Is investing this lump sum in one of these two funds for the next 5 years a wise decision?

There's not really such a thing as a low-risk stock market investment over a 5 year period.

An S&P 500 fund will track the market, and so will go up and down with the market. These sorts of fund are considered to be "low risk" as they invest in a large number of companies, but that's still no guarantee that you won't lose some money.

FundSmith invests in a small number of companies - about 25 at any time. As such it's considered "higher risk". But if the people managing the fund are good at picking the right companies, then it will minimise losses while the rest of the market falls.

Ultimately, the only way you can really reduce (but not eliminate) risk is to spread your money around a diverse range of investment funds. (Several funds that invest in the same thing isn't diverse.)

You are asking for "low risk, high return", which of course doesn't exist; but what you may want to consider is an asset mix that mirrors a 2025 Target Date Retirement plan. This is the "recommended" mix from any one of the major investment banks for someone retiring in five years; while you're actually retiring now, the idea is the same: the mix that lowers risk so that you have a secure amount at retirement, while balancing that with some desire for appreciation.

You could simply put the money in a Target 2025 fund itself, at Vanguard, Fidelity, any of the major brokers (whomever you prefer). For example, Vanguard's Target Retirement 2025 Fund has a 58% Stock/41% Bond mix (and 1% cash); you could either invest in that or similar, or simply invest your funds in a similar manner.

You can also read this article from Motley Fool, which goes into some details. One of the things it points out is that, most of the time in a 5 year period - 85% - the market goes up; but if you're in the 15% where it goes down, one thing you could do is simply put this off some. If the "five year" window to use the capital is not a very firm set in the ground time frame - it's just when you would ideally like to buy that house or whatever - then this might allow a little more risk tolerance.

You also could cut it down the middle, and invest in something like 60% stock / 40% bond, and then each year move a little more to Bond as a percentage - so if the market is going up you'll move more into bonds that year, and if the market goes down you might not move any. 60/40 this year, 55/45 next year, etc., by 5 years you're 40/60, and still making a decent return on half of your money.

If that risk tolerance isn't up your alley, then I'd simply invest mostly in Bonds and none in stocks, or even invest in inflation protected securities, which simply earn the amount of inflation. TIPS is the American vehicle (Treasury Inflation Protected Securities); in the UK there is something similar; you can read this Vanguard white paper on the UK version. This doesn't "gain" you anything, but it (in theory, anyway) keeps the value relative to inflation, and is extremely low risk.

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One note to consider: while you mention you want to buy a bigger house and a car, this is an unusual thing to do in retirement. It's good that you're waiting a few years - because you may well find that this isn't something you want five years from now. Many retirees find that retirement is very different from what they expected, and either end up downsizing houses or even moving to renting; the big advantages being the reduction in maintenance of the house, and the ability to pick up and move at a moment's notice. Being able to move to where the grandkids are, or even being able to move to Bermuda or somewhere else for a few years just for fun, is one of the perks of retirement, and something you could potentially find yourself wanting in five years.

As such, while I won't try to convince you what you should do with your money now, I would recommend whatever you do making sure you keep flexibility in mind. Being flexible means you can change your mind in 5 years, or not, just depending on what you want - and that's the best part of retirement: being able to be flexible!

It depends on: your age, your employment status after retirement (part time work?), amount of pension or not (and can you take any more of it as a lump sum?), any spouse/children, need for insurance or not, health, tax situation, monthly cash flow, other assets and net worth, etc. Suggest you consult a financial advisor, but only one who is a fiduciary, not a stock broker, banker, insurance agent, etc..