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What to do with 25% tax free lump sum?

royeee
royeee Posts: 126 Forumite
in Over 50s MoneySaving
Those who opt to take 25% tax free lump sum instead of full pension, what do with it - spend, spend, spend or save, save, save or bit of both and in what way? Just trying to get my head into it and think through. :)

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Comments

  • jennifernil
    jennifernil Posts: 5,839 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    We have spent some of ours on a new car and work on the house, the rest is stashed in the best paying accounts we can find, in my name at present as I am not a taxpayer.
  • tanith
    tanith Posts: 8,091 Forumite
    Part of the Furniture Combo Breaker
    Not a huge amount but I stuck mine in the best account for me and will use it to dip into for the odd holiday and unexpected expense, hopefully the interest accrued will allow this without actually diminishing the capital... fingers crossed I don't get too many unexpected expenses :rotfl: seems to be working out so far though....
    #6 of the SKI-ers Club :j

    "All that is necessary for evil to triumph is for good men to do nothing" Edmund Burke
  • royeee
    royeee Posts: 126 Forumite
    Ok the consensus so far is generally to put into savings account with the ability to dip in whenever whilst getting good interest (tax or non-tax). What kind of savings account would that be?
  • missile
    missile Posts: 11,886 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    May I suggest you read Martin's guide to saving and/or savings & investment forum
    "A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
    Ride hard or stay home :iloveyou:
  • royeee
    royeee Posts: 126 Forumite
    missile, I know about guides within but I'm interested in opinions and experiences which can be valuable. Such guides can be treated as guidances but not gospel.
  • missile
    missile Posts: 11,886 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Without giving details of your circumstances, i.e. non tax / tax or higher tax and how much you want to save and for how long any opinion could be inappropriate. I would suggest you might get a better response on the apprpriate forum, where there are several threads discussing where best to save / invest for a wide variety of situations.
    "A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
    Ride hard or stay home :iloveyou:
  • jennifernil
    jennifernil Posts: 5,839 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    First we fill up our ISAs, then we have a largish amount in a Halifax 6 month fixed rate account at present, the rest is in Icesave, apart from a few thousand I keep in a Bank of Scotlant Instant Access Savings Account, so we can easily transfer to our joint Halifax High Interest Current Account. I also have a Halifax Monthly saver paying 7%, and another Regular Saver.
  • jennifernil
    jennifernil Posts: 5,839 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    It is difficult to know where is best to stash the cash! We could probably do better by investing in shares, but our future plans are not settled (we would like to find land to build a bungalow) , and we have a student daughter to support/consider, so we prefer the flexibility of cash in the bank at present.

    We have only been retired since August so are still feeling our way. Our income has not yet settled down as regards tax, so budgeting is still difficult.
  • roy62
    roy62 Posts: 327 Forumite
    Stick it under the bed and plead poverty.
  • shykins
    shykins Posts: 2,768 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    depends on how much it is i guess

    we took hubbys and bought a studio flat (mortgage free) and earn £450 a month from it.. luckily we have very reliable tenants who want to stay another year but its the best easiest income we have

    HTH
    When you know better you do better
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