Advice re lump sum and what to do with it

[angryformoreadon]

I retired 2 years ago . Am managing so far to live on my pension. I do not qualify for state pension for another 4 years.
My house is paid for but will likely need things doing to it in the near future.
I just wondered if my savings with my lump sum are in the best place?
I have 50K in premium bonds but hardly any wins in the past year.
I have a stocks and shares ISA with nutmeg which I've had for several years that has done very badly has only just increased by £450 total investment was 16400
I have savings in a Zopa account of 43k interest rate is 4.4 I have given notice on this as was going to try for a better rate but may have missed the boat now.
That's pretty much it.
Should I have more ISAs ?
Any advice very welcome.

Unless you are paying 40% tax you don't necessarily need more ISAs. Having said that some offer good rates.
4.4% in ZOPA isn't bad now that rates have gone down.
Premium bonds are a good choice if you are a higher rate tax payer but you could do much better if not.
Look at your bank, can you get a good rate on a monthly saver? Many offer quite high rates albeit there's a maximum of £250 to £300 a month. Example First Direct 7% fixed.
Fix if you can as interest rates are slowly going down.
You could move your S&S ISA. Mine are in Vanguard, others may be better.
Look at MSE for details of the best savings rates

I've just left my lump sum in a Nationwide account and it gets about 2K interest per year.
I'm happy with that. I've been caught out with investments by a financial advisor in the past so am very risk averse.

I would have a look at AJBell investment platform. They have all sorts of ideas for all sorts of investors from risk-averse to adventurous. Disclosure- I have my SIPP with them

Thankyou!! I guess the premium bonds are more of a living in hope thing but obviously that's not sensible x
Yes I'll look at first direct I have an account with them
And I'll check out your other suggestions
I felt I didn't have enough fir a financial advisor

I just checked my Nutmeg S&S ISA and it’s fine up 10.78% in 7 months and my Fidelity ones slightly less. I would change ISA’s or change what it’s invested in.

Could you put the 50 k in a savings account? I have a lump sum with Halifax at 3.07 interest rate, you can make 4 withdrawals per year with no penalties .

That would be 1850.00 extra a year, especially if you are not winning on premium bonds.

A Moneybox account is an option, their rates are always high.

I am surprised you do not get much on PB .... mine make a really good rare. Full holding and over £150 most months.

You are lucky.
DH and I and DS had the full holdings each and we averaged £10 a month between us. DS moved his to ISAs eventually.

DH and I and DS had the full holdings each and we averaged £10 a month between us. DS moved his to ISAs eventually.

Good for him, if he gets 4% interest it’s 2k as opposed to less than £100 per year.

I had £400 this month and last month, £150 the month before. This is fairly normal for me.

@Mischance That's well above the expected average. You should do the lottery!

Good idea!

One of the other reasons that I leave my money in PB is that it is hassle free - no tax returns needed, no jiggling around from one ISA to another, no tax - and a tiny frisson that I might hit the jackpot one day!

I'd look at cash ISAs to get the benefit of interest being tax free. Rates have gone down but shop around to get over 4% on fixed rates.

What's your tax position? If you have the extra tax-free allowance on savings because your income is under £17k, that will probably be wiped out when you get your state pension, so prepare ahead and move some money to ISAs.

I assume you're early 60s. Personally I wouldn't invest more in stocks and shares as the value is volatile. I've experienced S&S ISAs being worth less than I invested for several years, so I'd prefer certainty in later life.

Life expectancy for a woman in her early 60s will be over 20 years (I'm late 50s and mine is 93) so being that age is not necessarily a reason to avoid stocks & shares. It depends on personal circumstances and attitude to risk. I suggest Googling 'Meaningful Money' - lots of easy to understand videos and podcasts about finances.

Thankyou all you all so much for the advice. Yes I'm 62, so no state pension for another few years.
My pension currently is about 16K per year so I easily manage on that and even save a bit for grandchildren etc.
I do like having the premium bonds just in case!!

Trading 212 is paying 5.17% AER on its Cash ISA savings, and interest is added daily.

Life expectancy for a woman in her early 60s will be over 20 years (I'm late 50s and mine is 93) so being that age is not necessarily a reason to avoid stocks & shares. It depends on personal circumstances and attitude to risk.

Firstly, life expectancy isn't a guarantee of how long any individual person is going to live.

Secondly, in later life you need to consider how long you're likely to be in good health and active enough to benefit from spending money on holidays, activities, car etc. You might live to be 90 but your jetsetting and partying days are most likely to be over far before then. So front load the expensive fun stuff into your 60s, which is why I wouldn't invest more in S&S at that age as I'd likely want to spend it in the next few years.

If you have so much money that you can live the high life on liquid assets and can afford to earmark investments for possible future care costs or leaving as inheritance (ie you don't need to care whether it fluctuates in value), then fine. But it sounds like OP has £100k, of which £86k is cash and some of which she'll want to spend in the coming years.

Personally I wouldn't put more into S&S, I'd be planning ways to spend it!

I used to think Premium Bonds were just a bit of fun, a gamble, not a proper investment. However, I recently listened to Martin Lewis explaining why that isn't necessarily so.

If you like the idea of Premium Bonds, you could do well to put your money there... if you put quite a lot in. The more you put in, the closer it gets to a proper investment from which you can reasonably expect to earn something close to the headline rate.

By contrast, if you only have a small amount in Premium Bonds, chances are you will win nothing at all. Have a quick watch of the video here (which is out of date and based on lower interest rates - but the principle is the same). https://www.moneysavingexpert.com/savings/premium-bonds/

He did a more recent video or podcast (I forget which, and also where I found it), but it's basically the same idea, only with today's rates.

Yup ... my £50k of premium bonds make me a steady income. As much as any other safe tax free investment with no hassle and the added frisson of the possibility of a bg win.

Thankyou all fir the advice