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Pension lump sum - what to do with it

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Trouble Tue 14-Oct-25 21:07:50

Husband is about to take his pension on turning 66 and will buy an annuity and take his lump sum. The lump will be around £35k. This will also be the total sum of his savings and needs to pay for any infrequent or major outgoings in old age. He won't need to touch it for a while.

He will put £20k into a cash isa while he thinks about what to do with it and the rest in a savings account. Ideally would like it to keep up with inflation.

Is there a normal approach to take here?

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Basgetti Thu 08-Oct-26 14:15:45

Rest can go in an isa in your name.

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Oreo Thu 08-Oct-26 15:34:16

Basgetti

Rest can go in an isa in your name.

Yes.
An ISA each maybe for a fixed two year period.That way, if you need to take out some money early you can still get it but lose some of the interest.
You never know when you may need some cash, a car, a private operation and so on.

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keepcalmandcavachon Thu 08-Oct-26 17:41:01

The only thing that will give you a better return than an ISA is a little clutch of resue dogs x

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mokryna Thu 08-Oct-26 17:53:25

When I took a lump sum, as I hadn’t drawn on my pension for 10 years, the tax people wanted to tax me on the whole sum and they did.
However, after many phone calls, over many months, I presume I got to near the top person, it was refunded, just before COVID.

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