Have I done the right thing...

simonfitba

Hello all,

I'm helping my relative with her finances and want to make sure I'm on the right track.

The facts....

She's 63, single, and has a pension pot of £170k in a 50/50 split of bonds/shares with an IFA. Her risk profile is moderate.

She also has State pension of £5720 per year.

After a house sale, her life savings are £70k. No mortgage.

I've advised her to put the max in a S&S ISA either side of April in Vanguard Lifestrategy 60/40 (shares/bonds). This would be £23k-ish.

She has also opened up 6 accounts playing 3% with TSB and BoS. These hold £30k in total.

I think the best idea would be to max out the ISA in the future while keeping a cushion on emergency cash (£10K).

The money has to last her the rest of her days. Is there anything else she should be doing?

All input most welcome.

sandsy

Is she still working and contributing to the pension? If so, what percent of salary?

simonfitba

sandsy wrote: »

Is she still working and contributing to the pension? If so, what percent of salary?

Sorry forgot to say she's retired with no potential of any further income. She doesn't contribute to pension any more.

Daniel54

Is the pension pot in drawdown or is she planning to buy an annuity ? Has she taken the 25% tax free lump sum ?

Is she in good health ?

kidmugsy

Has she crystallised her pension?

Is she interested in buying an annuity or does she want to use Income Drawdown?

AlwaysLearnin

How much will she need each year?

Lloyds Vantage also provides 3 x 3% accounts, although according to other threads might be pulled for new applicants soon.

simonfitba

She has crystallised her pension and is in the process of taking the 25% tax-free lump sum, spread over a few years. I reckon she has another couple of years of that to go.

After that she plans to use income drawdown rather than buying an annuity.

As a rough guess, I'd imagine she needs £12k a year. She's also in good health.

Any other questions, just fire away, folks.

simonfitba

AlwaysLearnin wrote: »

Lloyds Vantage also provides 3 x 3% accounts, although according to other threads might be pulled for new applicants soon.

Don't think she can open the Lloyds accounts as she's in Scotland and has the TSB ones. My LLoyds Vantage accs were all switched over to the TSB brand automatically.

simonfitba

Would it be wise to keep filling the S&S ISA using Lifestrat 60% equity, or increase the amount of bonds in later years?

bigadaj

simonfitba wrote: »

Would it be wise to keep filling the S&S ISA using Lifestrat 60% equity, or increase the amount of bonds in later years?

That would be reasonable, you're comment on increasing bond allocation is correct in normal theory but some people consider bonds to still be in bubble territory, so might be worth holding cash as a proxy. She could put £40k into two Santander 123 accounts.

The pru calculator indicates that maximum capped drawdown possible is nearly £11000 though she is of course under no obligation to take all of that and can leave some invested.

simonfitba

Good point about the 123 acc. That's a decent option.

She won't be taking any pension cash this year and will leave it invested. The extra cash from the house sale (£12k, not including the £30k of savings in Vantage accs) will keep her ticking over for at least a year.