Ideas for investment etc.

[Thebookswereherfriends]

What would you do with £100,000?

You have no debt and own your home outright. How would you invest the money?
I'm going to be coming into some money and will be getting professional advice when the time comes, but I'm interested in what others would do.
A large chunk will go into a pension, and there is a potential for some home improvement using maybe £15000.

I guess it depends on your age / stage of life, and what you are saving it for

If you have dc you want it to pass to, or if you want to "live life to the full" now - treating yourself to fab holidays or that particular car you've hankered after.

If your job is secure, and if you can still see yourself doing it when you are 67, 68, 69, or if you might want to use some of the money to finish work early or to move to part time.

A very interesting question, and one I'd like to know the answer to.

Right now, I'd probably put it in the bank, making sure I didn't have over £75,000 in any one bank so I'd be covered by FSCS rules.

If I felt I had a good pension already covered, and therefore was willing to take some risk, I might look at peer-to-peer lending. I'd avoid regular investments in shares at this point in time, but would be on the look out for any interesting opportunities for example in community owned wind power.

Not an option for you I imagine looking at the amount, but there's a very good reason so many people invest in buy-to-let despite the ethical dubiousness of it - it's pretty secure as investments go, and looks to remain so for the medium term future at least.

Ironically, one of my better paying investments in the last few years has been the smallish amount that I put into the Rootstock social investment society, which lends money to co-ops. As no deposit insurance I wouldn't put anything I couldn't afford to lose into something like that - but equally, given the level of personal knowledge involved in their loans, it's probably as safe as anything . . .

Thanks for the responses. I think that I would like to make a portion secure for my child, but perhaps not be available until they were in their twenties, so if they needed to pay off university debt they could or wanted to put it towards a deposit on a house.
I'm currently a sahm, but looking to get a job in the next couple of years. Maybe using some of the money to fund a degree for myself as I don't have one and am only qualified for a fairly low paid job sector.

For me - I'd buy land ( I'm a farmer).

For you - increase your earning potential by further training would be a priority for me

As you're not working, I'd rethink the pension idea. I would certainly save a large amount for 'retirement' but not in a pension wrapper.

The benefit of a pension is that it is very tax efficient - you get tax relief on earned income. It sounds like you're not paying tax, so you'd get no tax relief. And then it's locked away until you're 55, probably increasing to state pension age less 10 years, by the time you get there.

Pensions have tax relief on the way in, but are taxed as income on the way out. So you don't gain tax relief putting it in (actually, there is an allowance - if you pay zero tax currently, you can get relief up to £3600 gross - so you put in £2880 and it is grossed up to £3600 for you). But on the way out, if you earn over £11K it'll be taxed! (after the 25% tax free lump sum you can take)

So on the pensions idea, I'd drop feed £2880 per year into a pension - but use other investment wrappers for the bulk. e.g. a stocks and shares ISA where you can earn interest tax free.

I would put it in a broad global equities fund or ETF. I would deliberately find a fund and a broker with low fees as I don't want any investment to be diluted by fees. I hear recommendations for Vanguard funds. If you are more risk averse then I would do a mixed equities / bond fund.

I'm so lucky if I do have that much! Maybe, I'll distribute the half among my children and put at their savings account. For the remaining amount, I'll invest it in a small business like a convenience store that I know will profit. To do that, I'll ask a friend who is good in handling investment matters.