In reply to JJL:
10% is relatively easy over the long term if you take into account capital gains as well as yield. lots of FTSE 100 and 250 companies with dividend yields over 5%, so just need to incorporate general rise in stock prices over the longer time to get your 10% plus. just need to keep on top of your portfolio, spread your investments and accept your losses when they occur.
for something less risky, Marlborough High Yield bond has a yield of over 9% at the minute.
http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-re...
the value of your investments may go down as well as up, but wtf, it will still pay 9% of your original capital, and if you keep it "ad infinitum, its only your kids that are worried about the capital
Should also look into PIBS/preference shares. Co-Op retail bondholders were looking a bit shaky earlier this year but they have come out of it OK. lots of these paying over 7% with a couple of LLoyds ECN paying 10%. Again, spread your investments so if one does go tits up, you're no going to loose the lot
http://www.fixedincomeinvestments.org.uk/home/fixed-income-prices-and-yield...
on a general note
- Do Not buy an annuity - crap returns, and they keep you're money
- Max your ISA allowance (currently around 11.5k per annum) all your income will be tax free
- do not worry about eroding your capital. waste of time keeling over with 300k in bank
- you will not need as much when your 85 as when you're 65. enjoy the Caribbean Cruise while you still can
- if you are investing in "buy to let" returns are better on smaller or low cost properties, but does your mum really want the hassle of being a landlord? current yields are around 7%, so if your not interested in capital gains, there are a lot easier ways of getting your monthly income (see above)
and the reason why IFA's are still working is that you need 3 to 500K to make a comfortable living from your investments in the first place. Assume most of them don't have this otherwise they wouldn't be indulging in the rat race