Any tips for long term investment?

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The investment we are making for our granddaughter is much longer term than you are considering. We have set up a pension for her into which we can pay a maximum of £2880 pa. Our payments are treated as taxable income and £720 is paid to the fund by HMRC giving immediate growth of 25% for that year.

The pension will be accessible from age 55.

Out of interest, how does it work for inheritance tax purposes? Assume the 7 year window will be long gone before they get access. Is it based on the £2880 which is under the £3k threshold or the gross amount which is just over?
 

PaulSB

Legendary Member
Out of interest, how does it work for inheritance tax purposes? Assume the 7 year window will be long gone before they get access. Is it based on the £2880 which is under the £3k threshold or the gross amount which is just over?

That's an interesting question and I'll ask my FA as I don't know. I thought the £2880 was simply an HMRC rule for such pensions. It could be all the child is allowed to invest despite it being our money?

I'll let you know.
 

Gunk

Guru
Location
Oxford
Another suggestion of bonds. My son's grandparents did that with them both having a lump sum at 18.

We put a monthly sum away for each one, in this case £70 a month, which they both got at 18 to use for university / a car/house / round-the-world trip. It means we're not having to fund them at university.

We’ve done exactly the same, my daughter goes off to university next week with a reasonable lump sum to give her a decent start without having to worry about money. We’ve also made the same provision for my son.
 

midlife

Guru
We’ve done exactly the same, my daughter goes off to university next week with a reasonable lump sum to give her a decent start without having to worry about money. We’ve also made the same provision for my son.

Paying for kids at uni is an expensive exercise, about £600 a month for rent and maybe £300 for living expenses plus odds and sods plus sundries so about £1000 a month x 36 for a 3 year course so £36,000 pot needed (tuition fees covered by loan) and I've put 2 through so far. Only one to go lol.
 

SpokeyDokey

67, & my GP says I will officially be old at 70!
Moderator
Empirically property and shares outstrip savings. Invest into one of the Vanguard funds. Risk levels 3 to 7. Get one of the global funds wit rating 4 or5. Because it is child, its a long game and these funds are designed for long run.
Here is the link.

https://www.vanguardinvestor.co.uk/what-we-offer/all-products

Still putting money into Life Strategy 80 as its performance has dipped this year following its recovery post-Covid last year. Good time to invest.

Agree re property funds. Mrs SD's commercial property fund started in 2003 is around 7 times its original value and year on year to date is +14.3% which is amazing given the general state of the markets.
 

glasgowcyclist

Charming but somewhat feckless
Location
Scotland
Whisky.

https://www.bbc.co.uk/news/uk-england-somerset-54040307

A man whose father gave him 18-year-old whisky every year for his birthday is selling the collection to buy a house.
Matthew Robson, from Taunton, was born in 1992 and over the course of his life his father Pete has spent about £5,000 on 28 bottles of Macallan single malt.
The collection is now worth more than £40,000 and has been put up for sale.
 
OP
OP
ClichéGuevara

ClichéGuevara

Legendary Member
Whisky.

https://www.bbc.co.uk/news/uk-england-somerset-54040307

A man whose father gave him 18-year-old whisky every year for his birthday is selling the collection to buy a house.
Matthew Robson, from Taunton, was born in 1992 and over the course of his life his father Pete has spent about £5,000 on 28 bottles of Macallan single malt.
The collection is now worth more than £40,000 and has been put up for sale.

There'd be none left by the time he needed to sell it. :laugh:
 

presta

Guru
Average long term stock market investment returns are 7-10% pa
I think the distribution is more interesting than the mean.

Here's how the FTSE has performed since 1984.
If I'd invested in 1999 it would have taken about 15 years just to break even, and after 23 years I'd have made an average of about 0.4% a year.
Empirically property and shares outstrip savings.
My inheritance has been in banks/building societies for the last 34 years, it hasn't made a fortune, but I haven't lost it all either. The only shares I've ever owned are the ones I was 'given' when the Halifax converted, they were worth ~£11k in 2008, and £318 now.

Daniel Kahneman's work is worth a look too, he's a psychology professor who won a Nobel prize in economics for his work showing that people's economic decisions are not entirely rational. People place a higher value on a loss than they do on a gain, so for example, if you win £1,000,000 on the lottery then lose £300,000 in a scam, you will feel less happy than if you win £700,000 and lose nothing.
 
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wafter

I like steel bikes and I cannot lie..
Location
Oxford
Depends on how long is long... shortish probably the stock market, bit longer gold, bit longer still an off-grid bunker in wales filled with canned goods and firearms tbh!
 
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