Where in earth can I put this £5000?

[nonproblem]

I have recently inherited £30k and am working out what to do with it all. I have never had savings of any note before and, though quite comfortable with a decent salary, following a divorce a few years ago I've really lived month to month and I want this to be a turning point.

I've put the maximum £20k allowed in an ISA for 5 years. I would ideally like to put a further £5-6k into a savings account that I can access if needed but will otherwise leave alone. The rest I plan to keep in my current account/spend on things I have been needing for the last few years (replacement window and other such exciting things...)

The problem is I can't work out where to put the £5-6k. I've seen savings accounts that seem to limit your initial deposit and are aimed at putting relatively small amounts away monthly. I've got one of those already and want to continue paying into that £300-£500 from my salary as I was doing before the inheritance and I don't want that to stop. I have also thought about opening another current account as they don't limit deposits but you need to have bigger monthly amounts going in and direct debits going out and I think I'd have to do a lot of moving money around each month and would end up not doing it or getting confused.

Any ideas? I'm so worried that if leave it in my current account it''ll end up getting frittered over time and it also makes it hard to track my monthly spending as it's keeping the balance artificially high. Have I missed something obvious?

Just enjoy it and treat yourself!! You’ve already put the majority into an ISA and you’re still saving every month.

Pension is your safest, securest investment, according to my financial advisor. Something to do with taxes.

Do you have kids? I've opened an account in their names as much higher interest

Overpay on mortgage if you have one. There's naff all point in putting the money in savings if you have a mortgage. Check overpayment clauses first. your

@nonproblem

Ah, Premium Bonds - I'm not even sure what they are exactly, but will have a Google.

I have a savings account linked to my bank account, but again, it only allows me to deposit about £250 per month.

Don't think I'm brave enough for trading...

Yes you are!!! It's easy once you get started but i get that it's daunting at first. Open an account with Hargreaves Lonsdale and do some dummy runs. Making modest amounts every day is pretty straightforward.

If you’ve already put £20k into a cash ISA, then you can’t invest in a Stocks and Shares ISA this tax year, as you’ve used all your allowance.

Pensions are great tax-wise, but you won’t be able to access it til you are at least 55, so no good if you are younger than that and want to dip and and out of it.

If you are likely to want to access the money over the next, say, five years, then stocks and shares aren’t really appropriate- you need to be able to accept/afford potential loss. So say you invested the £5,000, but then next year, it was only worth £3,000 - would you be ok with that? Would it cause you a problem? Or could you just leave it in the hope it recovers?

If you need access to it, put it in a cash savings account or premium bonds, interest rates aren’t great, but you’ll be able to access it when you want.

Agree with PP about investing - it was my first thought when I read your post.

Would you be happy to put some of the money away long term? If you could leave the money for 10-15 years+ I’d definitely recommend opening an account with someone like Vanguard. You could get great returns from one of their medium risk funds (e.g. 60% Lifestrategy), much more than you’d get from a normal ISA. But as pp have said, you need to be willing to leave the money for a few years, and accept the very small chance that you could lose money.

I would also pay a lump sum off your mortgage if you have one.

Yes you are!!! It's easy once you get started but i get that it's daunting at first. Open an account with Hargreaves Lonsdale and do some dummy runs. Making modest amounts every day is pretty straightforward.

Reiterating, don't do this for short term savings. Also, check the fee structure carefully - percentages, and if there are dealing charges. I think Hargreaves Lansdown are on the high side, Halifax share dealing are one of the cheaper options.

Invest! It's easy to do and if the rest of the money is in a fixed rate account you might as well take a bit of risk. Have a look at index funds like the FTSE global all cap index fund and see how much money you could have made in the last few years if you'd invested earlier. www.vanguardinvestor.co.uk/investments/vanguard-ftse-global-all-cap-index-fund-gbp-acc

Another vote for premium bonds if you don’t feel ready to enter the world of investing.

Have a look at your local building society for their access (often limited access) accounts. You'll probably get less than 1%, but it's better than having a few grand sitting in your current account.

There's no need to have ISAs unless you pay tax on the interest you earn, unless the interest rate is higher than any other available option of course.

Wow- thanks for all these replies. I'm going to catch up on them now.

Another vote for premium bonds

I really think I'm going to go with premium bonds. The person who left me the money actually had some and she often used to talk about what she'd do 'if my premium bonds win...', which they didn't in any major way but it makes it seem fitting.

I really don't want to do the investment thing, and am not sure that I can as I already have the £20k ISA. I would be gutted if they went down not up then I needed to use it and I'd feel like I'd wasted her money. I chose the ISA as it was the top one recommended on MSE with Shawbrook that a pp mentioned. It stands to make about £200 per year so I'm quite happy with that.

I've got 1 0% balance credit card which I will have paid off from my salary by the time the 0% ends so I'm not worried about that. I also have an excellent pension through work and don't want to add to it as I don't think I'd be able to access the money.

I thought about the mortgage but I'm not keen as I wouldn't be able to access the money. I'm overpaying a bit monthly and will look at throwing more at it when the bigger ISA matures.

Thank you so much for all the ideas - this has been so useful .

I would invest it in cryptocurrency- you can withdraw when you need but could very potentially make lots more cash from it

Cryptocurrency is a great idea. No-one's ever lost a penny from it and it's the obvious choice for a risk adverse beginner in the world of investment.

I would of put 10k ina card isa, 10k in stocks and shares to grow and 5k into premium bonds

I have premium bonds and regular win £25, easy access to your money but itsclike a free lottery, you might just win one of the bigger prizes and beats leaving it in a saving account that doesn't offer that

I'd compare the interest you'd save on the mortgage vs the interest you'd earn on the 5 years ISA. Try the MSE mortgage overpayment calculator.
You are probably better off overpaying that, whacking the £5-6k into an ISA (whereby you can access it if disaster strikes, albeit forfeiting the interest) and having your regular savings of £3-500 a month as your more immediate emergency fund.

@BarbaraofSeville Snort!

Hi @ErrolTheDragon there’s no will as she always said she was penniless! It’s only me and my mum and she wants me to have it, she doesn’t need it. It’s not a huge amount
@dealornodealer I suppose I could take a copy of the death certificate.