Did You Blow Some (or All) of Your Lump Sum?

Bobziz

britishboy said:

I'm only 44 but part of my tax free lump sum will go on a new (for me) car, and possibly towards moving somewhere quieter in the UK, or, depending on the situation of the world in 2035, overseas (crosses fingers)

Depending on the situation in the world in 2035 you may find yourself living in the seas !

michaels

cloud_dog said:

Travel will be our thing, not long-haul but spend time travelling the UK and Europe (for example). 

The how is the big question and a bit of a stumbling block for me TBH, e.g. spend a chunk of money on a campervan (hopefully lots of cheaper second hand ones will be available by the time we come to jump ship), or budget on more frequent holidays (7-14 days each), or standard holiday with lots of frequent long weekend breaks in between, or any combination thereof

Unfortunately my number crunching side looks at the cost of a reasonable second hand campervan and thinks "that is an awful lot of holidays/breaks" 

Currently i fancy the idea of touring around in a nice car and staying in hotels or airbnbs as the depreciatuon in a camper would seem to buy a lot of nights but dont see many others thinkning this way. Are there drawbacks? 

cfw1994

drummersdale said:

Ibrahim5 said:

Knocking down walls doesn't cost much. Just need a big hammer.

And perhaps a structural engineer and a few RSJs....

Details, details 🤣

A wise retired pal gave me some advice a few years back:

• Make sure all the big, expensive jobs around the house(s) have been done 
• Make sure you have hobbies, especially ones that get you out meeting people
• Buy yourself a nice car
• Be wary of "the bunch of thieves – sorry, financial advisers", especially with wealth management in their titles    

We spent the past few years getting one final major alteration done, new windows & doors throughout....moved to an amazing EV, but plan on keeping the workhorse SUV as a second car forever.....but I do get that this costs us.
Have plenty of hobbies, a holiday cottage to manage more closely & enough volunteering time sorted
Having managed our finances for decades, & paid attention to this forum from many years ago (with thanks to the IFAs who do contribute!), no problems with that last point 😂

cloud_dog said:

Travel will be our thing, not long-haul but spend time travelling the UK and Europe (for example). 

The how is the big question and a bit of a stumbling block for me TBH, e.g. spend a chunk of money on a campervan (hopefully lots of cheaper second hand ones will be available by the time we come to jump ship), or budget on more frequent holidays (7-14 days each), or standard holiday with lots of frequent long weekend breaks in between, or any combination thereof

Unfortunately my number crunching side looks at the cost of a reasonable second hand campervan and thinks "that is an awful lot of holidays/breaks" 

That is kind of where I keep coming back to 👀

michaels said:

Currently I fancy the idea of touring around in a nice car and staying in hotels or airbnbs as the depreciation in a camper would seem to buy a lot of nights but don't see many others thinking this way.  Are there drawbacks? 

Campers depreciate a lot less than regular cars, for sure.....although prices have been stronger in part due to Covid...
That said, I suspect in 12-18 months, there may be a glut of campers on the market, & the prices may return to 'normal'.  
We do keep thinking "yes, but we have comfy cars, still like camping with a nice comfy tent, so why not spend those holidays driving, camping & mixing with more luxurious accommodation" ⛺🛎️🏨
It is a tricky one: I'd still like a luxury camper too!!

To answer the original question....no, not really.   Maybe some went on a few gadgets, but nothing significant.
Paid off the mortgage: not a significant amount, & technically would have been wiser to leave that, but it was nice to clear 👍
Invested the rest (taken due to approaching the LTA when future DB schemes are considered, & performance since has thoroughly vindicated that decision!)

MallyGirl

It is another way to travel. We like the fresh air aspects of the camper. We tend to stay 2 or 3 nights and do local things then move on to another location, possibly with bikes on the back. There are lots of places that let you camp overnight for free if you eat there so you can have a few drinks and then just go to bed. Hotels can get quite pricey if you have to buy every meal and drink there - we barbecue dinner most nights having bought local but have a fridge for milk, beer and sandwich fillings plus the crockery and cutlery to have breakfast and make packed lunch.

michaels

MallyGirl said:

It is another way to travel. We like the fresh air aspects of the camper. We tend to stay 2 or 3 nights and do local things then move on to another location, possibly with bikes on the back. There are lots of places that let you camp overnight for free if you eat there so you can have a few drinks and then just go to bed. Hotels can get quite pricey if you have to buy every meal and drink there - we barbecue dinner most nights having bought local but have a fridge for milk, beer and sandwich fillings plus the crockery and cutlery to have breakfast and make packed lunch.

Actually thinking about it ebikes could make that work, I was thinking one of the downsides of a campervan was too big to drive into and park in the places you want to visit and bikes have no ac and holiday destinations are generally hot but ebikes might well be a solution. Thanks

Langtang

hugheskevi said:

Stubod said:

Langtang said:

GunJack said:

Langtang said:

michaels said:

Perhaps if I had a DB pension with a compulsory lump sum I would see it differently.

Interesting. We've just been speaking about this the other night. My wife has an NHS pension. Does she have to take the lump sum? Can she not just leave the LS in, and get a higher pension?

It depends on what the rules are for the section(s) of the NHS pension she's in..

24 years in '95, and a year or so in the latest one..

If I remember correctly the "95" scheme has a compulsory lump some equal to 3 years pension. (I know as my OH had one, hence the reason for spending some of it).

I would have preferred to leave it in the scheme and have a higher monthly pension but in the 95 scheme that is not an option. The later schemes (2008 / 2015), have an option to take a lump some but at a reduced monthly pension..

Is inverse commutation not an option in the 95 scheme? This link suggests it is for the Scottish scheme.

Thanks very much for that. It looks complicated, but I'll have a damned good go at it. I very much appreciate your help.

Langtang

Secret2ndAccount said:

Langtang said:
... We're not particularly in need of the LS so would have preferred that it stayed put. Hey ho, I won't knock it back.

Stubod said:

I would have preferred to leave it in the scheme and have a higher monthly pension but in the 95 scheme that is not an option. 

If you don't need the money there are a couple of things you can do:
1. Pile as much as you can into your pensions (consider workplace vs SIPP) in the last year or two before you retire. After you retire, keep paying 2880 each per year into your SIPPs. Should be doing that anyway really.
2. Pay it into ISA's, max 20k each before April 5th, then 20k each after April 6th.
You should be able to get the money invested again pretty quickly, so that it doesn't stop growing. Then you can take it whenever you need it.

Thanks for your insight. We have an inheritance which we're trying to make tax friendly at present so probably no space for the sum, but will definitely think about the pension payments.

jim8888

I've often thought about buying a retirement property abroad, but I always come back to how many fantastic holidays abroad I could have for the same price renting Airbnb's. I also like the idea of a camper van, but again I'd look to rent one. Sometimes I even think about selling up the house, investing the money, and renting for retirement. I know that renting and not owning anything is a bit of a millennial idea, but I think there might be a lot of sense in it as you grow older. After all, a car PCP deal is pretty much renting a car for three or four years, isn't it?

Sea_Shell

jim8888 said:

I've often thought about buying a retirement property abroad, but I always come back to how many fantastic holidays abroad I could have for the same price renting Airbnb's. I also like the idea of a camper van, but again I'd look to rent one. Sometimes I even think about selling up the house, investing the money, and renting for retirement. I know that renting and not owning anything is a bit of a millennial idea, but I think there might be a lot of sense in it as you grow older. After all, a car PCP deal is pretty much renting a car for three or four years, isn't it?

We (briefly) had thought of buying some sort of second holiday property....but then, like you, thought how many holidays could we get for the price of that property, plus you then feel obliged to holiday in the same place all the time, to get your monies worth.

We'd rather be able to go where we fancy than just "back to the cottage/villa/lodge again".

As for renting in your dotage, I can see the appeal, especially if your tenancy is secure.   No maintenance to worry about etc.   And hopefully in an area not surrounded by "family" homes with kids on trampolines almost what feels like 24/7!!

Stubod

When we got our lump sum we went through the "buy a holiday let v campervan v caravan" loop several times, and they all seem to come with certain disadvantages, (cost, storage space, car for towing, flexibility etc.).

We have come to the conclusion that it is probably best to go the "rent a property" / hotel option, or even better still "house sitting"!