My Completely Confused

cityboyhirst

Hi All

I am 54 and my wife is 52. We are looking to retire in about 5 or 6 years. I am a recovering alcoholic and as a result I have never saved, or even considered saving money, until now. We both work and have well paid jobs, but the only investment we have made for our future is our workplace pensions. We can put away around £500 a month and are set to receive about £100,000 when sadly my wife's father, with terminal cancer, passes.
We are bamboozled with all the options do we invest the money into property, stocks and shares, bonds, ISA's? Even when we look into financial advisers there are FA's for pensions, investment, dept.
An idea of the first step or general steps to follow would be a great help. 

Thanks 

Cityboy 

Dazed_and_C0nfused

First step is that most people avoid financial advisors (FA's).

If you feel you would benefit from advice (which is the normal for lots of people) then you should consider an independent financial advisor (IFA).

Cus

What will your expenses be in retirement?
What are your current earnings and pension amounts, and what are they invested in?
What is your attitude to risk?

That will help people here opine..

squirrelpie

The first step is to actually start putting away the £500 a month. You can put it in a savings account and then move it later once you understand what is better and are comfortable about it. ISAs and SIPPs can be very useful.

There's a lot of useful stuff about savings and finance to read on the internet and in books. As already mentioned Independent Financial Advisors (IFA) can be another source of help once you have some savings to invest.

If you're thinking of retiring in 5-6 years then you should be thinking about how much money you will spend each year once you're retired and how you will pay for that. Particularly until you qualify for a state pension (have you checked you're on course to receive a full one?).

Albermarle

Probably the simplest option is just to increase contributions by £500 a month to your workplace pensions.
Then when the £100K arrives, you can pop it in a easy access savings account and/or buy some Premium Bonds, whilst you feel more confident what to do with it.
Savings - All Guides - MoneySavingExpert

LHW99

You could split the £500 and add half each to yours / your wife's company pensions. It might mean your company adds a bit more themselves (not all will though).

Kniphofia7

There is lots of information and guidance on this site.  I would start with putting your £500 into savings or ISA.  Look into setting up a SIPP or similar private pension.  If you pay extra into your work pension IMO your employer is not obliged to increase their contribution.  Luckily savings rates are still pretty good at the moment so take advantage of that.

xylophone

You are hoping to retire well before either of you reach SPA so that increasing contributions to your workplace pensions could be a very wise move, particularly if either/both of you are higher rate tax payers.

You might consider contributing as much as possible, using the bulk of the £100,000 as income replacement?

With regard to the £500 a month, consider opening a joint current account with First Direct and each opening a Regular Saver?

And check out your state pension forecasts.

https://www.gov.uk/check-state-pension

Hoenir

 dcityboyhirst said:

We are looking to retire in about 5 or 6 years.

£500 per month isn't much to be putting away. If the plan is to retire at any early age. 

Albermarle

Kniphofia7 said:

There is lots of information and guidance on this site.  I would start with putting your £500 into savings or ISA.  Look into setting up a SIPP or similar private pension.  If you pay extra into your work pension IMO your employer is not obliged to increase their contribution.  Luckily savings rates are still pretty good at the moment so take advantage of that.

They are not obliged to but some will. So always best to get clear info about your workplace pension before thinking about setting up a separate one. Most workplace pensions are anyway perfectly suitable for the large majority, who know little about choosing investments.

af1963

The phrase, "the only investment we have made for our future is our workplace pensions",  could cover a whole range of possibilities, depending on what type of workplace pension and how much is in them or how much regular income they are set to pay out - and how that compares to your expected spending needs.