85k to invest for 20 years!

[Pleasethankyou]

Just that really.

its such a large sum, and unexpected! Normally I would be all over this but I can’t decide. MSE isn’t really helping!

I am a taxpayer, can’t put it in an ISA.

grateful for any suggestions where to start.

TIA

You could put 20k in an ISA initially?
While you decide how to invest, put the rest in a good instant access savings account so you're earning interest straight away.
I recently opened a Cahoot (Santander owned) savings account paying 4.55%

For 20 years I would consider an S&S ISA. How old are you? If 37 or more you could drip feed it into a SIPP and invest from there. You would then get 25% tax relief added provided you are working, might take a few years depending on your salary

Have you got all the previous steps on the financial flow chart covered ?
no debt
savings of three to six months expenses in a easy to access account
pension provision for you and DP
then things like mortgage pay off, savings for the kids future Uni, car, house deposit covered

the flow chart is really helpful

@Drew79 @Mumski45 I can’t do another ISA so those are out but thank you. I did find a good cahoot account but don’t want to switch my main bank account so need to read a bit more small print I think. I will look at SIPPs again

@redfishcat I’m not sure where this flow chart is, I think savings for pensions, kids, new house are kind of endless but the only one of those I would use this for would be my pension hence the 20 year time frame.

I was able to open a Cahoot saver online, without having to change any of my existing banking, no current account required.

Thanks I was looking at te 5% one I will keep looking

why can't you use a pension? even if you have used this years 20k allowance its only 9 months until you get a new allowance.

If it's for 20 years then a pension likely seems the best option as you will benefit from the tax relief. Even better if you are a higher rate tax payer. You can pay in your annual salary or £60k which ever is lower, but you can also go back up to three years and utilise any previous years allowance. The downside is obviously you wouldn't be able to access this money earlier if needed, so at the moment it is 57 but that could increase in the next 20 years.

If it was me and my situation I'd likely put maybe 50% into pension, 40% into ISA investments and then I'd spend 10% or so on living life now.

Hi I have maxed out all the ISAs/premium bonds etc. Mortgage in process of being paid off.
This money would be saved for my ‘pension’ hence the time frame but I need somewhere to put it on top of my ISAs/pensions etc. An extra place if that makes sense.

If you are comfortable with above average risk you could consider a VCT (Venture Capital Trust) which is indirectly investing in unlisted business and has tax advantages.

Stick it in some funds. Assuming you don’t need it desperately you can invest with some risk.

For example, I have some in a Hargreaves Landsdown Adventurously managed one that has made 10% this year, EQQQ also done well

I just opened a Cahoot savings account today as I've maxed out other places like you and I can't afford to risk losing money as it's for a house in 2 years. I'm happy with the interest rate and will just wait for HMRC to take any tax I owe next year

I am finding it hard to follow what you have already done. Have you put £20k into this years ISAs already? You suggest yes, but not clear. How much have you put in your pension the last three years and how much do you earn? Annual pensions allowance is £60k.

If these are genuinely maxed out this year then will you be maxing them out next year out of income? If yes then you may look at a general investment account and invest in shares / funds. As another suggested, a VCT may be appropriate but you will need professional advice if doing that. Is inheritance important to you? Do your children have ISAs and pensions?

Put it into a general investment account for now, then move it over into ISA each year to the max 20k limit.

With that time horizon I would stick it all in a global tracker ETF, such as VWRP. It will give you maximum diversification across global equities.

You can pay pension contributions up to £60k pa (if you earn more than that) or your annual salary if less. You can also carried forward unused tax allowances for the last 3 yrs so up to £180k or 3 x your annual salary. I would do this with your £85k!

bear in mind that if you put it in a high interest account you will have to pay the tax on the interest if it exceeds the tax free allowance (in the tax year it is paid)

if you put it into S&S you pay capital gains allowance in the gain when you sell the shares.

I currently have some of my savings in a fund and share account and sell enough to get a gain of 3000 (this is tax free as the first £3000 is free of cgt if you are not using your allowance for anything else) and put it into my ISA. it’s called bed and ISA and makes your gains go further. It does depend on your tax situation

If you are not maxing out your pension relief, and especially if you are a higher rate tax payer then consider a SIPP to get tax back and defer paying tax on gains.

You say you can't put it into an ISA but that's only for another 3 months then it's a new tax year so you can put it in then.
Put some in pension and invest the rest and drip feed ISA over the next 3-4 years.