Lump sum advice
Discussion
So I have a small lump sum coming my way. Roughly about a 10th of my remaining mortgage.
My mortgage term is long roughly 25 years left. Myself and my partner can pay our mortgage and live on 1 salary. Up to now I’ve been focused on buying a house and getting it comfortable to live in. Now I’m hoping to take charge of my finances a bit more intelligently.
So I’m wondering, what would you do with such a lump sum. Put it in pension? I would soon have enough in my pension to have 30 percent deposit to buy a property.
Should I just buy some stocks/shares, the S+P?
Should I punt it off the mortgage? My fixed term is coming to an end soon. Current rate around 3 percent.
I know there’s no right answer but it’s not a situation I often find myself in so I’d like to make an informed decision that I won’t regret. I’ve often blown money on cars in the past and at this point I’m quite happy with my daily driver and weekend toy and while it may not be sensible I’ve not regretted it, it’s my outlet.
My mortgage is not a noose either, it’s roughly 1/5th of my net.
Look forward to hearing opinions and input. Something to help me make my own informed decision.
My mortgage term is long roughly 25 years left. Myself and my partner can pay our mortgage and live on 1 salary. Up to now I’ve been focused on buying a house and getting it comfortable to live in. Now I’m hoping to take charge of my finances a bit more intelligently.
So I’m wondering, what would you do with such a lump sum. Put it in pension? I would soon have enough in my pension to have 30 percent deposit to buy a property.
Should I just buy some stocks/shares, the S+P?
Should I punt it off the mortgage? My fixed term is coming to an end soon. Current rate around 3 percent.
I know there’s no right answer but it’s not a situation I often find myself in so I’d like to make an informed decision that I won’t regret. I’ve often blown money on cars in the past and at this point I’m quite happy with my daily driver and weekend toy and while it may not be sensible I’ve not regretted it, it’s my outlet.
My mortgage is not a noose either, it’s roughly 1/5th of my net.
Look forward to hearing opinions and input. Something to help me make my own informed decision.
Why are you looking to use your pension money to put a deposit on a commercial property ?
30% of what value ?
Will you be using and paying rent on the commercial property for your own business or renting out ?
Not advice but that doesn't sound that great of an idea if you are starting out getting your finances in order.
30% of what value ?
Will you be using and paying rent on the commercial property for your own business or renting out ?
Not advice but that doesn't sound that great of an idea if you are starting out getting your finances in order.
Dots said:
I would soon have enough in my pension to have 30 percent deposit to buy a property.
Unless you're over 55 that doesn't seem relevant as you can't get it out to spend.Things like your age, planned retirement age and some actual numbers would help. Do you have an emergency fund, for example?
Mr Trivial said:
Why are you looking to use your pension money to put a deposit on a commercial property ?
30% of what value ?
Will you be using and paying rent on the commercial property for your own business or renting out ?
Not advice but that doesn't sound that great of an idea if you are starting out getting your finances in order.
Instead of investing it via whatever financial instruments my pension would own a property which would be rented out.30% of what value ?
Will you be using and paying rent on the commercial property for your own business or renting out ?
Not advice but that doesn't sound that great of an idea if you are starting out getting your finances in order.
30% of the average home in my area which I believe is the required amount to buy a property through a pension. I would think residential is a safer bet for 100% occupancy.
I cannot get a lower rate when I remortgage either. Well not meaningfully lower.
Dots said:
Instead of investing it via whatever financial instruments my pension would own a property which would be rented out.
30% of the average home in my area which I believe is the required amount to buy a property through a pension. I would think residential is a safer bet for 100% occupancy.
I cannot get a lower rate when I remortgage either. Well not meaningfully lower.
I don't think you can invest directly (as in pension fund purchase) in residential property or if you can the cost outweighs any benefits. 30% of the average home in my area which I believe is the required amount to buy a property through a pension. I would think residential is a safer bet for 100% occupancy.
I cannot get a lower rate when I remortgage either. Well not meaningfully lower.
You can invest directly in commercial property through your pension.
In hindsight, the one thing I would have done differently is keep the mortgage, invest as much as possible in ISAs to use the annual allowance. This is so that when I got my pension lump sum then I would have used that to pay off the mortgage.
As it is, I now have equity in general investment accounts with CGT and dividend income tax. I will gradually put it into ISAs over the years.
As it is, I now have equity in general investment accounts with CGT and dividend income tax. I will gradually put it into ISAs over the years.
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