What To Do With Large Lump Sum Of Money...

[Smowball]

Mr Smow and I are both in our 40's and for whatever reason neither of us have a pension. 6 yrs ago my mum sadly passed away and she left me quite a large sum of money ( well if is to me lol). We went to our bank and spoke to financial advisor who drew up portfolio and it's basically spread over high and low risk schemes plus 2 ISA's. We're now thinking is that the best way forward with it . In reality if we both became ill tomorrow and couldn't work then I doubt it would last 4/5 years. I don't mind saying the amount if it would help, but I'm just wondering if e should be doing something else with it?

[RandyMarsh]

Take proper financial advice from qualified people that know your circumstances.

[hc4361]

Your bank's financial adviser will only advise you on that bank's products. It may be worthwhile paying an independent financial adviser for advice.

Unless you are high tax payers, new ISA's aren't of any benefit unless you can transfer existing ISA's in to them.

Have you got a mortgage or debts?

[Old_Geezer]

Looks like you already sought advice and got it.
The better alternative is to put it all in an envelope and post it to me.

[Old_Geezer]

hc makes some good points. Interest you're paying is almost certain to be higher than interest you could earn. But I would hope the bank would have checked that.

[ubasses]

Since 2012 there has been a roll our programme where all employers have to have a Company Pension Scheme. So the first thing to do is find out if yours has started one, if you sign up to that your employer will also be making contributions increasing the fund quicker along with tax man's contribution. You may also have the option of paying in a lump sum.
It would certainly be a good idea to talk to an IFA, most Banks have one and the first appointment is usually no obligation and no fee. A good spread of pension, investments and cash is a good idea, you certainly should have an emergency fund in cash in case of need.
As hc says it is always a good idea to look at any debts and their interest rates as a priority.
I see ISA's as 'future proofing' if interest rates rise over the years it may not be long before you are paying tax on it again and in an ISA it is ring fenced.

[Smowball]

We are both self employed

[CrapAtCryptics]

Holidays are where the memories come from - the pittance you get for investing makes it hardly worth the effort - start on the bucket list and make the birthdays and anniversaries special.

[ubasses]

OK, a stakeholder pension has relatively lower charges and allows you more flexibility with contributions which you may need as self employed. You will still get the tax contribution. An IFA will help you find the most suitable.

[Khandro]

Bricks and mortar ?

[saintpeter48]

I agree with CrapAtCryptics, enjoy it while you can, get out and see the world, book a cruise or two, tour Australia and NZ, buy a holiday home somewhere, travel around the States etc etc. I certainly wouldn't leave it in a bank doing nothing and earning very little, it could all end tomorrow and someone else will get their hands on it. :)

[bookbinder]

When I retired (2004), I put £25,000 into an income bond. It pays me £104.00 a month, tax free. An income bond is/was available only via a financial adviser, not through a bank or a newspaper advertisement.

[Old_Geezer]

In your forties you probably don't need the income just yet.

Seems to me that just 5% pa net won't give you more than a small top up unless the amount invested is very large.

Can you find a way to put your vast inheritance into some kind of index linked pension or pension top-up to trigger at around the time you want to get out of the rat race ?

[Smowball]

It's not vast OG ( £100k) and yes we do have holidays etc but like has been said I'm sure it could be invested in something more worthwhile. It's not enough to buy a house where I live

[fiction-factory]

If you don't nee the money now then I suggest you do keep a fair amount back to when you can no longer keep working in maybe 20 years time (or earlier if health becomes a factor or the business dries up) - you may well have 30 years with no income other than the state pension. There are various accounts that pay 3% or so- not a fortune but your money will grow slightly in real terms and it may stop you spending it- and then you can draw down later. I would take pensions advice too but the tax advantages are not always as good as they first appear because at some point you may pay tax on it as pension income. If you plan carefully though you can get tax relief on contributions and make sure your pension income +state pension is just below teh tax threshold

[Smowball]

FF and everyone else thanks for all the in
It - food for thought.

[Khandro]

Smow,: // It's not enough to buy a house where I live//
Perhaps not, but you could make it a good deposit on something. 'Buy to let' seems to be the way to get rich nowadays, with the rent paying off the mortgage and it can be anywhere. Someone I know has now 3 flats in Canada and is in the process of buying one in Portugal all to act as a 'pension' for old age.

[Smowball]

Yeh I guess so...,,

[woofgang]

Be careful with products sold you by the bank. When DH retired we went and did loads of research. The banks products looked good until we realised that they would charge us for managing the money regardless of whether they increased the investment or not...so they could lose our money and charge us for the privilege. I would not dream od suggesting what you should do but you might want to look at M and G investments. We bunged money in there and did very well and they are helpful people.
This book is not new but I think its still valid and helpful
Amazon.co.uk User Recommendation

[jomifl]

Woofgang is dead right. I had a bank managed portfolio for 3 years at the end of which they had lost money.