Investment question

[miniman]

How much, roughly, could a cash investment of £250,000 return per month, and where would one put such a sum to achieve a good but low-risk return?

Also, what would the tax implications be for a pensioner on that return?

Thanks :)

[alfaman]

miniman said:

How much, roughly, could a cash investment of £250,000 return per month, and where would one put such a sum to achieve a good but low-risk return? Also, what would the tax implications be for a pensioner on that return? Thanks

assuming Mr/Mrs pensioner is web literate .... the best on-line savings accounts yield c. 5% with introductory bonuses = about £1k per month - less whatever tax bracket they are in.

The redemption yields on ZDP's are slightly more - and roll up as Cap Gains (potentially no tax) - but you are into a different risk profile .

[2 Smokin Barrels]

Is the person an actual or potential pensioner? Only reason I ask is A day gives a chance to convert £250k into substantially more.

[miniman]

2 Smokin Barrels said:

Is the person an actual or potential pensioner? Only reason I ask is A day gives a chance to convert £250k into substantially more.

Actual. A day?

[2 Smokin Barrels]

It's 6/4/6, when all the pension rules are revised. Scope for lobbing money in to get the tax relief, depending on circumstances.

[clubsport]

Assuming you are a standard rate tax payer, Ing direct at 4.75% currently gives just under 850 quid a month per 250k invested....allegedly

[jessica]

miniman said:

How much, roughly, could a cash investment of £250,000 return per month, and where would one put such a sum to achieve a good but low-risk return? Also, what would the tax implications be for a pensioner on that return? Thanks

buy a property and rent it out

[Scooby_snax]

From what I gather the A day changes are all proposals with ratification due at the end of October. Methinx that despite all the press speculation/advice the final offering will not be as good as people think.
(I hope not cos I hope to do some investments)

[Eric Mc]

If the investment is a normal bank or building society account, tax at 20& will be deducted by the bank or building society at source and net interest will be paid into the account. If the pensioner does not earn enough income from all sources to put them into the higher rate tax bracket, they will not be asked to pay any additional tax to the Inland Revenue.

If thy do earn enough to pay tax at 40% they will need to pay directly to the tax man the additional 20% tax due on the interest.

If their overall earnings for the year are so low that they are not liable to any tax, they can instruct the bank not to take any tax out of the interest. Once they earn enough to pay tax, they MUST notify the bank who will then start deducting tax on the interest.



>> Edited by Eric Mc on Monday 24th October 22:46

[miniman]

jessica said:

buy a property and rent it out

The cash would be raised by selling a property, in fact. Renting it, or any other £250k property, out won't raise the kind of money we need (£2k / month care home fees)

[rich1231]

miniman said:

How much, roughly, could a cash investment of £250,000 return per month, and where would one put such a sum to achieve a good but low-risk return? Also, what would the tax implications be for a pensioner on that return? Thanks

if you were interested in actually doing something with the cash.. Apart from the things already mentioned.. 250k could possibly get you a few franchises to run... the ROI would be fa better than just sticking it in the bank, excepting property well invested and a rising market for capital appreciation.

[Eric Mc]

However, overseas investments always carry the additional risk of coping with currency fluctuations.