What to do with £10k?

[whattodowiththiswindfall]

I’m shortly coming into a little windfall of £10k.

My mortgage is relatively small and manageable, and I don’t have any debt. I have about £20k in premium bonds, and don’t want to add to that.

I don’t want to spend this money and would like to “invest” it. I’m quite low risk, and would like to be able to access it if I need to.

Can anyone give me some advice on options please? Is this a laughably small amount of money to speak to an IFA about?

Thank you

Pension (gvt will top up) or ISA.

Invest in a low risk stocks and shares ISA. If you needed to you could access the money but ideally you would aim not to touch it for 5 years

S&S ISA. Look at Vanguard

How old are you OP? If nearing 55 putting it in a pension would be a good idea (because you can then draw it out after 55 with the benefit of the top up).

I would invest in index funds, it’s easy to do it via the Trading 212 app or similar apps.

Definitely don't need an IFA. The fees will outweigh any benefit and they'll only tell you to put it in a pension or ISA, likely in a global index tracker fund.

Which is best will depend on your age, because how long you want to lock it away for. Also your marginal tax rate now and what you expect this to be in retirement.

I assume your £20k PBs would serve as an emergency fund/money to replace car/roof etc should the need arise?

Main thing to be aware of when investing is that the value will go up and down but over time it should grow faster than cash based savings. You just need to be able to leave it alone and not be forced into withdrawing from it when the value has dropped because that's how you lose money.

Any investment in S&S isn't going to be 'low risk' unless it is in money market funds. An investment in a global index ETF is still going to be a 5/6 out of 7 on an investment risk scale.

Investing in a global ETF of course is less risky than say investing in a handful of individual shares, but its not right to call any S&S investments as low risk.

If you are happy buying individual stocks legal and general have a steady dividend of around 8% per annum. Share price is fairly stable. So £10000 would buy you around 3900 shares at the moment with an annual dividend of around 20pps. Stocks can go down as well as up so there is a risk. So dividend income
of £780 roughly per annum. Make sure it’s in a stocks and shares ISA.

With knowing your age, employment / tax payer status or what your goal is as a bare minimum no one really can give you meaningful advice.

I personally would max out this year’s ISA allowance. There is no point holding £20k in premium bonds unless you’ve used your ISA and personal allowance (unless you’re incredibly lucky of course).