What to do with £115k??

Korkyb

I've just (semi) retired at 55 years old and between my final salary pension lump sum and savings currently have around £115k sitting in an easy access account.

Just wondering best way to manage this money.

No debts & house owned outright.

At the moment pension + part time earnings should be sufficient to keep me in Drambuie but will likely need to use this money to see me through from when I stop work completely (not for a couple / few years yet) to the state pension.

I was wondering about popping 85k into a 6 month fixed account or a 3  or 4 month notice account then reviewing things in the new year.

Thanks for any thoughts!

Bigwheels1111

Tax on the interest could be an issue for you.
Still working and some pension.
If I’ve understood HMRC info, up to £18570 is kind of tax free.
£12570 earnings, Next 0% £5000 starter rate savings and you £1000 tax free savings.
So if earnings and interest don’t go over £18570 there will be no tax to pay.
As of today Atom have 4% fixed for 2 years.
Me personally, I’m sticking with easy access until new year, hoping for 5% for 5 year fixed accounts to give me a nice income.
4% is the first salvo from the banks today before boe rate rise.

tacpot12

How much of the £115K do you need to keep you through to when your state pension kicks in?

jimjames

If you have no money invested then that might be worth considering if this is money that's needed to see you through retirement. Cash savings are unlikely to beat inflation so will be worth less and less as time goes on.

Grumpy_chap

If you only have final salary pension, would there be merit in putting any of the £115k into a defined contribution pension, so gaining the tax uplift on the contributions?  There are limits on how much can be contributed and those limits are lower if any of the pension already drawn is from defined contribution scheme.

Still, the worst case would be that you can put £2,880 and it will be magically converted into £3,600.

Albermarle

I've just (semi) retired at 55 years old and between my final salary pension lump sum and savings currently have around £115k sitting in an easy access account

Bit late now, but if you had no real need for the lump sum, you could have been better not taking it, and keepin a bigger final salary pension ( assuming that was possible )

As already said you need to get some of this £115K to work, rather than just sitting in a savings account. That way you are more likely to be able to replace the pension income you have given up. If you have a pension with your current employer, adding more to that could be a good idea. Or you could look at a Stocks and Shares ISA ( or both )

Pompeydave1967

Might be a gamble but what about atoms 2 yr fixed @ 4% - £85k would get you over £280/month interest.

RobM99

Interest rates will possibly go up again tomorrow (I think) so easy access now, maybe a fix after that. 

Korkyb

The pension had a "compulsory" lump sum & I took the minimum I was able to.

Tax may be an issue as my pension is just over 25k so with the part time job I'll be on around £37k.

My wife is planning to claim her pension in around a year (when she hits 55) and should get a (final salary) pension of around £10k with a lump sum of 25 - £30k. (she also has a smaller pension of of around 2 or £3k kicking in when she hits 60).

So at todays figures once we stop working completely we should be on around £37k between us.......If we make it to state pension age we will be very, very comfortable!!

Given that I dont think we would "have" to rely on the (by then £140k ish) pot of cash and would probably just use it as an emergency fund and to treat ourselves (holidays and the like) and £20k / £30k ish might (possibly) be used to build a sunroom.

Once her indoors retires would it make sense for money to be in her name to ? minimise tax?? (her pension will likely be £10k ish).

In the meantime would splitting the money between us allow us both to use the £1000 "personal savings allowance"?

I'll have a look at investment side of things - wife may take some convincing of that route...

Interest rates just up by 0.5% in the news so holding off seems the order of the day!

Just remembered that due to the "McCloud Judgement" and how it impacts o NHS pensions I will be given the choice whether to stick with my current pension deal or to opt for the pension I was on pre 2015.

By my (primitive) calculations by opting for the older (1995) pension deal my annual pension will increase by a just a couple of hundred pounds but I'll be due around £15k extra lump sum taking the cash pot to around £155k ish.

More money to fiddle with !!!

Millyonare

£115k will buy a nice Aston, Ferrari or Lambo as a retirement gift.

eskbanker

Millyonare said:

£115k will buy a nice Aston, Ferrari or Lambo as a retirement gift.

Not a new one though....