SIPP lump sum or regular invest

masonic

You can invest money when it is available and pound cost average. There isn't any need to hold money back. Unless you think this is the only profit your limited company will make. By investing money as it becomes available you get the best of both worlds.

dannybbb

there is 40k available now and mindful of getting it in before the tax year but just came across some reading that warned against lumpsums hence my question

dunstonh

dannybbb said:

there is 40k available now and mindful of getting it in before the tax year but just came across some reading that warned against lumpsums hence my question

Why would someone warn you against lump sums when it is statistically the better option most of the time?

In reality, what many company directors do it pay a base amount monthly but then top up once a year near the business year-end once they are confident of their profits and there is no call on that money. 

masonic

dannybbb said:

there is 40k available now and mindful of getting it in before the tax year but just came across some reading that warned against lumpsums hence my question

I think you or they are conflating a lump sum with a one off investment. 

I pay a lump sum into my S&S ISA every April, but this forms a regular pattern of contributions.

EthicsGradient

dunstonh said:

dannybbb said:

there is 40k available now and mindful of getting it in before the tax year but just came across some reading that warned against lumpsums hence my question

Why would someone warn you against lump sums when it is statistically the better option most of the time?

In reality, what many company directors do it pay a base amount monthly but then top up once a year near the business year-end once they are confident of their profits and there is no call on that money. 

Because it's a one-off transaction, and it might not work out for the best. Statistically, it's better to run a roulette wheel than to hold your cash, but that doesn't mean everyone would want to do it for just one turn, with a substantial amount of their money at stake.

masonic

EthicsGradient said:

Statistically, it's better to run a roulette wheel than to hold your cash, but that doesn't mean everyone would want to do it for just one turn, with a substantial amount of their money at stake.

Not at any casino that wishes to stay in business. The gambling industry depends on the house having the statistical advantage. Statistically it is better to keep your money in your pocket.

Edit: I suppose by "run" you mean be the casino rather than spin the wheel. In which case the difference between that and investing is that that the outcome of investing over decades isn't dependent on a single event.

Hopefully this is not the first money being put towards the OP's retirement, and he's mentioned a further ~£60k being added next year, so doesn't seem like a one-off thing.

dannybbb

@masonic yes its the first investment into a pension although i do own a second property, as in i have another source of income but im keen to take advantage of tax savings and get some cash into my sipp, i could see the logic in lots of cash going in on one day being more risky but i am where i am and  i suppose the tax savings will help mitigate potential losses if the worst were to happen

dannybbb

EthicsGradient said:

dunstonh said:

dannybbb said:

there is 40k available now and mindful of getting it in before the tax year but just came across some reading that warned against lumpsums hence my question

Why would someone warn you against lump sums when it is statistically the better option most of the time?

In reality, what many company directors do it pay a base amount monthly but then top up once a year near the business year-end once they are confident of their profits and there is no call on that money. 

Because it's a one-off transaction, and it might not work out for the best. Statistically, it's better to run a roulette wheel than to hold your cash, but that doesn't mean everyone would want to do it for just one turn, with a substantial amount of their money at stake.

this is fundamentally my concern but also aware it may not be an issue over the long term just wanted to hear opinions

masonic

dannybbb said:

@masonic yes its the first investment into a pension although i do own a second property, as in i have another source of income but im keen to take advantage of tax savings and get some cash into my sipp, i could see the logic in lots of cash going in on one day being more risky but i am where i am and  i suppose the tax savings will help mitigate potential losses if the worst were to happen

Even if you spread it, the worst can happen just after you finish doing so. It is the nature of investing that a crash is always coming.

boingy

dannybbb said:

 just wanted to hear opinions

And you got both opinions! Take yer pick...