pension lump sum ..new car or not !!

fklup

Well having taken out my lump sum at 58 ...not much its just £50,000 ..and i get £112 per week pension payed on top of my wages ..i have decided to drop my hours from 39 to 24 hours per week as my pension will make up the shortfall while giving me more leisure time ..so i got £51,000 in the bank what am i going to do with it ..? then i see the best looking Land rover 90 i have ever seen ..[car/jeep i have always wanted since i was 20 years of age but never got around to it] ..is not cheap ..£30,000 to be exact but its immaculate and being as they have stopped making them there value has increased ..while i own my own house , no mortgage , and no family , wife or children .i have no one to leave any money to when i die ..its just as much as i want that land rover it will only leave me with £20,000 so its taken over 50% of my lump sum ...i can not make my mind up ..i don't want to waste the money away as i have never had as much as £50,000 in my bank account before , and it gives me peace of mind not having to worry about bills etc etc ..

Marcon

Four months ago you didn't need a car and were happy to cycle everywhere: https://forums.moneysavingexpert.com/discussion/6204470/i-am-considering-retiring-from-work-at-58#latest

You will never again have as much cash in your bank account, so decide which matters more: a car you didn't need a few months ago or ongoing peace of mind.

jamjar92

I think only you can decide this, see the thread "Enjoy life while you can." and "Pensions Planning: The NUMBER"

sevenhills

Marcon said:

Four months ago you didn't need a car and were happy to cycle everywhere: https://forums.moneysavingexpert.com/discussion/6204470/i-am-considering-retiring-from-work-at-58#latest
You will never again have as much cash in your bank account, so decide which matters more: a car you didn't need a few months ago or ongoing peace of mind.

If the OP is careful he can retire early. I have a similar amount of pension, but I am still building it up. I still have a mortgage to pay, but I may have enough to stop work in 2-5 years, but not if I spend my cash now.

No point in taking your money to the grave, just don't rush it. I want to buy myself a van, but even £5,000 would be a lot of money for me to spend.

ossie48

Its quite comforting to have a decent amount of savings. I would personally value that over a newer car. However if its something you've always wanted (and you won't regret the decision further down the line) then go for it. I know you said its value has gone up but the car market is all over the place at the moment. Buying £30k cars isn't usually a sound financial decision unless its a classic that will appreciate / hold its value (and usually expensive to maintain). That said if the ownership gives you pleasure and you don't think you'll suffer buyers remorse then obviously the choice is yours.  

Secret2ndAccount

30k is top dollar for a Land Rover. It's quite a coincidence that your perfect car has come along at the exact moment you have the money in your bank account. Is it possible that if you wait a few months you might find a nice one that would be just as much fun to drive, but was only 20k? If you needed the money for something, would this 30k car be easy to sell, and what would you get for it?

Some people suggest that your car should not exceed a proportion of your total wealth. 10% is often given as the upper limit. So if everything you own adds up to 300k, you could countenance dropping 30k on a car.

For me, the key question is your financial position. Hopefully your earnings + your pension is plenty to live on right now. What about when you retire? State pension + work pension. Can you do okay on that? If so, and you've got 50k in the bank, I could see spending half of it on something you want.

zagubov

For the cost of that chelsea tractor whose construction probably has the carbon footprint of its lifetime petrol consumption, you could get much better use out of top-end public transport, by which I mean cruises and international flights which will pack a lot more experiences and excitement in your future years.
Don't rush into this purchase. This travel-averse period will soon end and there is so much more you'll be able to do travel-wise that'll be better than driving around in a glass-lined tank waiting for traffic lights to change.

shinytop

OP, it's up to you but unless you need the £51k for current or future living expenses it's a lot of money to have sitting in cash.  I assume the £30k LR isn't new so it's worst depreciation will have already happened.  If it's a good price for what it is then even if you had to sell it then you'd only lose a fraction of the purchase price.  Work out if you could afford that plus the running costs.   It's your choice but you might end up at 65, retired and with £53,000 in your high interest account (which is only worth £45,000 at today's prices) thinking, "I wish I'd bought that Land Rover". 

sevenhills

Secret2ndAccount said:

Some people suggest that your car should not exceed a proportion of your total wealth. 10% is often given as the upper limit. So if everything you own adds up to 300k, you could countenance dropping 30k on a car.

Maybe 10%/20% of your yearly earnings would be better, total wealth is a lot of money and what would it include?

If its your final vehicle and you are already retired with ample finances, maybe more.

Thrugelmir

Sounds as if you still reliant on employment income for a while longer. I'd be hesitant to see that amount of money gone. 

Alter_ego

People who have reached their pension age should have grown out of the "boy's toys" stage