Pension/investment advice

xylophone

I am looking at taking the full lump sum and using £35k to pay off our mortgage which will then leave us debt free.
We have 2 grown up daughters and I am wanting to give each of them £10k and am also looking at re-decorating/refurbishing the whole house, and possibly spending around £15k on a new car, so estimate after this I will have approximately £60-£65k leftover ??

If you don't need to take the full lump sum to meet your goals, why do so?

Take as much as you require in the lump sum and increased pension for the rest?

atush

Considering I wouldn't even know what a multi asset fund is I'm not so sure!!!

You've been around here loong enough to know lol.

A multi asset fund s a collective investment that holds equities such as shares/trusts and then also bonds/guilts and other cash like investments and sometimes property.

Good for diversity, and also often global funds so not too tied to the UK.

Given if they are held in S&S isas or pension wrappers, unlike your BTLs the costs are low and both income and gains arent taxed (unlike your BTLs)

Audaxer

bostonerimus wrote: »

Assuming the OP lives another 30 years and 3% inflation they would have to get a 5.5% annual return from the 140k to equal the pension.

That's true, but if he wants to use an immediate £75k to repay the mortgage, buy a new car, gift to daughters etc., maybe taking a lump sum of at least £75k is a better option. That would still give him a good pension for life and in my view more peace of mind for him and his wife having the mortgage cleared.

Bravepants

GSP wrote: »

Yes Xylophone, I am aware of that now.
My post was in relation to wrongly being called out and challenged as "encouraging to be irresponsible", where I believed I was offering advice.

Not good advice though! Especially to someone who has no financial knowledge! Sheesh!

xylophone

then also bonds/guilts

Where creative accountants have been involved?:)

MoneyGeoff

Trinity_Phil wrote: »

I want to invest this somewhere safe (it's taken me 30 years to earn it, so don't want to risk losing it !!).

Trinity_Phil wrote: »

I am totally clueless when it comes to financial matters

Given what you say, it does seem like your money is best off left in the pension. Government backed, index linked payments for the rest of your life.

Why not get a quote for say £70K lump sum and the rest as pension?

Once you have different quotes to consider it will help you compare the options. Is it really worth rushing to pay off the mortgage at the expense of guaranteed pension income?

That £20K lump sum to the children will knock about £1000 per year off your pension, index linked, for the rest of your life. In 20 years time that £1000 per year will be more like £1800 per year. Maybe you'll live another 40 years, who knows?

Taking the lump some is Tax Free though, whereas extra pension money is taxed.

kidmugsy

MoneyGeoff wrote: »

That £20K lump sum to the children will knock about £1000 per year off your pension, index linked, for the rest of your life.

I don't think OP has told us what his daughters plan to do with the money. Perhaps there's a cheaper way to achieve their aim?

Hipperty

If he doesn't take the full lump sum and then, God forbid, he died unexpectedly, would his wife not lose out as her entitlement remains the same irrespective of having taken (or not taken) the lump sum? I.e. The lump sum is then effectively 'lost'?

Deneb

Hipperty wrote: »

If he doesn't take the full lump sum and then, God forbid, he died unexpectedly, would his wife not lose out as her entitlement remains the same irrespective of having taken (or not taken) the lump sum? I.e. The lump sum is then effectively 'lost'?

He could insure against that, if it bothers him. He may already be a member of the Police Federation Group Insurance Scheme which includes £55K life cover for retired members under 65, along with various other insurances including annual travel, RAC, personal accident, home emergency, legal expenses, gadget & mobile phone, all bundled together for a very reasonable monthly premium - substantially less than seeking all the cover separately.

DairyQueen

GSP wrote: »

My post was in relation to wrongly being called out and challenged as "encouraging to be irresponsible", where I believed I was offering advice.

The OP is only 53 and expects to be around for 'a good, few years' (so no health issues). His police pension will be his only guaranteed, index-linked income, other than the SP, for the rest of his life. His wife has 'zero pension to speak of'. He is a novice investor and has a cautious approach to risk.

You were not 'wrongly called out'. As you have no doubt noted, the consensus amongst the expert posters is that OP should max his DB income if at all possible. Perhaps you should consider why?

You are also the only poster ignorant of the basics principles that apply to the majority of public sector pensions.

Offering advice requires:
Rule 1: Self-awareness of ignorance.
Rule 2: primum non nocere.

Have I been guilty of breaking rule 1? Certainly, and hope I have learned much from challenges, not least humility. Posing an indignant defence when justifiably challenged will simply block your pathway to further learning.

I have yet to break rule 2.

Btw, I am one of the few for whom a DB transfer-out was recommended, but then my circumstances are pretty much the opposite of OP's.