What to do with large pot of money

bloke91

I will soon be coming into some money, around 100k.

Always wanted to own a second property and rent it out until I retire and then either sell it or pass it down to my children, so could perhaps add to the 100k pot for a two bedroom semi or terraced.  Also conscious there could be some other better ways to invest the cash though.

I am looking for some recommendations, advice and suggestions on what to do with in terms of longer term investment.  The drive behind it is to allow us to be more comfortable in retirement or pass the investment down to my children.

Have summarised some additional background below:

·         I am married with two children.

·         I am aged 38 and a 40% tax payer.

·         Both myself and my wife in full time employment.

·         Mortgage will be paid off in 10 years time and we have good jobs and both me and my wife have 9 months of our monthly salary in cash.

·         In terms of pensions my wife has a good local government employer pension on top of the standard government pension.

·         In addition to the standard government pension.  I have a local government employer pension yearly income expected to provide 7k a year from a previous job.  Also a 80k pot in a defined contribution stock market based pension, where my employer pays 8% and I pay 10%. i.e Combined total of 18%

·         No other debt.

Welcome your thoughts and thanks for your time.

El_Torro

Buy to Let is an option, though on this forum most people would suggest increasing your pension pots and Stocks & Shares ISAs before becoming a landlord. Bear in mind as well that as a 40% tax payer you will be paying this rate on all BTL profits. 

Your pension provisions seem pretty decent, considering your age. A SIPP could be useful (especially for your wife), especially if you plan to retire before the DB pensions start paying out.

Given what you’ve told us about your situation I think you could maximise more tax efficient investments than BTL, specifically pensions, ISAs, and perhaps even JISAs for your kids. 

If you really do want to go with a BTL I would seriously consider the pros and cons. There is a lot of responsibility involved and the burden on landlords (taxation and legislation) only appears to be getting heavier as the years go by.

Millyonare

Buy a Lamborghini and have some fun for a bit.

Albermarle

Being a 40% taxpayer points strongly  towards adding more to your employer DC pension ( or to a separate DC pension)

Each £1000 you add only costs you £600, and unlikely you will pay more than 15% tax on the way out, so a huge boost of free money.
Some points to note
You can not add more than £40K pa to a pension ( includes your and employers contributions and tax relief) , although you maybe be able to bring forward unused allowances for previous years.
You can not claim more 40% tax relief than 40% tax you pay. 
If your employer operates a salary sacrifice scheme for pension contributions, then better to contribute via that way.
Otherwise you could still do it that way , or make ad hoc contributions. In this case you could make these to another pension if for some reason you were not happy with the employer pension.
If contributions come out of taxed pay, you need to claim back the higher rate tax relief from HMRC.

Having a good DC pot and guaranteed income from a DB pension, is a nice place to be .

garyelder

I retired last April at the age of 59
sold rented property to fund me upto 67 £300k
have another rented property which is a good help now getting1k a month  rent split with wife 
average 2.5 % on my savings and rising  and got 500k pension pot at present this has slipped by 30k but now steady 
got my house 750k no mortgage 
I worked hard for it now enjoying it