Thanks all, been very helpful. This money is a one-off lump sum, so want to make sure I use it in the best possible way to secure future financial security. Savings are low also at moment as just finishing off a fair amount of home improvements, so think I need to go with paying off some mortgage and the rest in a decent ISA.
If you're under 40 in April the new LISA promisses a good return you pay in upto £4k and get interest plus a £1k gov top up after 12 months.
Paying down mortgage is always good advise but do you have a reasonanbe sized fairly accessible pot of money for things like replacement cars/ replacement boiler/ big holidays. No point paying off mortgage at 1.7% interest and then having loans at 9% for major purchases.
If you are a higher rate tax payer, I would seriously consider stock market investment via a pension. You would lock it away for some time (depending on your age) but get 40% tax relief on it. Fabulous return!
It depends on your attitude to risk, capacity for loss, how quickly you need it, for example as a starting point you should have an amount equal to 3-6 months income easily available. If you work you could put it in a pension and receive 20% back even if you are a basic rate tax payer, meaning that you are invest £31,250 for your future which in a tax favourable environment could be worth a decent figure with compound growth over a good few years.
If you don’t have much in the way of savings I would put £3k in Tesco at 3%, Make Santander 123 your main current account so the cashback on bills offsets the £5 monthly fee and keep the balance as close to £20k as you can and the rest in another similar account (TSB or Lloyds or look on moneysavingexpert for alternatives) as that probably averages close to your mortgage rate and you have the money available should you need house repairs, new car etc in the future.