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Our bank (Lloyds) wants us to put £100000 into a balanced portfolio. This is most of our savings. Is it a good idea?

by octavia 25 November 2009 |

8 comments | Love

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Portfolio would be 40% equities, some property, some gilts and rest - not sure!

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153

JoeEasedale posted
The stock market looks very overvalued to me.
Property is predicted by some to fall another 40%,
and the government issuing the guilts is virtually bankrupt.
Expect its a great deal for Lloyds
Posted on 25 November 2009 | Love 1 love Report
83

SmudgeButt posted
I assume you asked for advice?
I would agree that £100k is a big amount to be sitting somewhere getting you almost nothing in the way of interest. But what you should do with it depends on a lot of things - your age(s), financial position, mortgage, salary and/or pension pot.
Certainly there are some ways to maximise your return but I suggest you need to get some untied advice. (and not just from all us lovely people here.)
Posted on 25 November 2009 | Love 1 love Report
272

Swarbs posted
Two things to consider:
What are the charges on this portfolio? Chances are they will be a lot higher than you would pay for making the investments yourself. If a bank offers you something always be wary of it!
What is the exact composition of the portfolio, and what are the risks to it? JoeEasedale may be being a bit overdramatic, but there are a lot of risky investments out there at the moment, and Lloyds won't do your due diligence for you. Best bet is to get an IFA, who is not affiliated to Lloyds or trying to sell you anything else, to look over it and go through it with you. They'll probably charge a couple of hundred quid, but that's a lot better than watching the value of your savings drop by several grand because one of the investments in the portfolio was a dud.
Posted on 25 November 2009 | Love 1 love Report
7

octavia posted
Thanks for the advice. Charges are 2 1/2 % set up charge and then a minimum of £1000 pa or !% of the fund's worth- whichever is the higher. So for our first year it would be £3500 in charges. We have taken early retirement and are living off our savings at present until my husband's pension kicks in next March. Gut feeling is to go for cautious investements. Don't trust banks at present but worried that our savings' valu will drop to fast if just in ISAs etc.
Posted on 25 November 2009 | Love 0 loves Report
410

manzanilla posted
£3500 in charges in the first year! No wonder they are keen!
When your husband's pension kicks in, how well off will you be? Have you done a basic budgetting exercise to see if it will be sufficient for your needs?
I assume with that much cash lying around that you don't have any debts including a mortgage.
Your husband's pension - will it be adjusted for inflation each year? Is this increase capped? will you get a pension from it when he dies?
what are your own pension arrangement like?
how far off are you both from state pension age? You may need to use some of this lump sum to see you through to when the state pension kicks in - if so, theis money should not be invested in risky assets.
But if you will have enough to live on from his pension, then I think you probably should be putting quite a chunk into equities, as better protection against inflation than cash savings. If you could say aprox what your husbands annual pension will be, then we'll have a look.
manzanilla
Posted on 26 November 2009 | Love 1 love Report
7

octavia posted
I did think the charges seemed very high! My husband's pension will only be £11500 in March, supplemented by my part time work from home of about £7000. 3 years on I will get a pension of £5000 and then 2 years later my husband picks up the state pension and I pick up mine 3 years after that! Drip feed. Both the non state pensions are inflation linked. We paid off our mortgage 18 years ago. We think we can scrape by on £12000 covereing allbasic costs as prices are at the moment but are worried about later on and obviously don't want to just scrape by if poss!
Should we invest into a portfolio of equities and get an IFA to advise?
Posted on 26 November 2009 | Love 0 loves Report
212

SoftwareBear posted
shouldn't you be looking at something fairly cautious at this point ... Lloyds are also sacking people hand over fist currently ... probably looking for redundancy money to hand out ...
You're already loosing 3.5% just by handing over the cash ... how much are you expecting to make this year ?
Posted on 26 November 2009 | Love 1 love Report
49

peepobaby posted
Good lord! Spend about £7.5k a year to boost your lifestyle when retired and have the rest in cash savings. When you run out of money, the taxpayer can take care of you. If you don't run out of money, you'll be happy or dead.
As a general rule, never trust anyone when it comes to money and never invest in something you dont understand completely.
Posted on 07 December 2009 | Love 1 love Report

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