Decisions Decisions

MissHap

I had £66k cash sitting in a SIPP with HL which I've now whittled down to £40k.
I don't need to draw anymore but if I do I'll pay basic rate tax on it, which I'm loathe to do.
At 70 years old do I really want to invest it in stocks and shares, or is there another alternative?

dunstonh

At 70 years old do I really want to invest it in stocks and shares, or is there another alternative?

Do you have a reduced life expectancy?
70 is still perfectly fine for equities or a bond/equities mix.

You have already cost yourself money by being in cash and if you remain cash heavy then you will continue to cost yourself money.

Risk is not all about investment risk.  You also need to consider shortfall risk and inflation risk.  Shortfall seems unlikely to be a problem if you don't need the money but inflation risk will come into play.

Stargunner

You could purchase a short term money market fund, which are current returning around 5.0% less your platform fees, or you could buy individual gilts.

Albermarle

MissHap said:

I had £66k cash sitting in a SIPP with HL which I've now whittled down to £40k.
I don't need to draw anymore but if I do I'll pay basic rate tax on it, which I'm loathe to do.
At 70 years old do I really want to invest it in stocks and shares, or is there another alternative?

No problem for you to invest it, but you will need to decide what kind of investment.

The basic choice is that the more of the investment is equity ( means shares) the more it is likely to grow in the long run, but it could be very volatile ( up and down) in the short and medium term.
If you dilute the % equity with bonds ( or alternatively keep some cash back) then the growth will probably be more limited, but the ride less bumpy.

MissHap

I've always been risk averse regarding money and the original concept was to take out what I needed without going above my tax threshold.
I'll not be withdrawing anything for the foreseeable future but I cant rule that out further down the line.
I don't think I have the knowledge or capacity to manage my own investments but I understand that it cant just be left in cash, it needs to grow, any thoughts on the HL Ready Made Pension Plan??

Albermarle

MissHap said:

I've always been risk averse regarding money and the original concept was to take out what I needed without going above my tax threshold.
I'll not be withdrawing anything for the foreseeable future but I cant rule that out further down the line.
I don't think I have the knowledge or capacity to manage my own investments but I understand that it cant just be left in cash, it needs to grow, any thoughts on the HL Ready Made Pension Plan??

That plan is designed for people of pre retirement age, so probably not suitable.
On the forum we hesitate to make specific investment recommendations but in this case you may want to look at low cost multi asset funds like , HSBC global strategy Conservative( available on HL platform). 

Altior

MissHap said:

I've always been risk averse regarding money and the original concept was to take out what I needed without going above my tax threshold.
I'll not be withdrawing anything for the foreseeable future but I cant rule that out further down the line.
I don't think I have the knowledge or capacity to manage my own investments but I understand that it cant just be left in cash, it needs to grow, any thoughts on the HL Ready Made Pension Plan??

What is the intended purpose for the capital? 

MissHap

The £40k is just.....................sitting there.
At this point, financially I don't need to touch it but I'm aware that at some point in the future, I may have to so I don't really want to lock it away if I need easy access to it, and as others have said on this thread, it will eventually be worth less and less so I'm just looking for a home for it, no long term plan, not looking for major growth and I'll be happy with it not losing its value or at least increases.

Altior

Yes that's right, inflation erodes the value eventually. Tax efficiency apart, don't fear using the value rather than losing it. This is the time of your life to enjoy what you've gathered over it. As long as you are otherwise financially secure. It's an important question as it could be that security/capital preservation, or intention to pass it on to beneficiaries, ticking off the bucket list etc etc. 

MissHap

The bit that sticks in my throat is how much the taxman taketh!!!!!
Having said that, I didn't pay tax on it going in and at some point you expect them to take there share anyway, but 20% is £8k, thats two really good holidays paid for!!!!

Altior

Indeed, however the full state pension alone isn't that far off the tax free allowance as it is (which is set not to be increased for 5 years), so you might not be able to realise it at all without paying some income tax. It depends on your sources of income outside of the sipp.