I'm 61, recently retired and took a £69,000 lump sum - a chunk needs to go on home improvements, where should I invest the rest?

I'm 61, recently retired and took £69,000 as a lump sum from a pension pot. 

I need to access around £40,000 to £50,000 of it over the next year or so for home improvements and the rest could be a long-term investment. What should I do?

Separate cash into savings and investments

James Norton, head of retirement and investments, Vanguard said: The first thing I'd do is separate the money based on when it will be needed. 

If you know you'll need £40,000 to £50,000 within the next ten months for home improvements, that portion should generally not be exposed to stock market ups and downs.

The priority for money needed in the short term is preserving its value and ensuring it is accessible when you need it. 

I'd consider holding that money in a competitive savings account or, where available through retail investment platforms, a money market fund, which can offer access to cash within days while potentially providing a higher return than some instant-access savings accounts.

>> Here are the latest best buy savings rates in the independent This is Money tables. 

Ask an expert: A This is Money reader has retired and wants to know how to invest £69,000

That still leaves around £20,000 to £30,000 that could potentially be invested for the longer term. 

Given you've only recently retired, it's important to think carefully about your future income needs, emergency savings and other assets before deciding how much risk to take. 

However, if this money is intended to remain invested for many years, a stocks and shares Isa could be an attractive option because any growth and income are sheltered from tax.

With a £20,000 annual Isa allowance, I'd look to use as much of that allowance as possible. 

Any money above the Isa limit could initially be held in a general investment account and transferred into an Isa in a future tax year.

Investing doesn't need to be complicated. For someone starting out, a diversified multi-asset fund that combines shares and bonds can provide a simple, balanced approach, with the mix chosen according to the level of risk they're comfortable taking.

Broadly, there are three routes available. The first is to choose investments yourself using information from provider websites and other resources. 

The second is to use a targeted support service that asks a series of questions to help identify an appropriate level of risk and suggest suitable investments. 

The third is to use a managed service, where professionals manage the portfolio on your behalf. 

While this option typically costs a little more, many investors value the convenience and support it provides, and costs are often around 0.5 per cent per year.

Most importantly, start with your goals, keep costs low, maintain a diversified portfolio and avoid taking unnecessary risk with money you'll need in the near future.

In short, keep the money you'll need for home improvements in cash, but make the rest work harder for your future through a diversified Isa investment.

Multi-asset funds perfect for novice investors

Charlene Young, head of technical at AJ Bell said: As you've noted, anything you're going to need in the next year should not be invested, which means the £40,000 or more that you'd like to put towards home improvements should be placed in easy access accounts. 

While investment markets are the best way to grow your money and beat inflation over the long term, less than a year gives you no space to recover if markets move against you in the early weeks. 

The remaining £19,000 to £29,000 could be considered for longer-term investment, provided you already have a separate emergency cash reserve and will not need the money for at least five years.

When you're getting started, it's wise to make sure you're investing tax efficiently and keeping costs low. 

This is where an Isa (short for individual savings account) can help. Everyone gets up to £20,000 to spread across Isas each tax year, with the stocks and shares Isa flavour helping you to shelter investments from income and capital gains taxes over the long term, meaning you keep more of your returns.

Charlene Young suggests looking funds when investing in Stocks and Shares 

Within the Isa tax shelter, you'll need to pick what to invest in. 

For newer investors, a good place to start is with a fund, rather than trying to pick individual stocks. 

Funds come in all different shapes and sizes, with different aims, underlying investments and managers. 

You can leave it to a professional to choose what makes it into the line-up and what doesn't, known as active management, but you'll pay a higher fee for this than a passive fund, which aims to track an underlying index, giving exposure to all the companies in that index.

Examples of low-cost global tracker funds which mimic the performance of a broad global index are Fidelity Index World, which has a low annual cost of 0.12 per cent and HSBC FTSE All-World Index which has an annual cost of 0.13 per cent. 

While the costs are similar, there are differences between these two options, with the first tracking an index of global developed markets, and the second investing across both developed and emerging markets.

Multi-asset funds also offer a hands-off approach. These ready-made funds spread your money between different countries' stock markets and a range of different investment types and usually come with handy labels to help you match your risk appetite. 

For example, an 'adventurous' fund will have a higher weighting to shares (usually 80 per cent and above) with less in bonds, cash and other alternatives like gold compared to a 'cautious' one. 

The most well known examples are the Vanguard LifeStrategy range, although most investment platforms that offer a Stocks and Shares Isa will also have their own in-house, low-cost options available.

Understand the risks to make an informed choice

Jon Styles, of the Money and Pensions Service, said: If you expect to need money within the next ten months, you may want to consider keeping it somewhere easily accessible, such as an easy-access savings account or cash Isa. 

This avoids exposing the money to investment risk and online comparison sites can help you compare interest rates to find the right option that suits your individual circumstances.

Before investing any remaining money, it's important to keep an accessible emergency savings buffer for unexpected costs, such as a replacement boiler or car repairs. 

The amount you need will depend on your regular outgoings and personal circumstances, but it should be separate from money already set aside for the home improvements.

Investing is generally more suitable for money that you will not need for at least five years. 

For the remaining amount, a stocks and shares Isa could be one option to explore, depending on your goals, wider financial circumstances and how comfortable you would be if the value of your investments fell. 

This allows you the opportunity to not only grow your investment over time, but save up to £20,000 a year before being taxed.

While investing can help grow your money over the long term, it's important to understand that returns are never guaranteed and you could get back less than you put in. 

Taking time to understand the risks, charges and different investment options available can help you make informed choices.

If you decide to invest, spreading your money across different types of investments could help reduce the impact if one performs poorly. 

Be wary of putting a large amount into a single investment, particularly something you do not fully understand. 

As this is a significant sum and you are investing for the first time, you may wish to consider speaking to a regulated financial adviser, who can make recommendations based on your retirement income, tax position, goals and attitude to risk.

You should also be wary of investment scams and check that any provider you use is authorised by the Financial Conduct Authority.

Compare the best DIY investing platforms

Investing online is simple, cheap and can be done from your computer, tablet or phone at a time and place that suits you.

When it comes to choosing a DIY investing platform, stocks & shares Isa, self invested personal pension, or a general investing account, the range of options might seem overwhelming. 

> This is Money's full guide to the best investing platforms 

Every provider has a slightly different offering, charging more or less for trading or holding shares and giving access to a different range of stocks, funds and investment trusts. 

When weighing up the right one for you, it's important to to look at the service that it offers, along with administration charges and dealing fees, plus any other extra costs.

We highlight the main players in the table below but would advise doing your own research and considering the points in our full guide to the best investment accounts.

Platforms featured below are independently selected by This is Money’s specialist journalists. If you open an account using links which have an asterisk, This is Money will earn an affiliate commission. We do not allow this to affect our editorial independence. 

DIY INVESTING PLATFORMS

	Admin charge	Charges notes	Fund dealing	Share, trust, ETF dealing	Regular investing	Dividend reinvestment
AJ Bell*	0.25%	Max £3.50 per month for shares, trusts, ETFs (£10 cap in Sipp).	£1.50	£5	Free	£1.50 per deal	More details
Bestinvest	0.40% (0.2% for ready made portfolios)	Account fee cut to 0.2% for ready made investments.	Free	£4.95	Free for funds	Free for income funds	More details
Charles Stanley Direct*	0.30%	Min platform fee of £60, max of £600. £100 back in free trades per year.	£4	£10	Free for funds	n/a	More details
Etoro*	Free	Stocks, investment trusts and ETFs. Limited Isa, no Sipp.	Not available	Free	n/a	n/a	More details
Fidelity*	0.35% on funds	£7.50 per month up to £25,000 or 0.35% with regular savings plan.	Free	£7.50	Free funds £1.50 shares, trusts ETFs	£1.50	More details
Freetrade*	Free (paid plans give better rates and features)	Stocks, funds, investment trusts and ETFs.	Free	Free	n/a	n/a	More details
Hargreaves Lansdown*	0.35%	Capped at £150 annually for shares, trusts, ETFs in Isa	£1.95	£6.95	Free	Free	More details
Interactive Investor*	£5.99 per month under £100k (Core); £14.99 above (Plus)	Free monthly trade on Plus plan.	£3.99 (Core); £1.49 (Plus)	£3.99	Free	£0.99	More details
InvestEngine	Free	Only ETFs. Managed service is 0.25%	Not available	Free	Free	Free	More details
Prosper*	Free	Refunded  fees on 30 ETFs. No shares.	Free	Free	Free	Free	More details
Scottish Widows	Free		£5	£5	n/a	2%, max £5	More details
Trading 212*	Free	Stocks, investment trusts and ETFs.	Not available	Free	n/a	Free	More details
Vanguard  Only Vanguard's own products	0.15%	Only Vanguard funds	Free	Free only Vanguard ETFs	Free	n/a	More details
(Source: ThisisMoney.co.uk June 2026. Admin % charge may be levied monthly or quarterly

DIY INVESTING PLATFORMS

AJ Bell

AJ Bell

Easy investing and ready-made portfolios

Hargreaves Lansdown

Hargreaves Lansdown

Free fund dealing and investment ideas

interactive investor

interactive investor

Flat-fee investing from £4.99 per month

Freetrade

Freetrade

Investing Isa now free on basic plan

Trading 212

Trading 212

Free share dealing and no account fee

Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.