How Harry from The Traitors should invest his cash prize of £95k


What would you be thinking the week after receiving a massive life-changing cash windfall? While some would be paralysed by shock, others may rush out to start spending it. The second season of the BBC’s smash hit reality show, The Traitors, drew to a close last Friday (26 January), with Harry, 22, walking away with the cash prize of £95,150.

It’s a tender age to receive such a vast sum of cash. And Harry has already reportedly blown £2,000 on a huge pub party for his family and friends. 

During the show, Harry seemed to have firm plans for the money, often mentioning the need to help out family members. I’m happy that he’s enjoying the money. But I also hope there are limits to this enjoyment, perhaps limiting his celebratory spend (and help for family) to between 10% and 15% of the money, leaving £80k to invest.

This is a once in a lifetime chance to put firm foundations down for his future. A sum of £80k could be invested over 30 years to provide for a secure retirement, leaving him free to enjoy everything that he earns in the interim. With investment returns of 6% per year over 40 years, Harry could see his £80k turn into a retirement fund of £876,596, according to the compound interest calculator at Nutmeg

Financial advice

Harry should be making careful plans to invest a large portion of the money. If he feels very unconfident about this, he could book a free first appointment with a financial adviser to help him start thinking about what the plan might look like. He can search for a financial adviser in his area using the website unbiased, and supplement this by looking at adviser reviews on vouchedfor.

But Harry seems like a clever chap. I think with a little research, he could work out a very good investment plan by himself, and save on the financial adviser fees.

Rainy day savings

The priority for any windfall, whether won on a game show or inherited from a distant departed aunt, is to deal with pressing issues such as paying off expensive credit card debts or loans. 

Next, you should build up an rainy day cash fund that could tide you over in the event of losing your job, having an accident or health issue that prevents you from working, or some other emergency. The fund should cover between three to six months of outgoings on basic spending – such as food and rent. If you have the means and want to feel more secure, the fund should amount to three to six months of your typical income.  

Hold this in an easily accessible savings account. You can check the best savings rates at independent website moneyfactscompare. Harry could get a healthy 5.10% interest on his cash held in easy access accounts with Close Brothers Savings and Leeds Building Society. 

Keep costs low

Once this is set up, Harry can start investing. If he is new to investing, he doesn’t need to make it complicated. But he should make sure that he invests the money tax-efficiently, using individual savings accounts (ISAs) and pensions. 

If he can’t decide between ISA and pension, he could fill his £20,000 ISA allowance for this tax year and put the rest in a pension where it is stashed away for the long term. Or drip feed the money in gradually. There will be another £20,000 ISA allowance to fill once the new tax year starts on 6 April. 

He will need to choose what funds to hold in the ISA and pension. And Harry also needs to choose a platform to invest the money. He can use Compare and Invest to do this and to keep his costs low. But the big platforms offer plenty of guidance to beginners so there’s lots of help at hand.

The golden rule of investing is to keep costs low. First, it’s the one thing you can really control (you can’t control stock market performance). Second, lowering costs helps boost investment performance, potentially adding thousands of pounds over decades though the power of compounding. 

Time in market (not timing the market)

And Harry at age 22 has time on his side. This means he can benefit from the power of compounding over many years. If he just wants to sit back and watch the money grow, then a passive fund could do the trick. Passive investing is designed to deliver the performance of a stock market index over time. The Vanguard LifeStrategy range of passive funds is a great place to start, being highly diversified and very low cost. Its popular with many DIY investors who choose their own funds on the big investment platforms. 

But I suspect once Harry starts researching investments, he may have some brilliant ideas of his own. You don’t get to win the most-watched TV show ever in Britain at 22 unless you’re wise beyond your years.

Photo by Proxima Studio on Canva