Where to put lump sum?

lazza1970

Hi, I have recently retired. My retirement lump sum was £40,000. I was wondering where would be the best bank account or isa to keep the money in. I'm 65 and my wife is 70. We would need access to about £10,000 but the rest of the money won't be touched. Any help would be greatly appreciated.

innovate

An ISA might be a good place for some of your money but you can't put £40K into an ISA at once.

You should spend some time roaming through the forums to figure out whether any of the other interest-bearing accounts would be of any use to you.

bigfreddiel

innovate wrote: »

An ISA might be a good place for some of your money but you can't put £40K into an ISA at once.

s&s isa in low cost trackers -that takes care of £23k, you're using £10k that leaves £7k for next years isa

simples

fj

innovate

bigfreddiel wrote: »

s&s isa in low cost trackers -that takes care of £23k, you're using £10k that leaves £7k for next years isa

simples

fj

At 65, I would be a tad careful on how much of what might be my lifetime's cash I would put into any tracker.

bigfreddiel

innovate wrote: »

At 65, I would be a tad careful on how much of what might be my lifetime's cash I would put into any tracker.

true, but doing nothing and you lose 2%+ pa due to inflation

fj

AndyPK

You could put 25k into Investec.
Although not a great rate at the moment it will automatically increase well if the market ever does!
It's a save option.

Put the rest into a Santander 123 account as that will earn nice interest while you wait to spend 10k of it.

badger09

lazza1970 wrote: »

Hi, I have recently retired. My retirement lump sum was £40,000. I was wondering where would be the best bank account or isa to keep the money in. I'm 65 and my wife is 70. We would need access to about £10,000 but the rest of the money won't be touched. Any help would be greatly appreciated.

Congratulations on your retirement - hope you enjoy it

You haven't given very much information, for example - do you have other savings, mortgage, other debts, etc and whether you need the £40k to supplement your pension income.

You say you need access to £10k - so, depending on your own & your wife's tax situation, cash ISAs could be a good place to start, though at the moment several current accounts are paying better rates than ISAs.

If you don't need access to the other £30k long term - and by that I mean say 5 years or longer, and you have other savings, you might want to consider S&S ISAs.

psychic_teabag

AndyPK wrote: »

You could put 25k into Investec.
Although not a great rate at the moment it will automatically increase well if the market ever does!
It's a save option.

Unfortunately, it will also follow rates down if they continue in that direction. Choosing a normal account with a bonus would at least give a floor for a while. (I moved some money out of Investec into accounts which currently have a higher rate, though unfortunately those bonuses will be ending soon.)

badger09

psychic_teabag wrote: »

Unfortunately, it will also follow rates down if they continue in that direction. Choosing a normal account with a bonus would at least give a floor for a while. (I moved some money out of Investec into accounts which currently have a higher rate, though unfortunately those bonuses will be ending soon.)

Never actually got round to using the Investec account, but when I first looked at it I assumed it was aimed squarely at those who didn't have time or inclination to chase the best rates -and for them it was a very good easy option.

However, I have both the time and the inclination which is why I've never used it

I also assume it doesn't include the best paying current accounts in its comparison

bigfreddiel

AndyPK wrote: »

Put the rest into a Santander 123 account as that will earn nice interest while you wait to spend 10k of it.

....and to get the best rate (3% gross - 2.4% or 1.8% net) you must pay in (not just move) £500/month and set up 2 sos!

cheers

fj

jem16

bigfreddiel wrote: »

....and to get the best rate (3% gross - 2.4% or 1.8% net) you must pay in (not just move) £500/month and set up 2 sos!

cheers

fj

The £500 can simply be moved from another bank to Santander and back again. As for the Direct Debits ( not standing orders ) they just need to be set up, they don't need to actually pay out, although if you use direct debits that pay cashback you will earn more.

Far less risky than advising someone to put their retirement lump sum into trackers without finding out anything about their circumstances!