What to do after selling flat and with salary. . .

debthelp1

Situation as follows for my current partner

Salary: £105,000

Just exchanged on selling a property so will have approx £150k left after settling all credit cards and loans and a holiday etc.

Own a main house and mortgage is just over £2.5k pm. 

She has £19k in a pension at the moment so is paying 40% tax. Seems better to put a fair whack in a pension if it helps her tax situation? Pensions scare me as may not reach the age of 67 and the penalties involved if you take early are big aren't they?

What to do with the that £150k cash? Can you have more than one ISA so for example 20k in a regular one and 20k in a sticks and shares one? HAs no ISA at the moment so can you max one out now and then again after April 5th?

Max out premium bonds and hope for a win?!

Not interested in investing in property at the moment. 

Thanks in advance!

Flugelhorn

only one 20K per year in an ISA - you can max one now and one in April.

Sam_666

Yup, pension is best first investment. Use it through employer for nice free cash.
Check info on last 3 years pension carry-over, could be useful.
You can find tons of info about isa on web.
Yeah, could stash a bit in P bonds, but rates are not that competitive.

kempiejon

This is for a future, potential non-current partner then. No mixing assets.

£100k salary, seems a missed opportunity not to rebate/defer some of that 40% back into a defined contribution scheme. Age is a factor with access to pensions currently accesible from 57 years old from April 2028. Not a product to be scared of, a useful bit of tax planning and "free" money. No penalty. just no early access.
£150k needing a home to minimise tax are ISAs (£20k this tax year, £20k after April, new tax year), premium bonds £50k, low coupon short dated UK gilts unlimited, pensions capped at relevant earnings. Cash is excellent at buying things but will not accumulate. A mortgage at £2.5k per month could be reduced.

Invested, there's a few options, £150k could double in 10 to 15 years, or give an extra income of £7k for the next 20 years. Dividend tax is currently lower than income tax

Albermarle

Pensions scare me as may not reach the age of 67 and the penalties involved if you take early are big aren't they?
The current state pension is payable at 67, but other pensions are available from 57. Obviously the earlier you start to withdraw from a pension it will give a lower income than if you leave it to later.
40% tax relief on contributions for a 40% taxpayer is very generous, so fill your boots.
Also you will most likely live a lot longer than you think.

Two classic mistakes people make when thinking about retirement.

1) They greatly underestimate how much money they will need to fund a decent retirement.
2) They underestimate how long they are likely to live.