Retirement Lump Sum Investment/Saving

BossTheSector

Hello all. I'm posting this on behalf of my Dad. He's is taking voluntary redundancy and therefore early retirement at the end of the month (Sept) and trying to figure out what to do with his money.

He'll get approximately £100k lump sum. He wants a regular monthly income to supplement his pension as well as putting money aside for a rainy day.

I've suggested a mix of government bonds, stocks & share ISA, Instant Savings and a longer term saving account but I'm by no means an expert in this area.

Can anyone offer any advice? All comments welcome!

jem16

See an IFA with that amount so that everything can be taken into account with your dad's circumstances.

If he's planning on taking an income from it, it's important that the capital is allowed to grow as well otherwise it will just erode through time.

BossTheSector

Thanks for the reply. I am aware of the requirement to 'beat' inflation but my Dad isn't keen on risk to investment. He will see an IFA but it would be good to have an idea of what they will suggest so that he can be pre-armed with the information and doesn't get swamped.

Any further input would be much appreciated.

EdInvestor

It can sometimes be helpful to allocate a minority of the money for investment purposes, starting off with the 10k stock and shares ISA annual allowance, and adding another 10k per year until you get to say 30k.(This year he could get 20k in over 6 months)

That would still mean that 70k , 70% of his total cash, would be quite safe.

Keeping a maximum amount of money in mind to be exposed to risk can help guard against the 'baffle factor' which often arises when advisors get involved.

There is no need to put more than a minority of the money at risk to obtain adequate growth.

BossTheSector

The 'Baffle Factor' - made my laugh! Thanks for your input Ed. The old man has always been very cautious with money so it'll be a difficult job to convince him to risk anything! I wish I could spend a bit more time helping him with this (he's hopeless with computers/internet) but I've got a lot going on at the moment.

I'm now thinking along the lines of a guaranteed equity bond for a portion of his cash under an ISA umbrella and use this to beat inflation. The rest can go in a combination of fixed rate and instant access savings accounts.

jem16

BossTheSector wrote: »

I'm now thinking along the lines of a guaranteed equity bond for a portion of his cash under an ISA umbrella and use this to beat inflation.

Most GEBs are rubbsih and something you should steer well clear of, especially if from a bank. Most have ended with no growth whatsoever after 5 years.

There are one or two structured products around - do a search on here for that.