Your problem then is inflation risk. Expected inflation is (theoretically) built into the gilt yield, unexpected inflation is not.Caveat that I don’t know if this is a good idea—would love others’ thoughts—but a gilt ladder would be good here?
Split the £2m into 20, and build a UK gilt ladder (iWeb might be the cheapest place), gilts that mature each year over these next 20 years. If you can find low coupon gilts at a discount, you can park the money safely, and minimise tax. You don’t pay CGT on gilts, so you’d just be liable for the (small) income from the coupon payments.
On maturity each year, take that cash and throw it into your ISA and SIPP and try to maximise your contributions.
Personally I’d suggest accumulating OEICs within a tax wrapper, and put anything remaining in a distributing OEIC in a general investment account.
For that sort of portfolio, Index Linked Gilts are a better bet, at least at the 10+ year maturities.
However you are also not maintaining a constant asset allocation. Moving from safe fixed income to (presumably) risky equities over time. With equities, it's time in the market that usually counts. Enough time to ride out the inevitable bear markets.
I would suggest, rather, setting a target asset allocation and then selling taxable investments to put into tax protected, as and when that is necessary.
Also tax allowances change over time, so in 20 years time it might not be possible to put money into ISAs etc.
Statistics: Posted by Valuethinker — Mon Mar 04, 2024 3:57 am — Replies 14 — Views 722