How to Invest £150k

Albermarle

Also, off topic, but having just lost my dad very recently at a relatively young age (he was 65) has made me think twice about all this planning for the later years

Sorry to hear about your Dad.

Unfortunately we all know people who died 'before their time' . A ( distant) relative of mine has just died at 66, 3 months after retiring. I had a work colleague who in his last year at work was diagnosed with MND  and died a few months after retiring etc etc.

So this tends to skew ones view of life expectancy, despite what the statistics say, which is that you have quite a reasonable chance of living into your Nineties.

P1Fanatic

As always its a balance between enjoying yourself now and being comfortable when you retire. The best way someone ever explained the benefit of pensions is that for anything else (including LISA) you are taking it from your gross salary so you have already paid Tax and NI on that amount. Paying into your pension you are taking it from net salary so before you lose anything (depending on how you pay into a pension of course). As you are only a Basic rate tax payer the difference is not so big but its still a substantial amount of additional money to be losing out on.

dealyboy

Hi OP @moneysaver2019 and welcome to MSE ... you've certainly proved your name

I think you've done very well and it is a fair question to ask where to invest the sums you've accumulated. It is a matter of your risk appetite and for what length of time you are prepared to have your money tied up.

There are all sorts of investment products and you need to do your research to determine whether you want to DIY or have an IFA manage a portfolio for you. This board on moneysavingexpert and monevator blogs are both excellent resources.

Pensions vs ISAs are horses for courses and it is not so clear cut which are best, it depends, but a Workplace pension is a must have for the employer 3% alone. You may find this excellent article useful ... https://monevator.com/sipps-vs-isas-best-pension-vehicle/

As I'm sure you know ISAs are taxed money on the way in and tax free on the way out, whereas SIPPs get tax relief on the way in and 25% tax free on the way out the remainder being taxed. This is only 6.25% difference in favour of pensions if you have the same tax rate at both ends as seems likely in your case, so e.g. pensions £106,250 vs. ISAs £100,000 for the same investments. With ISAs its easy access, whenever you want, but with pensions they're not accessible until aged 55 (corr. thanks @ColdIron) (currently) and then need to be drawn down or put into an annuity. In addition in my experience holding all three SIPP, S&S ISA and state pension, the SIPP has been more complicated and costly in terms of charges.

It may also be worth talking to 'moneyhelper' (government sponsored) and you can arrange an appointment with Pension Wise through them ... https://www.moneyhelper.org.uk/en. 

ColdIron

dealyboy said:

but with pensions they're not accessible until aged 57 (currently)

55 currently, rising to 57 on 6th April 2028

Albermarle

This is only 6.25% difference in favour of pensions if you have the same tax rate at both ends as seems likely in your case, so e.g. pensions £106,250 vs. ISAs £100,000 for the same investments. 

However if you can take some of the pension income below your personal allowance ( say in the years  inbetween stopping working and before getting the state pension) you will gain a lot more than 6.25% on that income.

addition in my experience holding all three SIPP, S&S ISA and state pension, the SIPP has been more complicated and costly in terms of charges.

You can not really compare getting the state pension to the other two.

A pension is always going to be a bit more complicated, to work out how much tax relief you can get and a efficient strategy for withdrawal ( see above comment). With some providers the costs for a S&S ISA and a pension ( with the same investments in them ) are the same. With others the ISA is cheaper. Sometimes the pension is the same basic price with some extra charges.