What to do with a £300k inheritance?

[adviceseeker22]

Yes I know it's a good problem to have.

I line an easy life so even though I though in RE at first, it seems like too much hassle and not enough ROI.

Investments (via a broker/advisor) I don't know, but for some reason I don't fully trust it. I'd be happy to do it with a bank though.

The last option (and most sensible one) seems to be to pay off the mortgage, and get an ISA where we put our savings.

BTW pensions wise, we seem to be doing OK (even if I think it's quite small these days, projections show it will be ok once we retire, and I'm pretty sure we don't need 2/3 of our income).

Always pay of debts first as they cost you money.

Then plough into pensions savings and investments that can serve different purposes.

Key bits of information a how much is left after mortgage paid off and b) how old are you/ how many working years to you have left till retirement

I received similar and paying off the mortgage was the first thing I did then bought a new 2nd hand car and I've split the remainder between different banks. Currently have cancer for 2nd time so enjoying easy access to the money to treat myself and family. Also bought a campervan. I believe in enjoying life now.nit keeping for a rainy day. Also sorry for your loss.

Pay off debt and buy property to rent out with whatever is left.

Don’t buy property, everyone who is a landlord is selling right now.

We're left with around £40k after paying off the mortgage. I still plan to work for 30 years give or take.

Replied to soon. No debts, and our cars are fine. We've also budget enough for a nice holiday this year and next year.

I would pay off the mortgage then, that debt will be gone forever and you'll own your home outright. The peace of mind of that is totally worth it!

With the remaining £40k I'd put it premium bonds and just treat myself every time I won 🤣. It's probably more financially sensible to put it in pension or stocks and shares ISA but you sound in a good position anyway so that's what I'd do.

Mortgage (as long as no ERC)
AMG
Pensions
Savings

If your pensions and job prospects are secure I would pay off your mortgage first.

Then if you have children … of what age?. … I would put money in the best child ISA / savings account you can find, to give them a meaningful nest egg. Towards future house costs, or tell them it is their Uni fund and will replace parental contribution (because they will get higher interest rates).

Or Would you like to use it to fund a new house (bigger / better area?) or significant improvements?

A holiday and rainy day fund (keep enough for a boiler and car, and new roof if one is imminent) but remember that if you pay off your mortgage you will have that money available each month to save (or spend some to have more fun)

While you wait put it in the highest interest easy access accounts you can find. Taking care not to go over the FSCS protected limit for each one. It’s surprising how much the interest adds up and what difference the rate makes on a big sum.

1. Pay off the mortgage

1. Put the remainder into premium bonds

1. Use what would have been your mortgage payments - save half/invest/inject into pension etc and use the remaining half to have a more comfortable day to day cash flow

Easy

We paid off our mortgage and then put the remaining 40k in a stocks and shares isa. Our financial advisor had suggested that we could make more money by keeping the mortgage (which is fixed at a low rate) and investing more of the money as the returns would likely be higher but we felt much better knowing that the mortgage was paid off and we had that financial security.

Pay off the mortgage , keep £10-£15k in accessible savings, the rest in a fixed savings bond. HSBC just posted me one with 4.5% interest over two years and you don't risk your initial capital.

In your shoes op I'd pay off any debts inc the mortgage, unless you plan to buy a bigger house in the future. A mortgage is easier to get if you've already got one, plus if you've no debts it's harder, as you have no credit history either.

After this id put more info your pensions, with the look to retire at 55 or even 50 if that's possible. The remainder I'd put into premium bonds. Or if you have kids put an amount away for college/uni/driving lessons etc

Is your mortgage fixed at a low rate for a while?

If so wait til that rate runs out. Essentially borrowing money (your mortgage) on 2.5% leaving you able to put money into a savings accounts at 4.5 to 4.9% (say), leaves you better off, even though you will be liable for tax on interest over £1k per year for accounts that are not ISAs. Then pay off the mortgage when your fix ends. You need to look carefully at whether your mortgage has an early redemption penalty, too.

How is your pension? Paying off the mortgage is good but not to the point where you don't look out for pension as well.

I would split it, part mortgage, part pension, part short-term spending money, maybe for a more out-of-reach holiday or something in the house/garden you really want but can't justify.

Pay off mortgage.
Put some aside for inheritance tax
Put some in an ISA
Rest in a “high” interest instant access account

Our monthly contributions are £700 and with our current pot, they seem to be good enough.

We do plan to put some money aside in the next couple of years in separate ISAs for the DC.

You need the advice of a financial advisor - either through the bank or a reputable company.

This might help where to start

https://ukpersonal.finance/flowchart/

In your shoes, I'd pay off the mortgage, the rest I'd put in premium bonds and fixed rate savings of different time periods with a view to moving into pensions and S&S ISAs as allowances allow, and probably invest some more aside in a general investment account. Make sure you understand tax on interest above the personal allowance when comparing rates.

No thoughts of moving to a more expensive property or buying a holiday home? Do you want/need to do any work on your current house or buy electric cars?

Yes, for that amount it's likely to be worth talking to a financial advisor as it's above the amount where you can just put it in S&S ISAs, pensions and a bit of cash savings.

Pay off mortgage if you can do without penalty.
Then with monthly mortgage money pay at least some of it extra into pension, bung the rest in ISAs or other savings. If you feel like it you could drip feed into a FTSE tracker unit trust.

Do not put it into savings in the actual names of DCs as they can then blow it when they turn 18.

Without a doubt, we'd use it to buy somewhere better. If we really wanted to stay put, then new kitchen, bathroom, holiday abroad and some money put aside/given to DD.

1. top up pension contributions by say £25k each
2. invest £20k each in S&S ISAS
3. Pay off £150k mortgage (if it doesn’t cost you £)
4. save £5k for emergencies in a high interest account
5. Spend the rest on something fun

This!

You need advice from an independent financial adviser, as a bank one will try to sell you their bank/affiliated products.

Look at investing in ISA and SIPP wrappers. £300k invested in stocks and shares with a medium risk level in the past five months would have made about 5-7%.

Paying off a mortgage only makes sense if your interest rate is more than ROI in equities, or your personal aversion to mortgage debt is high. It is not uncommon for equities to make double digit ROI and you would be investing a markets that are down now, so with potential for significant returns in the long term.