Do I actually need to speak to an FA.

Susan1962

Hi all and apologies if this is a silly question.

I've just been granted Ill health retiral finally and am more than happy with the pension.it mentions in the paperwork that I should speak t an FA but I'm not sure if it would be a waste of money as my lump sum is (relatively) low and that would eat into it. I'll get around £19000 lump sum.
My plan had been to put £3000 into an easy access emergency fund; £6000 int an S&S ISA and the rest into the highest rate bank account I can find.

So is that a good or bad plan and should I really stump up for an FA instead?

Albermarle

Most financial companies always cover themselves by saying you should speak to a financial advisor about almost anything . Then if you don't they can not be blamed for anything.
You are correct that it would not be worth it for the sum involved.

My plan had been to put £3000 into an easy access emergency fund; £6000 int an S&S ISA and the rest into the highest rate bank account I can find.

If you put £10K in a bank account ( which by its nature will be relatively easy access) then in fact you will have £13 K as easy access.
The key point is the time scale of when you might need the money . If not for 10 years or more then better to put more in the S& S ISA . Also a S&S ISA is only a tax wrapper and you can include different types of investments into it , some higher risk/potential return than others .

Susan1962

Thanks Albemarle, great advice. I really hadn't thought about the easy access and emergency funds being the same thing! I'm glad to hear that an FA isn't crucial. I'll think more about divvying up the mone into medium and long term savings but keep the bulk in longer term.

Having worked ful time till now I've always had a relatively small emergency fund as I could cover most things on the credit card then pay it back.

Do you think £3000 is enough? Or maybe too much? I'll get circa £18000 p.a. between an LGPS and small private scheme. Given the tax/NI reduction I'm hoping I can still afford to drip feed savings until I get SP in 10 years time.

Albermarle

Difficult to judge what an emergency amount of cash could be as it depends on your situation.
For example if you have a car, these can bring sudden expenses . As can old houses with old boilers etc.
If you do not have a car and live in a flat then £3K should be plenty .
On a 10 year timescale , its probably worth putting a reasonable amount in a S&S ISA . Nothing is guaranteed but normally you would expect to see better growth than just in a norrmal savings account. Just be aware that in a S&S ISA you will have a choice of the fund(s) where your money will actually be invested. Some with have higher potential gain/loss than others and you will need to decide your 'risk appetite' to use the jargon. Whatever you choose don't panic and with draw the money if there is a downturn in their value . Just wait for the recovery which will come sooner or later.

Susan1962

Thanks again Albemarle. A lot to digest just need to sort out voluntary NI now ...