£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?

If you are within the age limit (38 years I think) open up a Lifetime Isa, you can save £4000 a year and the govt give you £1 for every £4 you save. As you already own your own home you won't be able to get access (without paying a fee) untill you are 60. I use the moneybox app as highly recommended by MSE and backed by a proper bank.

Then put the max in premium bonds for now, until you know what to do with it.

Sorry for your loss OP.

You're sensible to be thinking about what to do with your money.

I suggest that you speak to a Financial Advisor (one that is not tied to just one bank or building society). They'll talk through your options and tell you what risks there are.

I suggest reading through the moneysaving expert guide.

Generally speaking your options are:

1. Pay off any outstanding credit cards and loans first
2. Consider paying off your mortgage (check there are no penalties)
3. Put aside an amount in your savings accounts if you think you may need the money quickly i.e. for a rainy day
4. If you can leave some money without withdrawing it over 2 years, consider looking at savings bonds. These have a slightly better interest rate than your average high street bank's savings account.
5. If you can leave some of your money aside for at least 5 years consider investing in funds or stocks and shares ISA (the financial advisor can help you). The stock market does on average, outperform a savings account (depending on what you invest in).

Another good guide is this which gives a nice overview of options too.

Bitcoin has gone up a lot this year. I think it will be worth a try for this coming year.

@Champagnecharleyismyname

Stocks and shares ISA for £20K. £50K into premium bonds.

This is what I would do.

It is a balance of security (premium bonds) and high risk growth (stocks and shares isa).

Somebody else has recommended the hargreaves loans down website. Even if you don’t buy products through them, they have good introductory information about possible investment options and I would strongly suggest you have a look through that to see what suits you.

All IFAs have to be upfront about charges. They often charge a percentage to invest and then an ongoing service charge. You should expect to make this back in the first year or two.

The markets are very volatile at the moment so it's good to be in an actively managed fund.

Is your mortgage paid off? That makes all the difference. Look at how much interest you pay over 20 years and it is the best way to save money. Otherwise a bit in your pension, a bit for doing something nice when covid is over and split between easily accessed lower interest money and higher interest longer commitment savings. With that much money though a financial advisor would be useful

Pay off any high interest debt e.g. credit cards
Put some in premium bonds
Look at Money Savings Expert if you want to put a bit in a savings account. Do you have a First Direct bank account or HSBC? They are paying 2.75% on a regular saver (300pm for a year)
Personally with £70k I would avoid an IFA, their fees will take more than you make. Have a look at Vanguard funds.

Not premium bonds before 1st December, and then check Martin Lewis website to see the returns as they are cutting the rate.

I get over 3% with the least risky option on Zopa which is a peer to peer lending site.

@JoeNotExotic - Can I ask which crypto gave you such a big return? Many thanks.

Another vote for Premium Bonds. Completely safe, some months you don't win the draw but mostly can win £25-£100 fairly regularly so better than interest rates. The more you have the better chance of winning, the max you can have in there is £50k. Plus you never know you might win the jackpot.

I would keep the rest in a cash ISA if it's just short term, but you're best to speak with a financial advisor, or at the very least look at the Money Saving Expert website.

Sorry for the loss of your dad

I would put £50,000 in Premium Bonds immediately, no risk and a decent chance of some return. Who do you bank with? Nationwide are offering a good reward account with prizes for current customers.

really sorry for your loss, that's a terribly young age to die

I would open and stick it straight into a Marcus account while you think what else to do with it. I left mine in my current account for ages as I felt overwhelmed (divorce) and wish I'd just stuck it somewhere higher paying straight away.

I’d put £50k into Premium Bonds (very safe and you should get out at least the same as a high street savings account) and £20k into a riskier stocks and shares ISA.

Why not find yourself an IFA though? Most of them will advise for free as they are paid by whichever investment package you take out. We have one and he has been excellent.

I have a similar sum and got the impression a financial advisor wouldn’t be interested as it’s too small a sum. Plus it’s hard to find someone without a personal recommendation.

I don’t have time or energy for stocks and shares ISAs so just shopped around for the best rates. Now is the worst for savings rates sadly. But at least it won’t lose value, aside from inflation. Fixed rate products can be better but it depends when you want access.

Paying off the mortgage will save interest but the bank won’t easily give it back (via remortgage) if you needed it in an emergency. And remortgage would involve giving up a really good rate if you bought a long time ago. You can port many mortgages to a new home when you move.

@hamstersarse forgive my ignorance but the 19k you made did you physically have to do things to make that happen? Also I assume the 39k could drop in value are you allowed to take it out after making a profit?

PLEASE speak to an independent financial advisor.

• Savings accounts have crap interest at the moment, BUT you should always have 3-6 months of living expenses set aside for emergencies if at all possible, in a savings account. MSE often lists the highest rates, but most are awful now. Still, you need some liquid cash.

• Shares ISA - you need to speak to a financial advisor to figure out what kind of risk you're prepared to accept, different funds will have different risk levels. Given you don't seem to know much about finance I would recommend that if you decide to invest some of your money in shares, you go for a managed account. However usually you would only invest in shares if it's a long term thing, like 5-10 years +, usually longer. That's because, whilst values rise in the longer term, in the shorter term you could see big losses. E.g. earlier this year every shares account we had lost about 25% of its value pretty much overnight, so e.g. a £100,000 investment in Feb was only worth £75,000 in March. It's okay if you don't need that money for 10 years and can afford to wait for recovery (i.e. by fund managers buying stocks when they're low and waiting for them to go up), but if you need money in 2 years, that would be a massive problem. Most of our shares have now recovered, but Brexit is around the corner.

• Premium Bonds have poor returns (if you look at the likelihood of the win, size of win etc, versus leaving the money in some bank accounts). However there's always that (slim) chance of a big win so many people like to have a small amount. Remember that putting your money in an account/premium bonds with low rate of return is actually losing you money, because due to inflation that money will have lower purchasing power over time.

• Avoid cryptocurrency, managing your own investment funds etc. This money is clearly money you have a use for, and you don't know what you're doing, so avoid any of these high risk strategies.

• Topping up pensions can be a good idea (they're basically long-term stock market investments), but remember that you can't access that money for a long time.

• I am not sure if Lifestime ISAs are still available for new starters, if so they might be an idea for a pension top up as the government is/was paying a 25% top up on everything you put in, so it beats most investments and all savings accounts (but again you can't access until retirement).

• Overpaying on mortgage can be a good idea if you are permitted (some mortgages will penalise you so read your t&cs carefully). As most savings accounts are

Speak to an independent financial advisor. They have a better overview of the products available.

[quote itsadress]@hamstersarse forgive my ignorance but the 19k you made did you physically have to do things to make that happen? Also I assume the 39k could drop in value are you allowed to take it out after making a profit? [/quote]
I do the trading myself

And YES, it could totally drop in value. Nothing is guaranteed on the stockmarket.

You don't do it unless you are prepared to lose money or probably more accurately if you need to withdraw the money quickly and everything is on a down

the OP wanted no risk options hence why I suggested cash isa, savings and if she wanted premium bonds

Shares isa can be lower risk usually you get a choice of the level of risk you want - but they do take a bit longer to cash out

Premium bonds are just a favourite - you get back what you put in BUT obv they don't pay interest and don't take into account inflation.

You may save a large amount in interest if you pay something off your mortgage. Do the maths.

No good putting it into something that pays less than you are amassing in charges. Don't keep over 85K in one bank account in this climate.

hamstersarse can I ask what platform (is that the right word) that you use? I have 15k doing nothing that Im thinking of investing. I don't need it as such so can play the long game.

Speak to a financial advisor, but in all honesty I would probably chuck a few grand into a savings account for a rainy day and then pay the rest into my mortgage. (This is assuming that you don't have any credit card debts etc, but I'm guessing you dont need to be told to pay those off first)

@itsadress

I use Hargreaves Lansdown

They are pretty reputable, maybe not the absolute cheapest per trade, but you have a decent amount so probably won't be doing tonnes of small amounts of trades

Good luck - lots of bargains out there!

I keep seeing Premium Bonds recommended on here but BEWARE, they are about to go through a massive change.