where to put the money

A question about : where to put the money

My hubby has worked hard all his life and so scared to lose the money, however we will have Ј170,000 this is from his voluntary redundancy he is retiring at the end of next month so the Ј70,000 we will need some of that to top up his annual pension pot and for hols and emergency and other.
What should we do with the Ј100,000 we are mortgage free and loan free . He spoke to a financial adviser for the free 1 hour slot and he was encouraging him to put in more(which we are not) his fees are Ј3000 for the first year and 1% yearly dont know what other costs there may be?
What do you think? Is it worth it, will we break even or gain more than on savings accounts and where can you put a large chunk of money with a reasonable interest rate? without risk. Seems you have to put bits all over the place, we have never had this lovely problem before so are not very money wise.............thankyou

Best answers:

• Savings accounts have a long history of losing out to inflation but will continuously increase in size if not in real value. For large amounts of money interest rates are currently less than 1%. Current accounts can offer higher interest rates but these are limited in the amount of money you can hold.
  Equity (shares) investments have a long history of much higher returns and in the long term these can be expected to usefully exceed inflation. The downside is that share prices can be very volatile in the short term and so investing is not recommended if your timescales are less than 5 years and ideally should be 10 years or more.
  To reduce risk you would need to invest in a wide range of investments, normally through funds which may hold hundreds of different shares or other assets thus avoiding significant losses if one company goes bust.
  You need to divide up your money based on when you will need access to it. Money needed in the short term should not be invested in shares but somewhere less volatile - cash savings accounts or even high interest current accounts would be fine. Money needed for the distant future may be best held in investments.
  If you work with an IFA, he/she should be able to help you set this up and recommend appropriate investments.
• I don't really like those IFA fees though - and to be honest most the advice they seem to have given people here seems like it could've just come out of any old asset allocation book (and they're still telling people put money in bonds, which many real investors would be concerned about at this particular time)
  There are about a dozen common ways of splitting money across investments that grow your wealth fairly consistently, and reduce your risk of any big or sudden losses ... These are often called things like "permanent portfolios" or "all weather portfolios" or "risk parity portfolios" ... The good news is, despite all the fiddling with figures, they all perform very similarly
  As said above, the biggest risk with cash is the near-guarantee that your money will fail to keep up with inflation ... I.e. at the moment (with global interest rates close to 0%) investors are forced to take on some risk just to maintain their capital
  Normally it would be very easy to recommend a way of splitting your money across a few investments, but the staple of IFAs and balanced portfolios (bonds) are looking unappealing at the moment (very expensive, with very poor returns) - many investors are avoiding them altogether because of potential future losses
  So whatever you do, if your main concern is keeping risk to a minimum, I'd probably be keeping at least half in cash for now ... In which case I'd immediately put Ј85k in the savings account with the best interest you can find
  - I'd put Ј10-15k in P2P lending - interest rates around 7% - I'd not stray from the big 3 platforms ... I think RateSetter will be the ideal, investing in 5 year income at around 6-6.5% ... P2P lending seems like the savings account/bonds of the future ... It's a little new ... If it had been around 10-20 years, I think we'd be putting half our portfolios in it ... You could also put some in FundingCircle for potentially higher returns (I use Autobid, no more than Ј20 lent to an individual company, and I use Advanced Settings on Autobid to uncheck riskier lending bands)
  - I'd open a stock's & shares ISA (my favourite platform is Hargreaves Lansdown - I certainly think you'll find it the least trouble) and perhaps set up a monthly investment from your bank account ... Drip-feeding money into a few high quality shares funds is the least risky way to invest in a relatively risky asset class
  If you were moving 30% of the money into stocks and shares, it would take about 2 years to do that using your ISA allowance up (a little less as this year's run out in April) ... But I'd aim to be drip-feeding in over 2-3 years
  For my money, if you want to set-and-forget, and let your money work for you, the two funds I'd pick are Woodford Equity Income, and Murray International (which is an investment trust - listed under stocks & shares) ... I'd completely ignore whether capital goes up or down; I'd choose the Income version (as opposed to accumulation) of Woodford, and set it up so it's paying the dividends into your bank ... It sounds complicated, it's quite easy - and there's very good customer service
  For me they're two of the most experienced, most cautious managers - one will keep you invested in the best UK businesses, and the other is mostly Asia and the developing world - and whatever happens to the markets (a big if right now) you'll be getting decent income from both
  You can also set RateSetter to pay income straight into your bank ... So between half your money invested, and half in the bank, you could probably draw about a 4.5% annual income, which in an age of 0% interest rates, would be rather quite reasonable - and with some prospects of capital growth too
• If he is getting 170K as a redundancy payment, only 30K is tax free. If 70K can go into pension, fine (but is over the annual limit so might have to be done either side of the tax year or by using past year allowances.
  So that means 70K of the 100 will be taxed. If you have a pension (or if you have an income and dont have a pension) opening one for you could get some of the tax paid back?
• Its not all redundancy most of it is taken as pension cash leaving enough in pension salary to get by on. After yesterday I was going toward IFA advice where before this I was ready to do it ourselves, whilst I was going this way hubby was going the other way to just do the accounts and a share isa. So confusing , reading these boards regularly should get us a little more financially aware.
• Hi I had the same issue recently. Mortgage / debt free with a decent-ish pension and a similar amount.
  In the first instance we updated our car, had a holiday, spent some on the house and paid for my son to do his masters degree - got those sort of things out of the way. Thanks to advice on here we put rest into these accounts whilst we contemplate what to do.
  Ј10K into 2 Club Lloyds accounts @ 4%
  Ј7.5K into 3 Nationwide direct accounts @5%
  Ј8K into 4 TSB classic plus accounts @5%
  Topped up my ISA to Ј21k @ 2.6% tax free
  Ј48K in 3 Santander 123 accounts @3 %
  Ј1k into premium bonds.
  The Nationwide offer will come to an end next summer, so that plus the Santander money will probably be invested....as and when. Until I decide what im doing its getting a decent bit of interest.
  Hopes this helps in the short term at least.
• TSB is now only 1 account per person so Ј4k between the two of you
  Also don't forget Tesco 3% on Ј3k so theres another Ј6k there.
• How old is your husband?
  How old are you?
  If you become eligible for your state pensions after 6 4 16 see
  https://www.gov.uk/new-state-pension/overview
  Is your husband going to draw his private pension?
  Do you have a private pension?
  Take full advantage of interest paying current accounts for money you wish to keep in cash.