What to do with an upcoming lump sum?

Gthyre said:
I just checked back through the documentation again after reading your last post and it does appear to allow for tax free growth:

"By legally assigning a Child Savings Plan to your child, your contributions count
as gifts to that child. Provided you stay within the Small Gifts Exemption limit,
the child will not incur any Gift Tax or have their threshold reduced, either when
you make the contributions or when the plan is encashed."

Link:
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That means they won’t pay gift tax but i would have thought something like exit tax or capital gains tax would be charged (i hope someone more knowledgeable can confirm)
 
Gthyre said:
In regard to our pensions, we are both already putting in as much as we can gain tax relief on. I don't see the point in putting anymore in on top of that if there are no tax savings on it.
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There are tax savings as the capital value is not subject to CGT and there is no deemed disposal.

I agree with @Peanuts that your consumption seems very low for a family of your size and age. Young kids are cheap if you don't have childcare but as they get older I think it's inevitable that you'll be spending more of your income than you do now.
 
noproblem said:
I'm in Prisma 4 and 3 more sort of similar ones for the past 7 years, I'm down aprox 12.5% since the beginning of the year. However the fund is still in positive territory overall, but going down. I'd also lioke to know if I should stick in there or pull out. Thing is, it's expensive to buy in again and where else do you put money? In your case you'd be buying in at a lowish price.
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im thinking of going into 3 with a fairly big sum. for the very reason of buying in at a low unit price. but will it go lower ? im slightly concerned about global negative sentiment . but as warren buffett used say...buy when the rest are selling..maybe..
 
Gthyre said:
Well to be precise, 500 for the monthly regular saver comes out of my take home pay while my wife is putting the other 500 into the 3rd level fund.

So we're not too bad :D. There's nothing we want for at present thankfully.

On the other hand, our kids are so young at the moment there's not actually that many places you can go with them, nor can we get out ourselves at night like we used to. It's not going to be forever either
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I'm confused by this. So does your wife have an income that you haven't mentioned above (maternity pay maybe?)

Like others have said, I'm not sure how a family of four live on 20k per annum. Kids are young but there's food, electricity, heating costs, car fuel, broadband, mobiles, car tax and insurance, house tax and insurance, Christmas, birthdays, clothes, haircuts, car and house maintenance and the like. Some achievement if that's the case...but also are you missing the point a little bit...life is for 'living' also and you can afford to live better than most given the comfortable financial situation you find yourself in.
 
goingforgold said:
I'm confused by this. So does your wife have an income that you haven't mentioned above (maternity pay maybe?)

Like others have said, I'm not sure how a family of four live on 20k per annum. Kids are young but there's food, electricity, heating costs, car fuel, broadband, mobiles, car tax and insurance, house tax and insurance, Christmas, birthdays, clothes, haircuts, car and house maintenance and the like. Some achievement if that's the case...but also are you missing the point a little bit...life is for 'living' also and you can afford to live better than most given the comfortable financial situation you find yourself in.
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At present my wife is on maternity leave and gets no extra income apart from the government social welfare payment. This lasts for 6 months if I recall correctly and she will be going back to work part-time after that.

As I have said in post number 1, she will probably be on about 30k gross at that point bringing our annual gross income up to 82k.

I don't know why you think we are getting by on 20k per annum? My take home pay is 2700 per month and I put in about 2000 into our household expenses. Over 12 months, and including child benefit payment, that adds up to 27k.

Once my wife is back earning again, she will also contribute to the household expenses and allow me to dial back a little on what I contribute.

Otherwise, I personally don't have any expensive personal habits or pastimes (at present). As I also said in an earlier post, when you have two kids under 2 you don't have a lot of time to spend on yourself.

I also understand kids will get more expensive as they get older, I don't expect my salary to remain stationary and hope that future increases in pay (for both parents) will help negate these expenses.

Finally, and with all due respect to people who have viewed and replied so far, I created this thread to get peoples thoughts on what to do with an upcoming lump sum. I would appreciate anyone elses thoughts on this point.
 
These 2 comments are not really compatible:
Gthyre said:
I guess we are looking for something medium to long term that will beat inflation at the very least...
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Gthyre said:
I'm not interested in gambling with shares but do accept that I need to accept some form of risk.
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Very difficult to beat inflation (especially current levels) without taking a risk.

Are you planning on any more children? Any big purchases coming up like replacing a car or installing solar panels?
 
Gthyre said:
At present my wife is on maternity leave and gets no extra income apart from the government social welfare payment. This lasts for 6 months if I recall correctly and she will be going back to work part-time after that.

As I have said in post number 1, she will probably be on about 30k gross at that point bringing our annual gross income up to 82k.

I don't know why you think we are getting by on 20k per annum? My take home pay is 2700 per month and I put in about 2000 into our household expenses. Over 12 months, and including child benefit payment, that adds up to 27k.

Once my wife is back earning again, she will also contribute to the household expenses and allow me to dial back a little on what I contribute.

Otherwise, I personally don't have any expensive personal habits or pastimes (at present). As I also said in an earlier post, when you have two kids under 2 you don't have a lot of time to spend on yourself.

I also understand kids will get more expensive as they get older, I don't expect my salary to remain stationary and hope that future increases in pay (for both parents) will help negate these expenses.

Finally, and with all due respect to people who have viewed and replied so far, I created this thread to get peoples thoughts on what to do with an upcoming lump sum. I would appreciate anyone elses thoughts on this point.
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Hi Gthyre, my calcualtion of 20k per annum came from you stating in your first post that your total income is 2700 per month and savings are 2 x 500 euro per month, hence living expenses of 1700 x 12 = 20,400.

You hadn't mentioned child benefit or your partner's maternity pay. Still, 27k per annum for a family of four is incredibly tight. Don't hold back on holidays and the fun stuff with the kids as they start to get older, they'll only be small once. But in meantime you and your wife can still have a life, weekends away etc. But this is a little off topic I know so enough said on that :)
 
arbitron said:
These 2 comments are not really compatible:


Very difficult to beat inflation (especially current levels) without taking a risk.

Are you planning on any more children? Any big purchases coming up like replacing a car or installing solar panels?
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Thanks. I know I'll have to take on some sort of risk but honestly have no interest in dealing directly with shares. In reality, I guess I'll have to talk with a financial advisor as my next step.

There are no more kids planned. We don't have any major purchases for the next 3 years either. But would like to get a campervan at some point, that's the biggest thing I can see on the horizon.

Our house is 3 years old and our car is 2 years old so hopefully they don't cause maintenance issues over the next few years. If they do, we have 40k set aside for the likes of this
 
NoRegretsCoyote said:
You and wife should both maximise tax-relieved pension contributions and put it into all equities.


This is fine but you are exposed to tax in a way that you aren't if you put it in pensions. I would keep an all-cash emergency fund and prioritise pensions instead. Cash is good if you are saving to trade up or buy a car but otherwise spare wealth should be in a pension.


Again am not sure what the objective is here. You will still have an income when your children are in third level. It makes more sense to prioritise pension now and then deprioritise it in 15-20 years time to fund your kids' third level if needed. The pension is tax free on the way in, tax free on capital gains, and (depending on the scheme) you may be able to withdraw 25% tax free as young as 50.
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Hi NoRegretsCoyote. How do you choose 'all equites' when making pension contributions?? thanks
 
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