How shall I invest £35k? Sorry if it sounds like I'm boasting, I'm not.

[BrassCandlestick]

Advice please.
I'm in my fifties and single, my kids are grown up. I rent a lovely HA property. I used to be a poor lone parent working every hour I could, and now I'm self employed with no private pension.

My industry gives me large variations in my income over the year, ranging from comfortable to slightly worrying, although it always seems to pick up and I'm quite inventive with ways to keep earning and keep my head above water.

I stand to inherit about £30k soon. With some savings I might be able to bump it up to £35k - £38k.

I want to invest it wisely and although I'd love to buy my own house, I know I won't be able to get a mortgage on a property anywhere near where I live (SW) because of my age. But there are other possibilities.

I've thought of using it to get an ISA, or a buy to let in a financially poorer area, or even buy a car parking space in a nearby city and rent it out to give me a trickle of income.

I've also considered buying a bit of woodland and just sitting in it. But I'd get cold eventually.
I just want to make sure this money helps me when I can't work any more, which might be sooner than 65, due to physical problems.

Your thoughts welcomed.

@BrassCandlestick there are a lot of different communities living on land. Look at 1000huts fir an example. There was a stunning hut for sale at £35k recently, although more of a lodge, I’ve been following the idea for a while but not yet child free.

"I am not disabled yet but I think I will be before retirement."

It is important for you to consider your future benefit entitlement. PIP is not means-tested so that won't be an issue, but it's not enough to live on. You will also need to claim Universal Credit for help with living costs and rent. If you have invested your money in a pension or in a property that you live in (shared ownership), it will be disregarded. But any other investment, including savings, stocks and shares ISA, buy to let property, etc will be counted.

Savings and other capital under £6k are disregarded completely. Anything between £6k and £16k will affect your entitlement. £16k or over and you won't be entitled to UC at all.

@MyDcAreMarvel

Do you have right to acquire?

Sadly not or that would be my first choice.

Following with interest. I have a similar amount of money and am on a low income as I work part time and am stuck where I am now till ds moves onto independence at which time I'll probably go work overseas for a while and get more money together.

Property where I am is crazy expensive and buy to let need you to own and live in your own property which I don't and some are even saying you need income of £100,000 annually regardless of how small a mortgage you want or how large a deposit you have

I have a pension at work (teacher) but it's tiny as I only started paying in less than three years ago and I'm very part time so I have recently started a separate pension like a sipp but I chose a risk level etc and they choose the funds rather than me but it does get topped up by government. It won't bring in a big pension but it is at least some way to make some money on your money when there are such shit interest rates and savings products around.

I've considered all sorts but it honestly feels like you are just stuck - not enough money to buy or do anything safe and constructive but too much money to be entitled to any help with your low income etc and enough that they'll penalise you for it when you retire or if you were to become ill/disabled and need to go on benefits.

So yes I appreciate the conundrum - maybe we should go halves on that pet burial ground?

[quote FAQs]@BrassCandlestick there are a lot of different communities living on land. Look at 1000huts fir an example. There was a stunning hut for sale at £35k recently, although more of a lodge, I’ve been following the idea for a while but not yet child free.[/quote]
@BrassCandlestick I know quite a bit about living on the land and the "Tiny House" lifestyle con that thrives through SM. I've had several friends try to get planning for temporary dwellings on their own land and the process can easily take ten years. You can NEVER get planning for a home in your own woodland. You can spent 9 months there per year if you are working the woods and you have to completely clear out for the other 3.

The tiny house thing makes me mad because it eschews an inspirational lifestyle under the guise of humility and minimalism. The truth is that living in a van is hard and can be dangerous, especially if you're a woman, and there are next to no decent places to stop apart from sanctioned campsites who charge a pretty penny.

These IG posts don't show you where you can empty your toilet, get mechanical repairs when it's your house that's broken down, or how to deal with racist villagers who object to you living in a moving home near theirs.

That said, I know how to live in a vehicle but I wouldn't choose to do it at this point.

@TheHoneyBadger I hear you!

it honestly feels like you are just stuck - not enough money to buy or do anything safe and constructive but too much money to be entitled to any help with your low income etc and enough that they'll penalise you for it when you retire or if you were to become ill/disabled and need to go on benefits

I was considering putting the money into one of my siblings' homes (or my mums) so it helped them and I could ask back for it later. But I've been warned off that as if their fortunes fail it could take me with them...

Yes I've looked at stuff with family but it effects their tax and other issues we discovered. There's no simple answers. I may bury it the woods somewhere.

Put it all in Ethereum (or low cost tracker funds)

@BrassCandlestick I bet! I wonder if it’ll change over time, I’ve got two friends who live on houseboats, although one of those does stay in their flat they Airbnb most of the year, when the weather gets really dicey for the boat.

Forgive my ignorance, I've never thought I had enough money to worry about seeing a financial advisor, but what amount of money would it be worth seeing one for? (If 35k is too low?) Do they take a % for advise?
Would they advise on all possibilities? i am due to inherit some money this year and thought about seeing an IFA but DH says they will just advise you on investments or shares that they themselves can make money on

The thing is there isn't really much available so what a financial advisor can tell you is pretty limited and nothing that you can't find out with a bit of research and using quality free websites that help people understand investments.

I think pre-internet and in times where lots of options and interest rates were available they were worthwhile (and I'd definitely get one if I won the lottery because god knows what you do with a vast sum of money - whole different ball game I'd imagine).

I got some free advice before setting up my pension where the guy told me nothing I didn't already know and then said for £500 he could set one up for me It absolutely did not require a third party to set it up just some googling and looking at which and moneysupermarket etc.

I agree with comments that hiring an advisor for that amount will probably not be cost effective, given how much they need to make per hour. You will get more cost effective results from doing your own reading and research, and asking people, as you are doing now. But you will need to take all free advice, including mine, with a grain of salt, and make your own judgement.

I can add several more specific thoughts:

1. it is important to distinguish between what you are investing in and tax status of your investment. You can put the money into a SIPP, or an ISA, or keep it in a taxable account, and then within any of the three tax situations, you could buy the same type of investment: you can keep it in cash, or buy low-return "safe" investments or higher return "risky" investments Tax wrapped accounts bring tax advantages but usually also higher fees, and sometimes limits on the investment options.

2. You can get diversification and preserve liquidity by investing into a pooled vehicle (such as a fund), whereas buying a single lumpy, illiquid asset would not allow that. In my opinion, based on the limited facts you have given us, the only lumpy , illiquid asset potentially worth buying would probably be a home for you to live in, and otherwise you should probably look to some sort of pooled vehicle. Woodlands or a parking space does not sound like a great idea unless you either have terrific local knowledge or get lucky.

3. You will find online self-managed investment platforms like Hargreaves Lansdowne and some cheaper alternatives, and you will also find high street banks or specialised investment firms that promise their "expertise". In my opinion, the people promising expertise for that size of an investment pot will probably not be worth the higher fees that they will charge. They may well even give advice that is self-interested and bad for you (many "advisors" are actually salespeople for financial products).

4. If you have any high interest rate debt (such as credit card debt), then paying that off first would probably be your best "investment" from a risk-return point of view, provided you have the discipline not to draw down the credit limit again with new spending.

5. Back to the tax wrappers: whether you should consider a SIPP or not depends to a significant extent on the level your taxable income. Basically you trade away flexibility of access to funds before a certain age, you usually pay higher fees, and gain some upfront tax savings, which are higher if you have a high income. You may figure this out from your own research, or if you have someone preparing your taxes, you may get good advice from a tax advisor as to whether a SIPP is a good idea for you. Regarding ISAs, as long as you can find one with low fees that allows you to invest in what you want to invest in, there is little downside to putting money into an ISA and there are potential advantages if the investment does well.

6. No matter what investment approach you choose, it is really important to understand the fee structure. An investment product that charges 1% of the capital can actually take more than 100% of your return, given how low the interest rates are right now, leaving you worse off than if you put the money in a current account! In my opinion again, it is only worth paying platform fees and fund fees if you choose higher risk/rewards assets such as stocks and shares. I agree with one of the PP who suggested low-cost trackers, provided you choose a sensible tracker on a sensible index. In my opinion again, perhaps not mainstream on this point, but I think the big UK indices like FTSE100 are not sensible for most investors, and a global index would be better. For low-risk fixed interest instruments such as gilts, the interest rates are so low that the fees will probably eat up most or all of the return.

7. The hardest bit is choosing which type of instrument to buy. You basically have 2 choices: a) own a "safe" investment such as NS&I or a savings account, and watch your money lose 2% or more of its value on average every year (or about -22% over 10 years due to compounding), or b) own "risky" investments such as stocks and shares where long-term history suggests you're much more likely to make money than to lose money, but there are no absolute certainties. You can also do a mix of both. And if you buy stocks and shares, with pooled vehicles, you can move money in gradually so that you won't put all of it in on the worst day.

I hope this helps a little?

I can’t advise where to invest it, but I would think carefully about buy to let, housing associations and council housing is becoming more and more sparse, tenancies and rules ever changing. If you own a home in some local authorities you are no longer able to rent from them.

Thanks @YankeeDad. Forgot to say, I have no debt at all. I'm in low tax bracket and have paid £2k - £3k p/a of late.

@cracracatlady Yes, I wouldn't buy a house and carry on living in HA accommodation, I mentioned upthread I would have to find an alternative.

As @TheHoneyBadger has opined, it's too much and not enough.

If you don’t need the money until retirement, put it into a pension and you’ll immediately get tax relief added.

@TheHoneyBadger is it you from the old old days of MN btw? Your name seems familiar.

Yeah I've been through a few name changes. Think I started out as SwallowedAFly then changed after attracting the attention of MRA's trying to doxx me and had my whole history deleted Not sure when I started with HoneyBadger - got to be a lot of years ago. Only really came back on MN when the whole covid thing came up. Think I was first here in about 2008?

If you have £30k I'd buy in Liverpool or Manchester and let it out via a letting agent for 10 yrs. £30k would buy you a 1 bed flat near Liverpool City centre near the hospital & 3 universities. I'd let to post doc student, hospital/University staff and leave it for 10 years to grow in value. I went to university in Liverpool so know the area well and it has massively changed since I was there. Big tourist magnet (pre pandemic) so lots of scope for air B&B short term holiday let options.
www.rightmove.co.uk/properties/90827782#/map

Wow just googled on Milkywaystars idea and you can buy decent student studios for 20K with a return of about two grand a year after service fees, management etc. That is an interesting proposition.

the example flat in Liverpool is for sale with a tenant in place. £30k with a gross income of £4,800. Sounds pretty good.

if so, why is the landlord selling up, we ask? As are many others in the area.

go lurk on landlordzone for a while...

True. It looks like a hell of a lot of student accommodation has been built - the ones I was looking at were private student halls. Studios with en suite and kitchenette and desk area but also communal lounges etc.

Costs listed out with a net yield shown.

Service and management charges are high and I'm guessing this is the initial investors/developers 'selling' but retaining large amounts of income. They're literally lock key investments for cash buyers only. I don't know what happens if eg. the management company went bankrupt or some other eventuality.

Sorry to hijack your thread, OP, but I've got a question that someone might be able to answer and might help you I'm clueless

Those saying the government will give you £20 for every £80 you put in a pension ... if OP were to put £30k into a pension, the govt wouldn't put in £7,500 would they?

No or if so I'm amazed. And you can only put in to a maximum of what you earn in a year across your pension pots.

correct - pension contributions are limited to earnings. If you aren't earning your maximum contribution is £2880, which the government will bump up to £3600.