Investing a lump sum

Money Advice Service

Many people get a lump sum at some point in life – perhaps you’ve inherited a windfall, sold your home or have a tax-free sum from your pension. So how can you put it to good use?

Step 1 – Put your money in a savings account

Find a safe, accessible account where the money can earn interest while you do more research.

  • Make sure it’s easy access – you don’t know when you will want to move the money into longer term-investments.
  • If you have more than £85,000, split it between different banking groups – up to £85,000 per person in any one authorised firm is safe even if the firm collapses. This compensation limit applies per authorised firm, not by brand. Some banking brands are actually part of a single authorised firm. Check if any of your banks are part of the same authorised firm and make sure your combined balances don’t go over £85,000. Check bank brands on the FCA website.

Comparison websites are a good starting point for anyone trying to find a savings account tailored to their needs.

We recommend the following websites for comparing savings accounts:

Remember:

  • Comparison websites won’t all give you the same results, so make sure you use more than one site before making a decision.
  • It is also important to do some research into the type of product and features you need before making a purchase or changing supplier.
  • Find out more in our guide to comparison sites.

Step 2 – Do a money fact find

Complete our Money fact find to help you pin down what you need from your investments.

Sit down, fill it out, and get ready to make a plan.

Savings and investments have to be matched to your needs and goals.

Our money fact find questionnaire helps you pin down things like:

  • How your finances stand
  • The things you hope to achieve
  • How you feel about money and risk
  • What might be coming down the track in your life

It gives you (and any professional adviser you use) the right information to assess and choose suitable, affordable and sustainable investments.

Step 3 – Make your investment plan

Protect yourself

Avoid unsolicited investment offers.

Before investing check the FCA register and warning list.

If you’re considering an investment offer, seek impartial advice.

After completing the money fact find you can pinpoint the investments that suit your needs and Plan out how to use your money.

This is your savings and investments plan.

Compare different funds on the Investment Association website.

This article is provided by the Money Advice Service.

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