Managing Your Finances

You have a lump sum to invest - what should you do with it?

Investment advice is regulated by the Financial Services Authority and these regulations are statutory.
The investment market is extremely large and covers many types of investments for example Stocks
and Shares, corporate bonds, government stocks (known as gilts), warrants, annuities, credit unions,
savings accounts to name a few. It can be very confusing.

It is important that any investment chosen are right for you and that the correct advice is taken. Different specialists deal in different investment packages. For example a stock broker will deal with stocks and shares and an insurance company will cover policies. A financial adviser will cover Fund Managers and
savings accounts as well as bonds and other products but care should be taken to ensure that any advice sought is done through an independent financial adviser. This is someone who can look at the whole market and is not tied to a particular company thereby limiting the advice he or she can give you.

Before investing with any company you should satisfy yourself that the package offered suits your purpose, and be aware of the risks that are involved. If you are looking for a steady and safe income then it may be foolish to invest in a high risk portfolio.

You need to release come capital to top up your accounts

Some companies provide equity release schemes or lifetime mortgages. This is where you take out a mortgage with such a company placing your home as security. No monthly repayments are made during your lifetime and the mortgage together with the accumulated interest is repaid on your death.

If you are considering this type of scheme it is important that you discuss it with your family. As a general rule the value of the outstanding loan is doubled over a ten year period. Of course it is hoped that the value of your home will increase but you should be alive to the inheritance expectations of your family.

An alternative scheme that a small number of companies offer is the purchase of the freehold interest in your home whereby you receive a lump sum and a lease for life. There will be no value to your leasehold interest and on your death the house belongs to the company. Again, before embarking on this type of scheme you should discuss it fully with your family.

Information contained in our leaflet “Older Client Issues - frequently asked questions may be of interest to you.

For further information and assistance in making contact with an independent financial advisor please contact one of our specialist Private Client lawyers.

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