Investment advice please

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Hi,

my husband and I have about 100K in savings (premium bonds and ISA) and a small pension each (£15k and £25k i think). We are both self employed, age 40. Own our home with a mortgage. 2 kids.

Do we have enough money to use a broker / manager to help us decide where to invest? Any recommendations?

if not, what is a nice safe place to get started? I find this all completely overwhelming and scary - I have googled for what feels like weeks but always end up with too much information and no decisions made.

Any guidance would be hugely appreciated

I would suggest you find an IFA (Independent Financial Advisor). They will consider your goals, future plans, approach to risk etc and advise accordingly. As far as I know, they operate in two different ways: either they’ll manage your investments for you, including a regular meeting, maybe once every year/couple of years to review what’s happening, which is obviously a more expensive option; or they’ll give you one-off advice for a fee. All of the factors I’ve listed above will make a huge difference to how you should be managing your money, but bear in mind that having reviews and letting someone else handle it all will cost you dearly.

As to how to find someone, that really needs to be based on a recommendation as there are so many unscrupulous people out there, even accredited and qualified ones.

Agree with previous poster, ask for local recommendations. There are big names like St James Place that have local advisers, but often have high fees.

I would say you need a rainy day fund set aside, this could be in as high paying an isa as you can get or a stocks and shares isa which are both tax free. Premium bonds don’t actually pay interest and even then, the small amount of interest might not to keep up with inflation.

Given your small pensions, I would be looking to top those up as a priority. You need time to let them grow so the earlier you start there the better.

Thank you both! We were very stupid about pensions (told inheritance would cover it, but parents have since relocated to UK so have no expectations in that department) and agree we need to focus on that. It’s just so hard to know what to do first. Keep £40k in an ISA and put the rest into our pensions?

recommendations for an IFA would be brill, prob the one off type. Also do you know what sort of fees we would be looking at?

Sorry I don’t have anyone I can recommend - I’m actually looking for a pension adviser myself now.

There is a limit to how much you can put into your pension yourself each year, it’s related to your earnings. On the plus side, putting a lump sum into your pension gets tax relief from the govt, but the downside is that you can’t access it for ages, in your case, you’re 15 years away from being able to take the 25% tax free lump sum and that could also be subject to change at some point in the future. If there’s any chance you might need the funds before you reach 55 or pension age, then you need to keep some of it back. If it’s in an ISA then it’s easily accessible if you needed it for a house move/home improvement/uni fees for example. But obviously then you don’t get the tax relief element.

An IFA is going to tell you to put money in your pensions or ISAs depending on whether you are able to tie the money up longer term. You can do all that without paying someone else to do it for you.

The financial flow chart acts as a to do list to work through.

If you want a detailed discussion of each step, the Meaningful Money podcast, which is basically an IFA telling people that 95% of the time they don't need an IFA, has a whole season discussing each step in detail.

(Mumsnet isn't letting me post links but you want the UK Personal Finance Financial Flow Chart and Meaningful Money podcast season 25)

Or you could pay thousands of pounds for the same advice.

This is brilliant thank you, am going to start here

I also had a rather detailed chat with Claude (AI) who (after looking at thr growth of our pension pots has suggested investing £60k into pensions, £15k each into an ISA (one cash one stocks) and keeping £10k into an instant access savings account

I’ll be interested to see if that tallies with other advice.

id love to be brave and invest in property or something but im a coward when it comes to money

Gaaah uni fees. Being self employed I’m hoping our kids can get get the maximum loans, if they go. Course we do have at least 6 years to save up / earn more as well. Also, we are Scottish so could move back there!

I was going to recommend the Meaningful Monet podcast too, run by an IFA. DH and I are probably similar to you in terms of assets and pension and my impression is that they usually work with people who have higher net worth. I’ve been investing some money in a stocks and shares ISA with Vanguard and building up cash fund of 8 months pay, aiming to build up to 1 year’s worth.

I think I’ve basically been following Claude’s advice!