The lump sum you get when you retire is a fairly substantial amount of money - and it’s tax-free*. You should make that money work for you as soon as you get it.
*(Please note - if your employer has awarded you Compensatory Added Years the lump sum arising from them could be liable to a tax charge)
There’s a lot you can do with a lump-sum payment, and it’s something which needs careful thought. But while you’re thinking about it, that money could be earning you interest, so before you do anything, talk to your bank or building society about putting it in a savings or deposit account.
Investing for the future
Now you’ve got time to think about how best to use the lump sum. It’s possible that - if you invest wisely - not only can you keep all the capital intact, but it can earn an income for you.
Before making any investment you should seek professional advice. Members of the Local Government Pension Scheme are eligible for free independent financial advice and you are strongly advised to take this.
You can also get investment advice from your bank manager, lawyer, accountant, insurance broker or building society manager.
You should contact your local Citizens’ Advice Bureau for details of other advisors.
If you find an advisor yourself, remember to check their credentials. The Citizens’ Advice Bureau should again be able to help you do this. Never let anyone pressure you into making an investment, and it’s always a good idea to have a trusted independent professional check out investments for you.
More information
You can download A Guide to the Local Government Pension Scheme, with full details of all the features and how to take advantage of them, to print out and read when you want. If you would rather receive a copy by post, contact us.
If you’ve got further questions, visit the pensioner member frequently asked questions page of this site.