Best short term (5 years) investment for a lump sum?

Best short term (5 years) investment for a lump sum of £20k?

Hi Chris,

A lump sum of £20k is a perfect amount to use up your annual ISA allowance if you've not already done so, if you have, we're not too far away from the new Tax Year and the new allowances of 22/23. The ISA benefits of tax free growth make this a great home especially if you're looking to invest and hopefully achieve some positive returns.

As I'm sure you're aware you can get Cash ISA's where you lock the money away for a set period in return for a higher interest rate, however 5 years is a long enough to consider your investment options. I'd really need to know more about you and your circumstances before recommending particular investments but there is a fantastic range of risk rated solutions that offer the opportunity for growth whilst remaining accessible if required.

You need to consider how much risk you are comfortable taking with the funds, this will help in choosing the most appropriate investment route. As part of this thinking process you need to consider amongst other things:
- How you feel about losing any of the balance even in the short term?
- If you did lose some of this money would it impact your standard of living? This is what we call your capacity for loss.
- What your expectations of return are?

Next, you can consider if you require any support in making your investment choices, there are some great websites/apps that will guide you through the investment choice and give you access to valuations and details on fund performance etc. for a small fee. Or you might feel more comfortable having the support of a Financial Planner who you can work with and they will be there to answer all of your questions and give you regular valuation updates and most importantly monitor your investments and talk through any investment changes as and when appropriate.

I hope this has been helpful.