lump sum - what options

[Sean Regan]

A few questions.
Do you own your own house?
Have you got a mortgage, if so what interest rate are you paying?
If you have, it might be worth paying it off.
Have you any dependent relatives other than a wife for whom you have to provide?

What sort of pension have you got?
Will it provide a sufficient income for you when you retire?
(I'm retired and I spend a hell of a lot more than when I was working).
If you own your own house, you can consider equity release when you retire to supplement your pension.
This concept seems "foreign" to many, "when they die the kids get it all."
Invest some, spend some.

 

[Andrew C!]

It isn't a lot when you are thinking of paying for an IFA.

That's subjective, really. If it's what you have to invest, then it's what you have to invest.

In my circumstances, the cost of IFA of investing was made back in the 1st year, and then subsequent increases met my expectations. Sure, you can always make more money depending on what if and advice, but you do need to be comfortable with your decision.

But as others have said, each of our circumstances are somewhat unique, aren't they?

 

[Darth Vader]

That is assuming you are earning enough to put those sums in as you are limited to what you earn in a tax year

You are correct. However having no understanding of the OPs financial arrangements/requirements I was outlining the benefits of a SIPP in which to hold investments. The HL web site has a lot of helpful background information for the OP.

The last two years or so have been a challenge what with the unexpected covid pandemic and Russian aggression changing the World. I could argue that people are lucky if they have not made a paper loss. An advantage of a SIPP is that the owner chooses if/when and how much they take. I have made one dip in 12 years.......

DV

 

[Ponty]

You are correct. However having no understanding of the OPs financial arrangements/requirements I was outlining the benefits of a SIPP in which to hold investments. The HL web site has a lot of helpful background information for the OP.

The last two years or so have been a challenge what with the unexpected covid pandemic and Russian aggression changing the World. I could argue that people are lucky if they have not made a paper loss. An advantage of a SIPP is that the owner chooses if/when and how much they take. I have made one dip in 12 years.......

DV

Exactly right. Can be painful or euphoric if you look day to day. The other advantage of a SIPP is that once you are are 55 (soon to be 57), as long as you’ve only taken 25% tax free and not ‘drawn down’, you can carry on contributing and then withdraw 25% of said contribution. Particularly useful as the annual contribution allowance has recently increased from 40 to 60K. I.e. pay in 60K with full tax relief and take out 15K tax free. Maybe then stick that into an ISA for further long term tax relief, or just spend it, you’re still ahead (depending on your tax rate) versus paying tax on the 60. A no brainer if you can do it.

 

[Rana]

Hi Folks

I have a lump sum of above £50k to 'invest / save'. I am 59. I will be working part time. I am Healthy.

What should I do with it? - ideas please (not hi-fi / sports car / holiday related please!)

Thanks in advance

M

Depends on what £50k means to you and your risk appetite. If it was me (I have a very high risk appetite) I would utilise any available ISA shelters available within the family unit and spend it on HANetf ICAV Share Price (URNP) Sprott Uranium Miners UCITS ETF | URNP (hl.co.uk) until July 2024, and then transfer all initial capital and profits to FTSE Developed World ex-U.K. Equity Index Fund - Accumulation (vanguardinvestor.co.uk) and take a 10% annual income (tax sheltered) from that.

 

[Ponty]

Depends on what £50k means to you and your risk appetite. If it was me (I have a very high risk appetite) I would utilise any available ISA shelters available within the family unit and spend it on HANetf ICAV Share Price (URNP) Sprott Uranium Miners UCITS ETF | URNP (hl.co.uk) until July 2024, and then transfer all initial capital and profits to FTSE Developed World ex-U.K. Equity Index Fund - Accumulation (vanguardinvestor.co.uk) and take a 10% annual income (tax sheltered) from that.

What’s the significance of July 2024 in your view?

 

[Rana]

What’s the significance of July 2024 in your view?

Should be into the multi year sector bull run, but will be good to take profits early enough such that there will be more than enough buyers wishing to take positions. There were two initial attempts to take off recently, scuppered by general bearish market view with funds flowing into holding positions. But the sector fundamentals (supply, demand etc) are close to reaching breaking point.

 

[Cav]

Depends on what £50k means to you and your risk appetite. If it was me (I have a very high risk appetite) I would utilise any available ISA shelters available within the family unit and spend it on HANetf ICAV Share Price (URNP) Sprott Uranium Miners UCITS ETF | URNP (hl.co.uk) until July 2024, and then transfer all initial capital and profits to FTSE Developed World ex-U.K. Equity Index Fund - Accumulation (vanguardinvestor.co.uk) and take a 10% annual income (tax sheltered) from that.

You have investments in these products?

 

[Davenice]

My take on this is to pay off expensive debts, if any and treat yourself a little.

I was in a similar situation about 5 years ago. About 100K lump sum in my case. Didnt want to put in the markets as I already had good exposure. Had a couple of mortgages, but interest rates were low so no hurry to repay.

I initially put it in premium bonds (across 2 accounts). I then decided to take a year off work. Once interest rates started to rise post covid, I paid off a BTL tracker mortgage which went from 3% to 8% in just over a year! Also, I am sure there were a couple of hifi purchases along the way.

 

[Ponty]

Should be into the multi year sector bull run, but will be good to take profits early enough such that there will be more than enough buyers wishing to take positions. There were two initial attempts to take off recently, scuppered by general bearish market view with funds flowing into holding positions. But the sector fundamentals (supply, demand etc) are close to reaching breaking point.

Interesting, thanks. That’s a very small cap ETF? Tempted to have a dip, for diversification if nothing else. At the other end of the spectrum, LGEN looking well priced for long term income after recent falls.

 

[Rana]

You have investments in these products?

Yes for the Vanguard fund in which I invest for my wife's and son's SIPPs. The ETF came into being in the UK after I had taken several individual positions in the uranium industry, and the only existing competitor had too high fees for my liking.

 

[Rana]

Interesting, thanks. That’s a very small cap ETF? Tempted to have a dip, for diversification if nothing else. At the other end of the spectrum, LGEN looking well priced for long term income after recent falls.

Only for who have a high risk appetite as the short term gains and losses can sometimes be dizzying, but overall the macroeconomic setup is compelling, in my opinion.