Low risk investing of £175K?
Discussion
Looking for suggestions for risk free/low risk places to park £175k for a couple of years.
I'm inheriting from my parents who have now both died, and after clearing the mortgage, maxing out Premium Bonds & ISA's for me and the wife I should be left without £175k. I am in a very good public sector pension and will be retiring in 18 months, so pension is covered.
Because I am so appreciative of my situation I don't want to put the money into risk investments to chase good returns, I'm happy to just keep up with inflation so that the money effectively retains it's value over the next couple of years to give me time to take stock and ponder further.
Is it possible to maintain inflationary values whilst having no risk, or at east low risk? Would it need to be NS&I Bonds etc?
I'm inheriting from my parents who have now both died, and after clearing the mortgage, maxing out Premium Bonds & ISA's for me and the wife I should be left without £175k. I am in a very good public sector pension and will be retiring in 18 months, so pension is covered.
Because I am so appreciative of my situation I don't want to put the money into risk investments to chase good returns, I'm happy to just keep up with inflation so that the money effectively retains it's value over the next couple of years to give me time to take stock and ponder further.
Is it possible to maintain inflationary values whilst having no risk, or at east low risk? Would it need to be NS&I Bonds etc?
When you say "pension is covered", do you have any head room for Pension Tax Relief for the past 3 years? That's where my money would go first in terms of wrapper as it's an immediate yield with zero risk even if you keep it in cash, irrespective of other pension arrangements.
Unless of course you have other plans in 2 years time and need the capital then.
Alternatively for the balance and assuming you're unlikely to ever need that noney, start gifting it to your kids if you have any. That will probably save them f
k tons in inheritance tax if you survive for 7 years 
Unless of course you have other plans in 2 years time and need the capital then.
Alternatively for the balance and assuming you're unlikely to ever need that noney, start gifting it to your kids if you have any. That will probably save them f
k tons in inheritance tax if you survive for 7 years ^^^^ forgive me if I have interpreted this wrong, but your advice seems to be best suited to someone that is in the higher rate tax brackets. I think it is marginal at best for basic rate tax payers to continue maximising pension contributions because there is a chance that higher tax rates will be applied in the future than is currently being offset.
Seriously though, securing a ‘real’ yield over the next 18m-2yr risk free is going to be a challenge. 2yr Gilt yields broadly inline with inflation. Gilts of course can hold risk unless you can guarantee you will hold to maturity. Zero’s can offer better (lower) tax. Cash rates will attract tax on interest and will usually trend down with BOE interest rates.
Suggestion above re Gold/silver should be considered high risk.
Suggestion above re Gold/silver should be considered high risk.
You say low or no risk which really means savings accounts or short dated treasury bonds (trading below par) held to maturity.
If you are a low rate tax payer then not a lot I. It, if you are higher rate then bonds have the big advantage of being tax free in the capital gains element.
DYOR of course but that’s my take on it.
You won’t get much above inflation but then again you can’t expect to with very low risk.
If you are a low rate tax payer then not a lot I. It, if you are higher rate then bonds have the big advantage of being tax free in the capital gains element.
DYOR of course but that’s my take on it.
You won’t get much above inflation but then again you can’t expect to with very low risk.
How do you define low risk?
An investment almost always carries some degree of risk (and risk can defined a few ways).
If you truly want zero risk and to be sure that if you put £175K in there is always at least £175K showing when you check the balance then you most like want to look at savings products.
An investment almost always carries some degree of risk (and risk can defined a few ways).
If you truly want zero risk and to be sure that if you put £175K in there is always at least £175K showing when you check the balance then you most like want to look at savings products.
I'm 53 and a 20% band tax payer, and I doubt I'd fit into a GT3 (which won't tow my caravan either 
)
I don't see me needing the money anytime soon, I'm fortunate in that I'll get a decent lump sum from my pension when I retire in 18months which can help with a car upgrade, some nice holidays and spend a bit on house furnishings etc. Can't see my son buying a house in the next 5yrs, in any case he's been left a decent amount from my mums will as it is.
So I won't need to access the inherited sum for the foreseeable. But whereas most folk would be wanting the best return on the money, I'm just extremely grateful to have it as I never expected it, so I'm happy for now just to inflation proof it so I know I'l always have the equivalent of £175k.
Ultimately I will always want to be able to help my son, which will in time equate to gifting him some of it and helping him through life.
Spent my adult life trying to keep my head above water financially and now all the busses seem to be arriving at the same time. Nice situation to be in, but it's in your younger years when you need the money.
)I don't see me needing the money anytime soon, I'm fortunate in that I'll get a decent lump sum from my pension when I retire in 18months which can help with a car upgrade, some nice holidays and spend a bit on house furnishings etc. Can't see my son buying a house in the next 5yrs, in any case he's been left a decent amount from my mums will as it is.
So I won't need to access the inherited sum for the foreseeable. But whereas most folk would be wanting the best return on the money, I'm just extremely grateful to have it as I never expected it, so I'm happy for now just to inflation proof it so I know I'l always have the equivalent of £175k.
Ultimately I will always want to be able to help my son, which will in time equate to gifting him some of it and helping him through life.
Spent my adult life trying to keep my head above water financially and now all the busses seem to be arriving at the same time. Nice situation to be in, but it's in your younger years when you need the money.
Edited by The Gauge on Sunday 7th September 15:03
Fixed rate for 2 years. I took advantage of the (temporary) relatively high rates of 5.7% for modern times, similar amount, made 15 grand for doing feck all, rates are lower now but mine ends on the 2nd October so I have to decide what to do next.
I believe that you can still get well over 4% on a 2 year fixed rate.
I believe that you can still get well over 4% on a 2 year fixed rate.
TheRainMaker said:
RSTurboPaul said:
Britannias or Sovereigns held physically in whichever metal(s) you prefer.
If you are doing this, you pay VAT on silver, always for gold.Gold Brits and Sovs are VAT-free at purchase.
Brits in Gold and Silver do not attract CGT, likewise Gold Sovs.
bhstewie said:
hstewie said: How do you define low risk?
An investment almost always carries some degree of risk (and risk can defined a few ways).
If you truly want zero risk and to be sure that if you put £175K in there is always at least £175K showing when you check the balance then you most like want to look at savings products.
But it won't be 175k when inflation is taken into account!An investment almost always carries some degree of risk (and risk can defined a few ways).
If you truly want zero risk and to be sure that if you put £175K in there is always at least £175K showing when you check the balance then you most like want to look at savings products.
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