Is this a financial mistake? Help please

How far would you really have to move to live in a better area. Could it be worth moving and then using childcare where needed.

Absolutely not.

Pay if off of your mortgage. Then continue paying the same amount off your mortgage as you do now so that you significantly reduce the term. You will save a heap of interest and have the security that if the rate moves you can still comfortably manage the repayments.

Don't put it into private schooling. There are lots of things to consider- as she ages you can supplement state school with tutors where needed and be able to afford the nice trips/ after school clubs she will want. These things are not cheap and have hidden extra costs. Maybe ex can put towards clubs with increase and tutors. I think wherever your kid goes you always end up having to do extra at home with them so private doesn't guarantee no extra costs elsewhere.

Also maybe if it didn't go on mortgage and your comfortable covering that for abit then look to invest some of it or stick it in a savings account and let the interest grow for dd.

Kindly I don’t think you can afford to do it. Uniforms alone can cost in excess of 600-800 a year.

Then there are school trips abroad every year, school lunches £5 a day etc

it all adds up

I’d use it to move to a better area.

When you say absolutely awful, what do you mean?
A good brain with a loving supportive home will succeed anywhere.
A stressed out broke mother trying to pay private fees on a standard income will not be conducive to a supportive home over the years.

I don’t think you can afford it sorry. Even if you used the £80,000 to pay off some of your mortgage plus your ex gave you £1500 a month, you wouldn’t have a huge amount of money left every month to pay your mortgage, bills, food etc for you and a child. Plus you’d still have to top up fees even with decent maintenance, and this amount would only increase as fees will increase because of inflation and because they tend to price based on age of child. For example, prep is £12k pa in the school DD will go to, sixth form is £24k pa. I think using the money in general for your housing is more sensible and more realistic in the long term.

Not to mention that by the time your child starts school in 2-3 years, it won't be £20k - it'll be more like £24k. And by the time they finish Infants, it'll be pushing £30k. Plus the school uniform and the extras and any wraparound care...

Paying off part of your mortgage is an investment. Paying for private school fees is not.

Put 20k in ISA and some in PB and some in mortgage. There is enough to spread. If you comfortably pay your mortgage I would invest more and put less in mortgage.

You can’t afford private school- the £80k will soon be gone. I’d use it to move to somewhere with good state schools.

It's only worth using the lump sum to reduce the mortgage if (1) You like the idea of reducing debt, A LOT, OR (2) The interest rate is very high, and higher than you'd get in a savings account or other product. Otherwise, paying off the mortgage reduces your flexibility (unless there are easy means to borrow back).

With a bit of looking, you can get 4.5% or so on savings accounts (e.g. Hargreaves Lansdown Active Saver). You could use ISAs before & after April to invest £40,000. If you don't mind Apps & exotic providers, then online ISAs can get closer to 5%. Premium bonds (up to £50k) would average 4%, probably closer to 3% in practice unless you get lucky. So, not worth paying off mortgage unless the interest rate is above these kinds of numbers -- which, of course, it might be!

If your child is 2, then you have a few years to think about things. You might get a higher return with shares/ISAs, but 3-4 years is too short to be rising that.

The main thing I'd say in favour of private schooling is it doesn't cost much more than nursery places, if you're used to paying for them! (maybe not if using local family support).

This is good advice.
It's also worth saying: investing vs paying down the mortgage is a false dichotomy. Paying down the mortgage IS investing. It also reduces your outgoings. The money is not gone - it is still in the equity of your house.
Those saying use the money to fund a move to an area with better schools also make a valid point.
Lastly, 80k is not enough to fund your way through private school. Friends and ourselves have paid for private schools and most of us say with the way fees have gone, and knowing what you get, we wouldn't do it if starting now.

Have you visited any of these schools.

Sometimes the school with the outstanding OFSTED rating isn’t the best school for your child.

I chose a school that was in special measures for DS. (After I had to pull him out of an OFSTED Outstanding school). People I knew looked at me with pity when I told them which school DS attended

It was the best school because although the OFSTED rating and reports were dreadful, they didn’t reflect what happened after the Ofsted inspection. The new HT was given a blank check to turn this school around and to hire new teachers and spend money where needed

The playground was overhauled and was that amazing. A chess club that did tournaments with all the other schools in the area. (Including the private schools) etc

When DS left just a year later DS attended a large comprehensive (with 4 others from his primary school class.
Year 7 intake 270 pupils
They first tested in all subjects to get to know which class level pupils should be placed in

The 5 children from DS’s primary school who attended took the first 5 places with only 3 points between top and 5th in Maths.

I would keep an open mind on the schools and would do a visit to see if any actually seem better or worse than the Ofsted rating.

Schools can change dramatically between inspections

Tge Outstanding school that I pulled DS out of went into special measure only a few months later

I would plan on moving to an area that had good schools for secondary when your kid is about to start. As others say you can fill in rubbish primary school gaps and kids can catch up at high school. You're also not likely to need the family support as much as you do with a two year old.

In the meantime with the money, unless you have a reason to believe your house or area will not rise with house price inflation of the area you want to move to, overpay your mortgage to reduce the amount of interest you will end up paying over the whole term.

Personally I’d try and relocate to an area with better state schools? School fees are a big commitment and who knows what the future holds for you or your ex earnings wise? Or if you will have further children potentially in the future? You could revisit private for secondary depending upon your circumstances.

Research the best state options and look at how you can make that work and invest the money.

100% I'd pay it of the mortgage
Or use it to move to an area with better schools

Neither. I'd invest half into S&P 500 and put half on a deposit on a property that you can rent out. The one day you can either sell the property or leave it to your child.

in order of priority

• pay off debts
• have emergency savings fund (3 months salary)
• reduce mortgage
• max out ISA in a tracker fund (not cash) each year until the rest of the money is in the ISA

don't bother with private school, especially at primary level. you can keep spare money for tutors / secondary school if it is needed later.

This

Good luck OP 🤞

Honestly don't spend it on private school. That's my biggest regret

Pay some of your mortgage and have a nice holiday

£80k would only pay for a few years of private, it wouldn't see them through from Reception to Year 6. Can you afford the fees after the £80k runs out?

I'd fill up yours and DDs ISAs every year for the next few years instead.

You can only put £20k per year into isa, look into flagstone for savings.
Private education is worth it in my opinion, but as others have said only once they get out of primary. Look around into highest interest rates, also as a gift you need to be aware if this will be subject to any tax, just check with accountant if you have access. You could end up having to pay some back - just to check without scaring you.

Do you pay anything in to a pension? If so, why noy put at least some of it in to that. If not, then you should.