£70,000 sitting in account

[DownstairsMixUp]

Anyone savvy with money know if there's anything I should be doing?

I lost my dad earlier this year and as he did not retire, me and my brother each got £70,000 each. The solicitor involved due to the way he died is going for a claim in court which could also get us another 25,000-£125,000 each. We don't know when this will be over right now.

I'm studying and still have two years to go and me and my husband own our own home. We are not sure if we will stay in this area so have just got the money sitting in my savings which has a 0.05% interest rate. We have decided that once I've qualified and the solicitor money comes through we will need to decide whether to just buy the rest of our home or obviously sell and go elsewhere.

In the meantime, is there anything I can do with the 70,000 for two years? I'm not from a money background so to have this sort of money sitting in my account is weird. Is it best just leaving it in the savings account? A brief Google tells me interest rates aren't great right now. Any ideas?

stocks & shares ISA with Nutmeg (lower fees that Hargreaves Lansdown) and you can get an Eco-friendly option if you want.

@Hoppinggreen

Brexit isn’t an issue if you choose the right shares, I made £700 last week. But I appreciate it’s not for everyone Also sorry for your loss OP, I should have said that

Been thinking of shares, what is the best route for this?

You and your husband can put in £20,000 each per year into a stock and shares isa.

Lot's of companies paying 5%+ dividend. Over two years, you might get a capital increase as well.

Obviously no one can see the future though, and there will be some risk. But if you pick big name solid companies and spread it over industries.

Interest rates are about to be slashed on premium bonds (that's ns&i right?). I've got a Marcus account which is goldman sachs, and that pays 0.7% at the moment. The rates for savings are pitiful sadly. Martin Lewis recommends paying off any debts which have higher interest rates, so your mortgage perhaps? I had 120k to store for a few months and divided between Marcus and an isa. 85k is the maximum in any one account for protection.

I’d put your emergency fund (3 - 6 months expenditure) in premium bonds. Keep about £2k in a bog standard bank account for easy access.

Then depends on when you need the money. If you need it in the next 5 years, put as much as you can in premium bonds (£50k).

Then, put the rest (or more if you don’t need the cash soon) in an index tracker. This basically invests in the stock market as a whole so less risky than singular shares. Something like Vanguard life strategy is good and you can pick your risk level. This is a stocks and shares ISA. You have £20k a year allowance for your ISA.

Unless you’re willing to lose the whole lot, don’t invest in crypto currency or a singular stock (note though you could get lucky and make a fortune, but very risky).

Check out Reddit personal finance - there’s a great flow chart.

Also, I’d maybe treat yourself to a lovely holiday when we can travel!

Yes hamstersarse we have done quite well in the last few months with ours. It dipped when Covid first kicked off but as DH is very proactive with it and swaps loads of tips with people who also watch the markets it turned out pretty well
It’s not something you should do with money you urgently need though or if you aren’t comfortable with shares

@JoeNotExotic

Risky but I’ve made a LOT of money in crypto-currency. Bought 15 coins at £2k today they are worth £14k. Very volatile and I’m in for the long game but you could short the market quite easily with crypto at the moment. Obviously you’d need to wait until it drops again which it’s likely to.

I've had some bitcoin for a few years and only in the last month have they been above what I paid for them

I don't rate them much, but that is mainly because I just don't understand it tbh. And I have just written off the money in my head and just going to see what happens in the long-term

I wouldn't recommend OP

Is this a good moment to put money in a Stocks and Shares ISA? With Brexit coming up? And with the LOP maybe not waning to leave the money in for a long stint?

^^

As pp said don't worry about brexit - you could wait and see if we have no deal and buy ?

Mortgage or stocks and shares ISA

Seek professional advice. If it were me and I did not, first thing would be to reduce the mortgage.

@Hoppinggreen

Yes hamstersarse we have done quite well in the last few months with ours. It dipped when Covid first kicked off but as DH is very proactive with it and swaps loads of tips with people who also watch the markets it turned out pretty well It’s not something you should do with money you urgently need though or if you aren’t comfortable with shares

It's actually fun!

I am constantly on the HL app. whiling away tedious Teams meetings

My problem is not selling and cashing in, I get duped that it is just going to keep on rising and rising and must learn to cash in!

There's some very bad advice on this thread. Speak to an IFA about what you want but since my impression from your OP is you want somwhere safe for 2 years then either the best savings account you can find or pay off you mortgage (be aware of early repayment charges though and think about the likelihood of your house value increasing, that will depend where you are). For longer term savings pension and/or S&S.

Pay to speak to an independent financial advisor (IFA). It won’t cost much in comparison to what you might save.
They have to be really up front about their fees before you engage them so you’ll know what they’ll charge.

How would you feel if you put £20,000 in an investment and in 2 years it’s worth £17,000?

Will you be in a position where you definitely want to use the money in 2 years? If so, investing generally wouldn’t be advised. Anything stocks and shares based should be seen as a 5 year + investment. This gives you more opportunity to ride out fluctuations/achieve growth.

The more flexible you can be when investing the better, so again, if you can’t afford to wait for recovery if it were to fall in two years, investing is probably not a good idea.

Others will have done well investing in April as markets were at their lowest late March. Now they’ve recovered those losses it seems unlikely many are going to surge beyond where they were pre covid but who knows! (no one!!!)

Mortgage- what is your interest rate? If it’s higher than what you can earn in interest you could be better off repaying this.

As others have said- keep an emergency fund.

Getting financial advice could be sensible as an adviser will look at your situation and make recommendations based on your circumstances, which we don’t have all the details of. For example do you have debts- loans/credit cards etc. These could be worth repaying ASAP potentially (but again- we don’t have all your info!). The downside is if you only have £70k and may not be investing any of it, you’re unlikely to find a financial adviser who will help.

If you are keen on investing, there may be websites that provide some sort or automated (robo) advice which could point you in the right direction. You could try searching the term online.

Low interest rates aren’t great but it is possible the security of cash will be more valuable to you than a potentially greater return from an investment (or loss). In which case use websites online which show the best interest rates available.

Financial advisor, all the way.

I would probably get a buy to let property, the income can’t really be beaten if you get an interest only mortgage. Alternatively, pay off a chunk of your mortgage: as a pp says, it would save you silly amounts.

Currently, we have almost that and we’re just saving it for retirement. I’m trying to persuade my dh to get a newer car, his just keeps going wrong.

A friend has lost thousands in stocks & shares recently - depends if you want to take the risk.

I would always advise Premium Bonds - I've had a return of 1.82% over the last year, much better than savings accounts (and could still win the million one month )

Stocks and shares ISA - 20k this financial yr and £20k next. Keep the rest liquid as contingency. In the long-term I’d look at getting and investment property with an interest only mortgage to earn rental income on.

I’ve made more than 100% over the last year in an investment trust called Scottish Mortgage, managed by Hargreaves Lansdown.
Obviously it may tank tomorrow but I’m delighted by the growth in value.

I also second pp above that there’s some very poor advice on this thread - I say this as a former investment adviser. Speak to someone qualified.

@DonttouchthatLarry

A friend has lost thousands in stocks & shares recently - depends if you want to take the risk.

I would always advise Premium Bonds - I've had a return of 1.82% over the last year, much better than savings accounts (and could still win the million one month )

What on earth did your friend invest in?

www.hl.co.uk/partners/search/buy-shares-online?partners=1&share_sedol=BLDYK61&action=buy&theSource=PCGEC&Override=1&adg=G+FSIT+SMG&gclid=CjwKCAiAtej9BRAvEiwA0UAWXv3NMVrW2ATRESOTJvR6mjQ-awpR4AjfVlrdd3_XGUrNlcxczSOvUxoCp84QAvD_BwE

Definitely see a financial advisor. They will help you work through your finances in their entirety so you feel confident with the plan you put in place.

Crypto currency....so wrong on so many counts...just avoid.
Stick them in Premium Bonds whilst you decide what to do longer term.

Have you got a pension or are you likely to need a bit of a top up in retirement? If you’re not likely to need all of it before then it is a very tax efficient way of investing, especially if you are a higher rate tax payer. As others have suggested speak to a financial advisor and how much per year might benefit you.

I had an amount of money to put aside (given to me by my dad, awaiting use for an extension within two years). I spoke to my dad's financial advisor about what to do with it and he actually suggested premium bonds- the interest rate isn't market leading but interest rates are appalling across the board. He also recommended the Marcus account. Whilst he would always recommend Stocks and shares in the long term he felt two years was too risky as we wanted the money safe.

So I split the money between the Marcus account and premium bonds. I've actually done better on the premium bonds. I haven't won a single prize bigger than £25 but lots of months I get two lots of £25.

As we had a bulk in savings we directed some extra cash into my ISA. But that's more for long term growth.