Windfall

[ImLostAgain]

A chap in our circle has had a windfall of just over £100,000. Great news. He is obviously very happy about it but is also very uncertain as to how best to look after his money as he has never been well off and is getting lots of differing advice. Most of us have absolutely no idea which way to point him.
With the current financial crisis and maybe a new government on the way, is he best off putting it into a single bank account, and if so what sort. Maybe stocks and shares. He's even thinking (against everyone's advice) of keeping large sums of cash in different family members homes in case there is a financial crash. I think the trouble in Greece brought that idea on. That said I think he may have been joking about the last option.

[emeritus]

He shouldnt put it all in one Bank account as you are are only covered for up to £50000 compensation if the bank fails.

[sherminator]

As there are several banks owned by the gorvernment and they ahve already shown they wont let a bank fail it will be quite safe in a uk bank.

He neds to fill up his isa allowances first £10,200 of it as this will be tax free(except dividend payouts)
He then needs to decide how much and how long he wants to invest for and what his future goals are.

he really should see a Financial Advisor and NOT one in a bank!!!!

[Nosha123]

I would recommend some ISA investments (as they are tax free).. plus some Premium Bond investments if he is happy to take a chance and see if he wins something... (you cant lose money as the bonds you hold are always worth what you paid for them so it can be quite a fun way to invest money!)


The problem with savings accounts is - he'll get diddly squat interest in them!

He could leave some somewhere tied up so he cant get to it to spend it so easily....

Alternatively if he wants to lend some to me so I can finish our building work I would repay him kindly!!!

[sandyRoe]

I would put £5000 in premium bonds. While they don't pay interest they're a safe gamble and might hit the million jackpot.

[ImLostAgain]

Ok,thanks for your answers. He's thinking about spreading it about (sorry Nosha123 not that way) in ISA's with different banks/building societies. Premium bonds seem good to. I'll mention it to him.
Oh he was joking,he says, about stashing it. The financial advisor idea appeals to him also.
Thanks again.

[spudqueen]

The Post Office have a growth bond out at the moment with an interest rate of up to 4.1 per cent, which isn't bad. Your friend could invest some of the money in something like this, as I agree with previous posts that he should spread the money around in different banks.

[boxtops]

There was a thread on here about Premium Bonds a few days ago. They don't carry interest but apparently the chance of winning increases quite a bit if you have the maximum holding, and he can cash them in at any time if your chap needs the cash.

[ImLostAgain]

All good advice. Thank you everybody.

[flobadob]

Check out the Post Office for options or An Post the Irish version. Think you can invest even if you are from abroad and it's 100% guaranteed.

[ImLostAgain]

Excuse my stupidity here flobadob,but what options should he be checking out, remember I'm passing on this advice as and when.
Also *An Post the Irish version.*? Sounds good but what is it?

[flobadob]

Depends how long he wants to put it away. Savings Bonds or Savings Certs might suit as I think they are based on 1-5 years and I think you can cash in at any time and get the interest due. They are decent interest for no risk. If you've time you could check out the rest. http://www.anpost.ie/.../savings_invest.htm?P

[Panic Button]

I would pay the maximum I could into my pension.

[Whoever]

His solutions will depend on his age, his current financial situation, whether he has a mortgage or other debts, etc and a good pension scheme. . First advice would be to pay off any debts. Then, he should consider getting himself a good independent financial advisor (and be prepared to pay on a fee basis for the advice he is given - it will be worth it if he's not a financial expert). There will be no obligation for him to follow any advice he's given but it will help him understand all the options which can be tailored to his personal circumstances. . He should talk to a couple of them and see which one he feels most comfortable with as a good advisor will first want to understand his personal financial situation so that they can offer advice most suitable for his individual circumstances. He definitely SHOULD NOT go to a bank because they can only sell their own financial products, which will be limited in range and will almost certainly not be the most competitive deal available in the market.