What you want to achieve
How to invest a lump sum: all at once or in stages?
A lump sum from an inheritance, a bonus, a pension or a business sale brings opportunity and pressure in equal measure.
The challenges
- Fear of investing just before a fall.
- Leaving money in cash for years while deciding.
- Being sold expensive products because the sum is large.
- Family and emotional pressures, especially after an inheritance.
How a disciplined process helps
Ring-fence what you need
Keep near-term spending and an emergency fund in cash. Only invest money you will not need for at least five years.
This makes it easier to stay invested through ups and downs.
Choose your method, then commit
Investing at once gets money working sooner; investing in stages over a set number of months smooths the entry point. Both are reasonable; changing your mind halfway is not.
Set the schedule in writing.
Build the portfolio with rules
Use the lump sum to build a diversified portfolio with clear position sizes, rather than putting it into one or two ideas.
Our free portfolio review can show how diversified the result is.
Where to start
- Free portfolio reviewSend your holdings for an educational review of what you own and what it costs.
- Guide: What works in investingThe research behind a factor-based, rules-driven approach.
- Charges simulatorSee how much a 1.5% charge costs compared with 0.25% over 15 years or more.
- Guide: Do you need an adviser?When advice is worth paying for, and when a process of your own may be enough.
Questions people ask
Is it better to invest a lump sum all at once?
Because markets have risen more often than they have fallen, investing at once has tended to do better on average, but phasing in reduces regret if markets fall soon after. Choose the approach you will stick to.
Should I pay off my mortgage instead?
That depends on interest rates, tax and your circumstances. A regulated adviser can help with that decision.
How long should I take to invest in stages?
Many people use 6 to 12 months. The key is to set a schedule and follow it.
Important: this page is education and information only. It is not financial advice or a personal recommendation, and it does not take your circumstances into account. The value of investments and pensions can fall as well as rise, and you may get back less than you put in. Past performance is not a reliable indicator of future results. If you are unsure what is right for you, speak to a regulated financial adviser.