What to do with lump sum?

bigfreddiel

What should I do with my lump sum - approx £25k?

Basically I'm looking for income.

My age: 60
Pension: £11k p/a
S&I: £300k approx - average 4-6% tax free
ILSC, S&S & Cash ISAs, PBs, Savings acct
No mortgage
Married
Partners Pension £9k

UK resident
Standard tax payer

So I'm looking for ideas on my question above.

cheers

fj

atush

will depend on what savings you have (300K????) and how they are invested and what they produce in income. your tax and residency status.

3% easy access would get you only an ectra 750/yr. But equities could be better but we dont know the overall spread of your investments so cannot say really.

Linton

Perhaps a High Yield Portfolio - high dividend paying shares in 15 or or so large company shares. Companies like Shell, Glaxo, AstraZeneca, the electricity and water utilities.

You should be able to get a return of 5-6% with no tax due. Rather more risk than a savings account but much better returns. A HYP also has the advantage of matching inflation over the long term.

Fabius

bigfreddiel wrote: »

So I'm looking for ideas on my question above.

It would be impossible and irresponsible to even start making suggestions based on the information contained in your post.

However, there is enough there for me to say you should find an independent financial adviser to look at your situation in full.

bigfreddiel

atush wrote: »

will depend on what savings you have (300K????) and how they are invested and what they produce in income. your tax and residency status.

3% easy access would get you only an ectra 750/yr. But equities could be better but we dont know the overall spread of your investments so cannot say really.

just edited original post with above info

fj

bigfreddiel

Fabius wrote: »

It would be impossible and irresponsible to even start making suggestions based on the information contained in your post.

However, there is enough there for me to say you should find an independent financial adviser to look at your situation in full.

I am an independent financial adviser and a pension transfer specialist.

Go on then - I won't hold you to anything. Cheers fj

Aegis

bigfreddiel wrote: »

What should I do with my lump sum - approx £25k?

Basically I'm looking for income.

My age: 60
Pension: £11k p/a
S&I: £300k approx - average 4-6% tax free
ILSC, S&S & Cash ISAs, PBs, Savings acct
No mortgage
Married
Partners Pension £9k

UK resident
Standard tax payer

So I'm looking for ideas on my question above.

cheers

fj

How much income do you think you need?

atush

I would put it in wasy access best paying SA in lower tax person's name. until NSI puts out a new ILSC, as yu seem to have some equity exposure.

But PB's? Keep most of that in equities/cash. Dont' gamble too much.

bigfreddiel

Aegis wrote: »

How much income do you think you need?

Currently we have £28k pa after tax
My self £21k - i'm still working
My wife £7k

I will have £11k when I retire next year - I woul like £18k - an additional £7k

Cheers

fj

Aegis

bigfreddiel wrote: »

Currently we have £28k pa after tax
My self £21k - i'm still working
My wife £7k

I will have £11k when I retire next year - I woul like £18k - an additional £7k

Cheers

fj

Ok, so the income yield requirement to hold a steady nominal value is 2.3%, readily achievable.

Even taking into account inflation, you're in a pretty good position. I've put together a crude spreadsheet which shows that if you look to invest with approximately a 3% growth rate and assume inflation of 3% in the long term, you'll have enough to keep you going for a little over 40 years, though this would deplete your capital significantly. Taking a little risk and aiming for 5% growth (i.e. 2% over inflation, in this example), you're looking at a very sustainable position. Note that this is looking at net yields, not gross, so if you pay tax that needs to be accounted for.

All in all, it will largely be dependent on how much risk you want to take to try to provide you with either a higher level of income in the long run or a larger portfolio from which you can take capital payments periodically for luxuries.

Edit: I should add that this is a very crude calculation indeed and you should definitely discuss this with a professional adviser as a client if you're looking to model your cashflow through your retirement more accurately.

Linton

bigfreddiel wrote: »

Currently we have £28k pa after tax
My self £21k - i'm still working
My wife £7k

I will have £11k when I retire next year - I woul like £18k - an additional £7k

Cheers

fj

What about state pension? That will fix most of the gap when you get to 65.