very good. Assuming there is a drawback, what is it?

It's a high risk investment not covered by the £85k savings guarantee. Some of the early lenders went bust, there has been fraud and some people have lost their money.

Returns can be good but not something to do unless you are comfortable with the platform and understand the risks.

Have I understood this correctly from reading the last couple of pages that, basically, if you have a lot of cash in savings (ie much more than your ISA allowance) then it’s quite difficult to maintain its value and make it grow in relation to inflation, particularly if you’re a higher tax rate payer? What are the best things to do when you’re sitting on a lump sum like that? Asking out of interest and I guess for the benefit of the younger members who might be sitting on a lump sum like inheritance or for house deposit etc.

Have I understood this correctly from reading the last couple of pages that, basically, if you have a lot of cash in savings (ie much more than your ISA allowance) then it’s quite difficult to maintain its value and make it grow in relation to inflation, particularly if you’re a higher tax rate payer?

If you want low-to-medium risk then yes, although technically it's more that no-one here has owned up to achieving it, which is different from it being impossible because no-one here has achieved it.

It's definitely achievable at higher levels of risk although, obviously, you may end up not achieving this and could end up worse off.