About to become a first time investor but should I stick with a cash ISA, because of US/Israel/Iran situation

[adviceatthislatestage]

Hi all, I am 59 and last year attended a pre retirement workshop (I’m in local government)

Plan is to retire at 63/64. Can’t get my works pension till I’m 67, so I’ll have to make my savings work for a few years.

It’s not much but I have £80k in a cash isa.

Following the workshop, I’ve had a couple of meetings with an investments company called MyWealth to discuss increasing my £80k into an amount that will cover me for the years before my pension kicks in.

I’m risk averse but still their advice was to transfer the whole lot, invest with their company and leave it for 5 years. Cue lots of graphs showing how much I’d make in ISA interest over 5 years as opposed to the fabulous money I’d make with them. Said because my investing was via an isa transfer any future profits made would be tax free.

I was initially ok with this, and they now sent me paperwork to sign. However given the current situation in the Middle East, am now worried that the timing is all wrong and I should just leave in a cash isa for another year.

Or is now actually a good time to invest and (hopefully) by the time I need the money the world will have been back on an even keel.

I’m one of these people who have never had money so £80k is a lot for me. If I was to end up with less at the end of five years, it would be quite disheartening to say the least, as likely to mean having to work till the bitter end (67) after all.

Fully aware no one on an internet forum can tell me what to do, but would be interested in all opinions. Many thanks

It's not terrible advice. As a general rule the stock market performs better than interest rates. However, it is more volatile - i.e. there are times when things will plummet. The key with investing is you have to stay focussed on long term outcomes because despite the dips, the pattern is generally upwards. Even within investment there are lower and higher risk options. Buying individual company shares is where you can potentially make/lose big bucks, but the funds that hold multiple shares on your behalf will usually be more steady and less spectacular.

There was a recent article in the Times, which I can't link to because it's behind a paywall, but it did an analysis and the headline was "Unluckiest investor in past 30 years would still have beaten cash
If you bought stocks right before the dotcom bubble, 2008 crash, pandemic and other shocks, you would have turned £45,000 into nearly £200,000", which really illustrates the long-term benefits of investment over cash.

It's worth noting that all pension schemes invest your money and unless you have defined benefit, what you get out at the end will depend on the performance of those investments, so its not doing something unusual and risky to invest pension savings. Currently 5% is considered a "conservative" growth rate to use for pension planning on investments - which includes adjustments for inflation, so that's considerably better than bank interest rates, where you might find that inflation can wipe out any real growth, or even reduce the value of your money, so there is an argument that plain savings are not a totally "safe option".
Your timescales are not hugely long-term and if you are naturally risk adverse it's definitely scary, but there are plenty of funds available that aim to track the overall market in various ways. If you had a tracker fund linked to the FTSE 100, you would have seen a drop because of the war - but if you google FTSE 100 performance, you can see on a chart that it only dropped back to roughly where it was at the start of January, it hasn't plummeted in a way that would wipe out your savings.

As others have said, a SIPP is a very good choice because of the tax benefits, low fees etc. You definitely don't need anyone else to "manage" your 80k. Most SIPPs will give you access to a huge number of stocks and funds to invest in, and you can change your choices at any time (bearing in mind there will be fees to do so). Definitely do some reading around to get understanding around the difference between managed and passive funds (passive generally cheaper and perform as well). But it really is something you can do yourself.

I would strongly recommend looking at the Rebel Finance School website, there is loads of info but also do their online course in June. It’s all completely free and will teach you how to invest for retirement and how to manage your money while you are waiting for your db pension to kick in. I’ve done it and found it so useful, I was like you, fairly financially savvy on a day to day basis but no idea about investing or pensions, im going to do the course again in June then completely restructure my savings into investments.

Does the 80k include a few months back up expenses fund, or do you have that separately?