Author Topic: No pension, holding c. 90% Cash (UK) - help?  (Read 2143 times)


  • 5 O'Clock Shadow
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No pension, holding c. 90% Cash (UK) - help?
« on: September 13, 2017, 12:56:16 AM »
Hi there,

Iím 28, single and with very little understanding of stock markets/investing. First time posting in this community.
Iím currently working in Sub-Saharan Africa, but am from the UK. I think I will be out here for at least another year but long term I plan to head back to the UK Ė in as far as one can plan these things.

I have 54k in savings. All figures GBP.
8k is in a cash ISA Ė instant access Ė earning 0.75%/year. 46k in my current account earning 0%.

Iíve found out that since I am abroad I canít invest any more into an ISA until I become a UK resident again.
Assuming my contract renews for another year (should know in a few weeks) Ė then I am sure I could lock 50k away without any need for it.

I donít currently invest into a pension and canít get one with work.

I was planning to use this money for a deposit on a flat in the UK Ė but having done some reading on here and elsewhere Ė it seems like housing isnít actually the wonderful investment I thought it was.

I donít have a set early retirement goal but I would like to put the money to work.

So what should I do?

One friend said that a private pension has tax advantages but presumably that has restrictions on when I can take the money out?
 How do people from the UK even buy into index funds?

Once Iíve invested and moved back to the UK, is it possible to put the money into an ISA wrapper without withdrawing it?

Someone told me I should try to buy multiple index funds to further diversify/reduce risk Ė does that seem sensible?

Very happy to provide more info if Iíve missed anything relevant!

Thanks for all your help,


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Re: No pension, holding c. 90% Cash (UK) - help?
« Reply #1 on: September 13, 2017, 02:32:30 AM »
The only advantage of the ISA or pension is the tax benefits. If you're not a UK taxpayer, then don't bother.

The question is then whether to keep that £50k as cash, or to invest it, and I think that depends on what's next for you. If it's money that you genuinely don't need to touch for years, then put it in a world index tracker (eg Vanguard's VWRL, or one of their life strategy products). You can deal directly with Vanguard, or go via an online share/funds company e.g. Halifax, Hargreaves Landsdown, Selftrade and many others. If you think there's a fair chance you may wish to access that money in the next 5 years, then I would keep it as cash - even though you are effectively losing it little by little because of inflation. For example, if you might want that money to buy a flat or house if/when you return to the UK (a house is first of all a place to live, not an investment.)


  • 5 O'Clock Shadow
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Re: No pension, holding c. 90% Cash (UK) - help?
« Reply #2 on: September 13, 2017, 08:46:14 AM »
Thanks for the response...

Yes I agree that a house is a place to live - I just meant I have been influenced by the information on here that renting is not actually throwing money away and can actually be a better choice - particularly in places like London.

I can't guarantee I wouldn't buy within 5 years... but perhaps it makes sense to invest at least some of the money?


  • 5 O'Clock Shadow
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Re: No pension, holding c. 90% Cash (UK) - help?
« Reply #3 on: September 14, 2017, 03:55:58 PM »
Even if you can't add new money to an isa right now you may be able to transfer the existing cash isa to a stocks and shares isa, within which you can buy index funds. This would give you a start investing in a tax efficient wrapper and leave your existing cash for the potential house purchase?

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Re: No pension, holding c. 90% Cash (UK) - help?
« Reply #4 on: October 15, 2017, 01:55:30 AM »
It sounds like you've got a few options and a large sliding scale between them; either leave in cash (and accept for the low risk that inflation will erode them), or invest in the market - a low cost index fund (and accept the higher risk and thus likely higher rewards).

You'll probably best placed somewhere between these two extremes - decide what you are happy investing now, make it happen then reevaluate in the future.

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Re: No pension, holding c. 90% Cash (UK) - help?
« Reply #5 on: October 15, 2017, 03:29:56 AM »
The money that is in a current account, is that in the UK or in a local account? Are you familiar with the rules for moving money out of the country and happy with them? Is your residence status locally such that you can invest in an account there?

Do have a UK current account? You can use some National Savings and Investment products if you are outside the UK, but it depends on where you are resident (eg premium bonds fall foul of some countries gaming/lottery regulations). That could allow you to get some growth (better than 0%), and give you a better chance of keeping up with inflation. You'll also be able to hold more GBP, which might help with the risk of earning or holding cash in a local currency (if you are).

Regarding multiple index funds: be careful how much of this person's financial advice you take. They are probably well meaning but have missed an important, but subtle, point. Investments would be poorly diversified if your index was made of 30 oil companies in the UK, but if it was a Global index fund it doesn't get much more diversified inside of equities. As Cerat0n1a says, either Vanguard's VWRL or one of their life strategy funds, is a decent option.


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