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What have you done with your lump sum?

Discussion in 'Retirement' started by misstippytoes, Nov 7, 2015.

  1. misstippytoes

    misstippytoes New commenter

    Good Morning out there,
    Just wondering, what everybody does or plans to do with their lump sum. Did you choose the larger monthly pension or the larger lump sum? If you decided on the larger lump sum, did you invest it? I'm just being nosey as I have to decide and, on the one hand I'd like more ready cash to spend (wouldn't we all?) and tie me over for the next five years; on the other hand though, as I plan to live till I'm over 100 years old (I want my moneys worth from state pension 'cos I've worked all my life!!) would I be better off having a reduced lump sum and larger monthly payement?

    I know at the end of the day, only I can decide what's best for me but, as I said earlier I'm just being nosey!
     
  2. carioco

    carioco New commenter

    Hi
    I think the answer is going to depend on your circumstances. I chose not to have the larger lump sum but to maximise the monthly payment. My reasons were mostly around the low returns on investments at the moment and the fact that a larger monthly payment means larger index linked increases.
    If you live to 100 I think its a no brainer to take the maximum monthly payment. Good luck
     
  3. lizziescat

    lizziescat Star commenter Forum guide

    The maximum monthly payment gives you security of knowing what you'll get when you're 96. Lump sum is gone, when it's gone. Also as above saving/investment returns are at best variable and atm poor. If you want to save you could always do this out of your income (don't see the point myself).
    I think your personal traits are important. I'm of the generation and discipline that you don't spend savings (but it's ok to spend income because that will be replaced next month) so having a lot in a savings/investment account just means that I would pass a lot on to my heirs.
     
    Lara mfl 05 likes this.
  4. lindenlea

    lindenlea Star commenter

    My husband and I both got good pensions and lump sums and we gave son2 a big wodge of that to help buy a flat. He paid 179,000 three years ago and it's now worth about 300,000. it also has made him feel secure and given him a lot of happiness. Absolutely the best thing we could have done. We have been very lucky in our career opportunities and have also been left some money so could give money away without harming our own future security.
     
    Lara mfl 05 and minnie me like this.
  5. Morninglover

    Morninglover Lead commenter

    As others have said it all depends on your circumstances. I took the maximum lump sum (rather have a bird in the hand etc. - and I don't trust governments not to suddenly tax them in future!) I invested some (Premium bonds, other 'safe' investments) and also helped one child buy their first flat.

    I am also spending some on various overseas trips! :D
     
  6. kittylion

    kittylion Established commenter

    I took the larger monthly payment and put most of my lump sum in an ISA and an savings bond. On advice, I kept a sum readily to hand in case I need to replace my ancient car - so far it is still struggling on <hastily touches wood>.
     
    Lara mfl 05 likes this.
  7. GLsghost

    GLsghost Star commenter

    I blew a large chunk of it on a luxury trip to the Galapagos Islands. Don't regret it for one moment!
     
    Dragonlady30, kittylion and FolkFan like this.
  8. lizziescat

    lizziescat Star commenter Forum guide

    Ohh GLs.
    That's on my list
     
  9. GLsghost

    GLsghost Star commenter

  10. misstippytoes

    misstippytoes New commenter

    Thank you everybody for replying. I must admit Folk fan, I do tend to be with you about 'a bird in the hand...'. I only have 15 years TP, so I know I will have to do a couple of days supply a week, if I can get it. Still, the fact that some of you spend it on long awaited holidays, makes me feel better about my reckless streak!!
     
  11. curlyk

    curlyk New commenter

    Put a bit of my lump sum away for a rainy day , had some vital work done to the house and then bought myself a fun car, a Mini Cooper Coupe.No grand children yet ,both sons comfortable and thought I would be a bit silly while I can be !
     
  12. emerald52

    emerald52 Star commenter

    Paid off the mortgage, bought a 6 month old car to replace my 17 year old one, gave a wodge to daughter to help buy her flat and banked the rest.
     
    plot71, kittylion and lindenlea like this.
  13. jacob

    jacob Lead commenter

    Bought a Lamborghini ....

    ... I wish!
     
    Lara mfl 05 likes this.
  14. scgf

    scgf New commenter

    I'm retiring at the end of December and will use my lump sum to pay off my mortgage - it will settle the mortgage with about £2,000 to spare which I'm going to use to clear a credit card. Having a house which costs me nothing in terms of rent/mortgage offers great security IMO.
     
  15. gymjack

    gymjack New commenter

    I invested the whole shabang in a couple of products from Wesleyan.
     
  16. Yoda-

    Yoda- Lead commenter

    For most teachers the lump sum may be the last large capital sum they get. My Father who is retired is of the opinion that some of this should be used for an emergency fund.
    Your retired income will be smaller than what you're used to. So don't expect to be able to ride out financial emergencies with your income or borrowing if that's what you've done in the past.
     
    Lara mfl 05, catmother and FolkFan like this.
  17. catmother

    catmother Lead commenter

    Sounds like a very sensible option.
     
    Lara mfl 05 likes this.
  18. Jolly_Roger1

    Jolly_Roger1 Star commenter

    I would be interested to know what you thought of their reps. Round here, they don't have a very good reputation for professionalism. ("What's it your after, luv? Pension or a fireplace?"). I wouldn't know from personal experience, as the rep who contacted us didn't turn up.
     
  19. catmother

    catmother Lead commenter

    I'd be terrified to lose the lump sum by investing it.
     
  20. TheoGriff

    TheoGriff Star commenter

    .

    Lump sum.

    1. Mortgage
    2. Premium Bonds - you can always hope, and can cash them in as necessary.
    3. Gift to progeny ;)

    'Bout the same as most people except the globe-trotter @GLsghost .

    ;) ;)

    Best wishes

    .
     
    bevdex likes this.

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