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Investments

Discuss investments with other users on our Investment forum. For more advice read our tips for saving for your child's future.

Original poster

How to invest a large sum

15 replies

Honeysuckleramptant · 02/08/2022 13:35

I need some advice please on how to invest about £200,000 short term, which will be used for a house purchase some time next year probably. Is there anything I can do with it which will accrue more than the 1 percent interest rate most accounts seem to be offering? I'm not very au fait with investments to be honest.

OP posts:
Mia85 · 02/08/2022 13:44

Do you mean invest (i.e. putting your money in an asset, such as shares, to get a return form growth/income) or do you mean a savings account (where you will get interest but no prospect of growth)?

The problem with investment is that they inevitably come with the risk that they will go down as well as up. For mainstream long term investments that's fine because the downturns are just bumps on a long road. But if you will need the money in a short time frame then there's a risk that you'll have to sell when the investment is worth less than you paid for it. For that reason the usual advice is not to invest money unless you can leave it for 5+ years.

If you are putting your money in savings do make sure that you are aware of the £85k protection limit.

Original poster
Honeysuckleramptant · 02/08/2022 13:51

Savings accounts I think. I had thought of putting a chunk in premium bonds .

OP posts:
BEAM123 · 02/08/2022 13:54

I think Premium Bonds have a very low pay out rate. As you need the money next year, you'd be better finding savings accounts with decent interest and splitting the money between them to £85k each

Wetcappuccino · 02/08/2022 14:20

Have a look on the Money Saving Expert website for the top savings rates available. Easy access maybe - if you don’t want to be tied in for a period of time.

Original poster
Honeysuckleramptant · 02/08/2022 15:03

I was just wondering if there are better options than savings accounts but maybe not.

OP posts:
Mia85 · 02/08/2022 15:09

The difficulty is that there are few other options if you do not want to risk your capital and there are very good reasons not to risk your capital in such a short period.

RockingMyFiftiesNot · 02/08/2022 15:13

I would engage an independent financial adviser. Appreciate they're not all fully independent and better if you go with someone people you know in RL recommend. You Will be charged a fee or they Will be paid commission on any investments you take out but should look at your overall financial position, long term and short term objectives and be able to advise accordingly.

nannynick · 02/08/2022 15:18

If it will be used within a couple of years you don't want to invest it. Use interest paying accounts if possible and have rest in something safe such as with NS&I.

WobblyLondoner · 03/08/2022 19:22

RockingMyFiftiesNot · 02/08/2022 15:13

I would engage an independent financial adviser. Appreciate they're not all fully independent and better if you go with someone people you know in RL recommend. You Will be charged a fee or they Will be paid commission on any investments you take out but should look at your overall financial position, long term and short term objectives and be able to advise accordingly.

I'm not convinced this is worthwhile given what you have said about how you will use the money and when.

I would split between a savings account (some suggestions st the end of the current premium bond thread elsewhere on this site - if you are willing to commit to a year then the rates are better) and premium bonds (max of £50k per adult).

WobblyLondoner · 03/08/2022 19:22

This one

PREMIUM BONDS http://www.mumsnet.com/Talk/legalmoneyy_matters/4542818-premium-bonds

Weirdlynormal · 09/08/2022 12:02

There is nothing to be done, just get it in 3 savings accounts. Even a structured product won’t help on that timescale

savvy7 · 11/08/2022 06:56

Poor advice to see a financial advisor! Just split it between saving accounts and/or Premium Bonds.

Weirdlynormal · 11/08/2022 21:57

savvy7 · 11/08/2022 06:56

Poor advice to see a financial advisor! Just split it between saving accounts and/or Premium Bonds.

Well if she phoned me, I’d give her that advice for free so not sure there would be anything but reassurance, as the OP would know she wasn’t missing anything! How is that a bad move?

RockingMyFiftiesNot · 12/08/2022 10:41

I mentioned an FA because the OP said the money 'will be used for a house purchase some time next year probably.'

So it's not a given that the money will be used next year at all. I just wondered if there was something tax efficient or with a better return that an FA would be able to advise on.

I'm sorry I gave poor advice OP, luckily there are plenty of experts on here to advise you better.! Good luck!

Medee · 11/09/2022 08:09

How much of that £200k do you think you could save up between now and the time you need it? Say you think you can save £20k, put £20k of the £200k in an investment (broad based index fund in an ISA or SIPP) then put the remaining £180k into savings accounts and premium bonds in line with the above advice. By the time you need it, you’ll have £200k again and your £20k invested can be left alone to grow over longer term. Of course, you might decide you’d rather have £220k for your house purchase, in which case just save it all!

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