Proceeds from sale of BTL

GlasgowExpat2

I’m in the process of selling my BTL flat. The net profit after fees and CGT will be approximately £150,000. I’m almost 60, single, no dependants, earning £32k a year, £90k in savings. 

Looking to retire in April 2026. I have two DB pensions (£12k) which I can access at 65. I’m planning to max out my pension contributions this year and next and put £20k in an ISA in April but don’t know what to do with the rest. 

eskbanker

How much do you anticipate needing to live on over the three periods, i.e. between April 2026 and your 65th, then until your state pension age, and thereafter?

Have you obtained a forecast of your state pension and if so, is it as much as it can be?

GlasgowExpat2

eskbanker said:

How much do you anticipate needing to live on over the three periods, i.e. between April 2026 and your 65th, then until your state pension age, and thereafter?

Have you obtained a forecast of your state pension and if so, is it as much as it can be?

Approximately £20k per year

State pension forecast is £11,541.90

i’ve also got approximately £30k in a DC pension scheme 

eskbanker

Sounds like you need to be accessing £20K/year for three years, then £8.5K/year for two, and then after 67 you'll have enough income without drawing on savings?

In which case, you could potentially look at a ladder of some money in easy access savings, some locked away in fixed term accounts, and potentially some invested for longer term growth?  Premium bonds are also an option for some, with their tax-free, but unpredictable, returns....

GlasgowExpat2

I was thinking of taking lump sum payments from my DC scheme and topping up with savings. I’ve already exceed the £1k personal savings allowance so was going to put some funds into 2 and 3 year fixed rate bonds. Once I retire can I still put £3600 into a pension?

eskbanker

GlasgowExpat2 said:

i’ve also got approximately £30k in a DC pension scheme 

GlasgowExpat2 said:

I was thinking of taking lump sum payments from my DC scheme and topping up with savings.

I'd missed your edit about the DC pension and agree, yes, it's likely to be worth drawing down from that so as to use up your personal allowance every year in between employment and DB pension payment.

GlasgowExpat2 said:

I’ve already exceed the £1k personal savings allowance so was going to put some funds into 2 and 3 year fixed rate bonds.

Yes, deferring the tax until post-employment years ought to optimise returns.

GlasgowExpat2 said:

Once I retire can I still put £3600 into a pension?

Yes, up to 75 I think, by paying in up to £2880 net, which the provider grosses up to the £3600.