What would you do with £65k

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This is the situation.

I live in an absolutely dream home .. makes me happy every day.. but I don't own it . I pay £1k in rent (3 beds but Uni kids /renting kids come home every 3-4 weeks) my landlords are the type renters would dream of... anything wrong is fixed immediately... been here 7 years.

I can take retirement next month. Lump sum is 70k but to have that o need to reduce my hours. To qualify I need to go from £43k to £31k..

My current expenses are £237 on my car . (6.8k owing) £220 on Dd3 car (£6800 owing ) £190 on credit cards (£2300 owing to clear)

Am I right in thinking that my best bet is to pay off expensive credit ? I think I am but need reassuring. As I see it I will have that amount to add to my very poor disposable income and can put a large amount into savings instead ?

Just to be clear - once I retire my pension plus my income equate to pretty much my income of £2200 now.

Am I smart to pat these off ?

Just need to add .. never had any savings before.. lived pay heck to pay check .. really poor credit restored as had to prioritise bills and sometimes not pay some as kids father skipped off abroad so no maintenance since youngest was 4 years old.

Yes pay the debts off, but (without wanting to be too mean!) why are you including paying off your DDs car?

In your situation (no assets but a fair bit of cash and heading into a modest income on retirement) I'd look at shared ownership. I'd contact council and all housing providers to see what they've got with at least two ideally three bedrooms where the amount you're putting down with your lump sum minus £5k to pay off a chunk of debt would enable you to keep the property on a fixed income.

Your landlord is lovely now but you need a landlord who isn't going to raise your rent or evict you for at least the next fifteen years.

If you can keep your housing costs the same as they are now which you're covering with your income that will protect you long term. You are really really unlikely to be able to do that renting privately.

Yes pay off debts and have a nice holiday 😊 put the rest into savings with high interest

Yes to debts and a big holiday. But also can't you use some of it to get a deposit on a place of your own? Your uni age kids can fend for themselves now, so even a 1 bed would be better than renting. You have a good pension so I'm sure you'd get a mortgage. It seems insane to keep paying someone else's mortgage. Shared ownership would be a good option any give you security.

My mind is boggling at having such fancy cars but not owning a home

Can you sell the cars and get cheap and cheerful cars to replace them and get your finances on a sounder footing?.

You have no guarantee that your landlord is still going to renting out that house in 5 years.

Personally I like the security of owning. Could you get the DC to pay off their cars and look at buying in a low cost of living area? There are places in the UK that would buy you a house outright.

You haven’t said hold old you will be so if it’s not the state pension age, it might be worth buying and continuing to work for a few years.

Have you run calculations on what life is going to look like after retirement financially and whether you should be taking the 25%? If you are going to continue to rent make sure you factor in enough for rental increased and moving costs.

DC pay off own debt

You pay off your car debt

Transfer credit card to 0% as many times as is needed until cleared

Purchase some sort of property

Thanks everyone. I would love nothing more than to buy my own place. I lost our home in my divorce 17 years ago and have never been able to buy again as have never been able to save anything until the last 18 months. A £1000 in rent and 3 kids does not equal an ability to save a deposit. Now I have a lump sum I am too old for a mortgage.

If anyone knows a provider that will give a 60yr old a mortgage then I am all ears. As far as I have seen - the only mortgages on offer are for people wanting to remortgage/equity release who already own.

Cars. These are very recent. Until last year we had one 10 year old Nissan Micra. However we are exceptionally rural (nearest village shop 5 miles) supermarket 7 miles. We do a lot of mileage and the roads are horrendous with potholes you could get lost in for weeks 😩. It was beginning to cost and average of £800 a year to maintain a car with £125k on the clock.

DD3s car is my car. She uses it to get to and from Uni and around while she is home. It is impractical to have only one car here. It would mean me having to ferry her around which would be impossible as we work different hours and use up all my time.

It is also a available for my other two when they are home. It is a 3 year old small car with low mileage and low maintenance costs. As is mine. A cheap run around is fine if you do 5-10k miles a year . We do closer to 25k.

I'm 60.
I will continue to work until 67.
I will continue to pay into a new career average pension.
My work is three days a week. Where I do compressed hours. 3x9. My main pension that is payable from 60 requires that my new total monthly income from pension and salary does not exceed my monthly salary prior to retirement.

The only way to access lump sum to pay off credit is to semi retire . I have reduced my hours to the maximum allowed.

Could you defer your pension and keep working at your current age? Some pensions increase in value if you don’t take them.
Keep paying off the debt as before and you will end up with significantly more income later in retirement? Once you stop working altogether at 68 will your pension plus state pension be enough to pay rent along with other costs? If not you would probably be better not taking the lump sum and having a larger income.

Have a look at this article. With a good deposit and a secure income, you might be able to get a mortgage if you can live somewhere where house prices are more reasonable.

www.comparethemarket.com/mortgages/content/mortgages-for-over-50s/

Clydesdale Bank. My parents have a mortgage with them taken out last year when they were both 74. It's for £185k and goes on till they are 100. It is based on their pension income.

Op I wouldn't take early retirement to pay off debts without a long term plan. Hoping that £22k a year will cover all expenses including rent in retirement sounds a bit precarious.

I think you need to talk to a financial adviser and as I suggested your local housing providers. If your lump sum is whatever you need to buy even a 30% stake in a shared ownership property then you may be able to cover the rent with your income on retirement. It wouldn't mean a mortgage but it would mean long term housing security.

I agree. I would strongly recommend doing some good financial research/getting some advice.

And perhaps it is worth considering moving somewhere less rural so you are not dependent on expensive cars? I really don't think you need to spend that amount, I think you have convinced yourself that you do, and it's all those "needs" that make it hard to realise the other things you could do with that money.

Don't take early pension because you'll need it for when you actually retire. Get some financial advice and have a look on money saving expert.

Have a look at your budget, see where you can make savings and over pay on debts with the money saved. Ask the children who are living with you to contribute more towards their own living expenses.

I point in deferring it was closed in 2022. (Final salary)

Would this be early retirement? I have to be honest I don't think I'd retire early if I had expenses like yours - I'd try and carry on.

Definitely worth exploring mortgages for some security when you get older. You'd not need potentially such a large home when the kids are older and have their own homes and don't stay as much.

Deferred pensions would still be revalued - and assuming you have been paying into a new scheme?

Has it been reduced because you are taking it early or are you at the scheme retirement age?

I haven't been clear .

I am in two pensions. One is final salary with lump sum. Closed in April 2022. (I was pushed out in 2018 illegally (Mcloud remedy) and will be readjusted in October this year . I cannot access lump sum without partial retirement. So have retired to the maximum number of hours still considered to be a partial retirement. (Reduced full time hours from 36 to 27. )

I will continue to work and will have the same income as full time with final salary pension and salary. There is no point in deferring as it is now closed. The lump sum will not increase. Thought it better to have it in my bank/investments rather than theirs.

I have a lot of credit expenses. I thought that logically it is more financially prudent to pay off all credit with lump sum (£15k) which I pay high interest on and free up nearly £700 a month that I can then save.

At 67 when I fully retire, I will have £223 per week state pension and £6k in this new career average pension. Assuming no salary increase. Any increase will be a bonus.

Not prepared to move at the moment. I am a country lover and there are v few country rentals under 2.5k. Living on any form of street with neighbours and lack of greenery would seriously deplete my quality of life. LL would sell this but I don't have £500k. ! My view is my happiness... and worth £1k to me.

When DD graduates they will share the rent with me. £700 & £300 respectively.

Interested that some people think a 3 year old VW and a 3 year old and 4 year old Toyota Aygo are 'expensive cars' .. old cars are expensive to maintain and run.

Don’t forget, OP will also receive her state pension in 7 years - an additional £10k pa

But op is reliant on landlord not putting the rent up/deciding they want the property for something else.

I would want secure housing going forwards as a priority.

I would get financial and mortgage advice to find out the best way of making that happen.

Of course I can't know if that would happen. But it has t happened in 7 years, they live next door . (About quarter of a mile away but my house is on the land of their home) They are very wealthy and very kind. We are good friends. To them it is more important to have a good steady rent with a tenant who understands country living - than one who moans if we have a power cut /can't get to the shops because of snow etc.. but pays more.

I also don't moan about every little thing. If the boiler breaks down I fix it myself. If possible. I'm very practical. I keep it looking good, maintain the garden and appreciate I have a beautiful home at a much reduced price.

There will come a time when I will have to move . They are older and may die before me. Then things will change . As this house will be part of their house sale. But hopefully not for 10-15 years yet . Then I will have to move but parents are in their mid 80s and I will almost certainly inherit their home with my 3 brothers. Thankfully at present they are fit and well. So that is hopefully a way away yet.

Please don’t base future plans on a potential inheritance.