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I have recently received a lump sum from my pension after retirement. What should I do with it?

03 November 2021

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Question by Inma

I have received a pension lump sum since I recently retired. I will need to access the money in the near future. Please could I have your advice?


Answered by Oliver McDonald

Hi Inma,

Many thanks for your question.

Although I cannot provide advice with out knowing your circumstances in more detail, the information below will help.

It is always sensible to keep some funds in cash for emergencies. Although you will make little interest, the funds are accessible when required. Tying funds in for periods in cash accounts through banks etc will provide slightly higher returns. You may also wish to look at premium bonds, as these provide the opportunity for cash prizes each month, but no interest/investment returns.

If you are considering investing these funds, you should be looking at a 5 year period or longer. This allows for recovery from investment volatility. So, it depends how long you mean by 'the near future'. If this is within 1-2 years, cash/deposits might be best.

Investments generally provide a better return over the long-term, but you must accept some investment risk. Therefore a longer period of time is required to allow for the 'dips'.

Hope that help and feel free to get in touch if advice is required.

Oliver

*Information only, not advice.

Answered by

Oliver McDonald

Director & Independent Financial Adviser

I have worked in financial services for 15 years gaining extensive experience in financial planning. I am a people person. You will rarely find me explaining complex spreadsheets or using jargon. I keep my conversations at a high level and realised early on that financial planning is all about helping my clients achieve the lifestyle they want in future. I work with individuals, business owners and entrepreneurs. I specialise in retirement planning, investments and business protection.