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lump sum - what options

Stick it into Premium Bonds until you decide what to do.

Ask friends/family/colleagues for IFA recommendations and/or do some Googling. Get proper financial advice.

As has been said - debt reduction/pension are candidates.
 
Unless the lump sum had had some tax paid on it that could be reclaimed, I am unsure why anyone would put a lump sum in a pension.
Taking money out of a pension also costs once you remove more than 25%.
 
gavreid pfm Member
Don't blow it on a car. The biggest mistake of retirees.

Hmmm..? I just changed my old diesel Citroen for an ULEZ compliant Peugeot 107. Great ... Then I find that Khan is offering £2K to those who don't accept climate change or respect younger generations in a desperate attempt to buy votes. But I don't qualify because I have acted within what was the law before Labour tried to buy votes.
I know this isn't a political stream but over 5 years we have gone from 2 parties not fit to govern to 2 parties that are not fit to govern. Where is the 'Great' in Britain?
 
Don't put too much faith in an IFA, mine thought he could up the proportion of my fund subject to a Guaranteed Annuity Rate then put minimal effort into choosing a suitable investment vehicle.

Ended up doing more or less what i had planned but £7k lighter, unfortunately i was obliged to use him. I'll be self advised in future.
 
Vinny said:
Unless the lump sum had had some tax paid on it that could be recalimed, I am unsure why anyone would put a lump sum in a pension.
Taking money out of a pension also costs once you remove more than 25%.
Click to expand...

True, although anyone can put 3600 a year into a personal pension and receive tax relief, even if not working and have no income. You pay in 2880 and the govt top up to 3600. It’s free money (from that bottomless pit the govt have).
 
Big Tabs said:
Buy the max premium bonds. 50k

Most months you will win some money.
Click to expand...
An ISA will guarantee a better return. Premium Bonds are a lottery which might or might not give a return. I put some money in 3 years ago and, luckily, have had a 3.5% return - which an ISA or savings account will beat every time.
 
I went and got some financial advice from three separate advisors, and went with the option I felt most comfortable with.

Any advisor will say it’s all about how much risk you wish to take with your investment.
 
As some of the other members have suggested you should be looking at some form of tax wrapper whether that's an ISA or pension.

If you're in a position to do so you can open accounts for both you and a partner which will cover £40k. Put the other 10k in a savings account and transfer in next year.

Equities (shares) are normally higher return but higher risk. Government bonds are low risk but low return.

Personally I would look at low-cost index trackers in a Stocks and Shares ISA. Funds like Vanguard Lifestrategy allows you to mix equities and bonds in varying ratios. You are the best person to judge your appetite for risk.

Whatever you do check the fund fees carefully as these will eat into your returns. And don't invest in anything you don't understand.

This site is a good starting point if you want to do some reading (and I would suggest you do a lot of reading before committing to anything):
https://monevator.com/category/investing/passive-investing-investing/

Obviously pay down any debts you have first.
 
dweezil said:
Don't put too much faith in an IFA, mine thought he could up the proportion of my fund subject to a Guaranteed Annuity Rate then put minimal effort into choosing a suitable investment vehicle.

Ended up doing more or less what i had planned but £7k lighter, unfortunately i was obliged to use him. I'll be self advised in future.
Click to expand...

To balance this, our IFA has, over 10 years, very nearly doubled our money using low/medium risk investments. Unfortunately, he is also now retired….
 
Investment in a SIPP is worth looking at. If you are a 40% tax payer that £50K will be boosted to £83K or for a 20% tax payer to £65K. That free money. How long would it take in other safe investments to realise that immediate gain? Then the headache is where the investments in the SIPP go.

Money for nothing.

If you play with the maths and take 25% tax free and the rest at your nominal rate you'll still be quids in. However it is a long term investment and once the markets pick up stand to turn that £50K into a really good sum. I'm been retired 12 years and have just bought my wife a brand new hybrid car cash out of savings/investments gains.

Hargreaves Lansdown have a lot of useful documents you can read and for free and well worth a study.

DV
 
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