Inheritance qu

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If you were in the unexpected fortunate position of inheriting some money, what would your priorities be?

(Think around 200k)

Have I missed anything blatantly obvious from my list? I am childless, and currently renting.

• pay off all debt
• replace car with a more reliable and newer one
• a holiday as i havent been able to treat myself to a break for several years
• put away 50k for emergencies/future job loss/employment gaps etc
• house deposit with the remainder, budgeting maybe 100-125k for it

Not meant as a goady post, i have literally never thought about this, and am now in this unexpected position having lost a very dear aunt

How old are you ? Can you get a mortgage with that deposit?

If yes your plan sounds great.

If no , can you buy a house outright in your area ? Then you can use the money you currently pay on rent for the other things.

I'd be tempted to buy outright if I could.

Sorry for your loss.

An excellent list so far. I would also add 20k in to a stock and share isa for this and next years allowance to grow for future use tax free. Do you have a pension you can add to?

How about buying something lovely to remind you of your aunt... a piece of jewellery , furniture or a piece of art maybe? Something to treasure. I bought a piano after receiving a small inheritance 20 years ago from an elderly relative and still love it.
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Agree something lovely to remember your aunt by, such as a piece of jewellery. Max out premium bonds while you make up your mind about the rest.

I would pay off all debts, buy something special to remind me of my aunt, and use the rest for a house deposit.

The car and holiday would wait until I had the house and could be bought from the money saved by not renting.

Buy a car and put most of it down as a massive deposit or even buy a flat outright depending on where you live.

Thank you for all your replies ❤️

Love the idea of buying something to remember her by, she had fabulous fashion sense and style so I will certainly find something to remind me of her!

Age - in my mid-late thirties and full time employed, so should be able to get a mortgage :)

Unfortunately price/area wise I wouldn't be able to buy outright.

@omega4ever can you explain a bit more about a stocks and shares isa please? Is that a risk of losing money at all?

@Whatwouldnanado I've never looked into premium bonds and didn't realise they can be maxed out! Is that something where the money can be accessed if needed? (Thinking if it would be ideal for my emergency stash which I hope to never need)

I would put as much towards a house of your own if you are renting, assuming you are going to stay in the area.

You might as well pay off debts because they will be taken into account when you apply for a mortgage. And why pay interest.

Go and see a mortgage advisor at your bank, it's free, they will talk through your options. It's a life-changing amount of money OP get professional advise. Find out how much mortgage you can get. Have a safety net because houses can be expensive. Don't buy a really old house they bleed money.

Speak to your bank. And others take advice from wherever you can.

@frozendaisy thank you - it certainly is life changing!

Good shout on not having an old house, I certainly don't want to end up in that sort of spending/fixing cycle with it 🙈

We have just inherited £300k

We plan to pay our mortgage off , and invest the rest in ISAs/stocks and shares , also going to holiday , house improvements .

This is a life changing amount for us . But I'd rather our relative was still with us. I'd give it all back if I could turn back time.

If I were renting and had debt, I'd pay off all debts and put some money towards a house deposit. I wouldn't buy a house outright, because in our area it wouldn't be enough for a nice place and it would be wiser financially to use the money for other investments than to have it tied up in property.

A car isnt relevant for me, as I don't like driving and prefer living car-free, but if it was necessary for your area or work, then a reliable car would be sensible. I wouldn't be bothered about a holiday or jewellery.

I would consider making larger payments into my pension for tax efficiency, and fill up stocks and shares isas for tax-free investments (and learn about investing).

@loveev as would I, however that isn't a doable thing, so it's about making the most of this surprise than not. She would rather it be used for the best, which is what i'm trying to do.

@lensen thank you, i definitely will be learning about investing, it is just completely new and something I've never been in a position to think about before

Yes , they would be pleased we will
Mortgage and debt free and make our lives will become a lot easier . There's been times when we have had nothing and it's been a real struggle .

I would put absolutely all of it as a deposit for a house. (I mean, I wouldn't now as I have a house, but previously that would have been my priority).

If I already had a mortgage, I would pay off a hefty chunk in order to save thousands of pounds of interest.

At the point I'm at now, I would put a lot into savings but buy a better car and have a few bits of work done on the house.

We should be coming into some money soon but I’m unsure as to how much. It would be amazing if it would be enough to clear the mortgage. That would be priority #1.

If it was as much as £200k. I would clear the mortgage, buy a new car and put the rest in savings, pensions and investments. I may keep a bit back to throw a party for friends or go on a great holiday.

If I were you OP, I’d prioritise buying property and clearing debt.

Depending on price, I'd consider using pretty much all of it to buy somewhere with as little a mortgage as possible. I assume your rent is likely quite high - say £1K a month. If you could buy a house such that your mortgage is very small (circa 300/400), that's an extra £600 a month you have to put towards paying off debts etc. Once debts are paid off, you can then put that extra £600 a month towards savings/car/ holiday etc or overpaying mortgage.

Thank you for these latest comments; I did some reading on premium bonds last night, so the 50k i was going to keep aside for emergencies will go into that

Need to read up on stocks/shares ISAs next...

Your emergency stash needs to be protected against having to pay tax on the interest. You can put 20k into an ISA in each tax year. It can be a cash isa (no risk, but low growth) or a stocks-and-shares isa (riskier, but usually a safe long term investment if it's in a global tracker fund). You can have a combination of both.

Martin Lewis did a recent podcast about premium bonds (14th November episode), which may be worth listening to: https://open.spotify.com/show/6tsU1ycENJzlaViEw0aAQq

@nextstepp thanks - i'll have to have a listen to that!
My only thought on that is would it be giable to do 20 in an ISA and then the other 30 in premium bonds? Then top up the isa in the next tax year i guess?

The tax year ends April 5th, so if you get the money before then you could deposit 20k in this tax year, and another 20k after April 6tb when the next tax year starts.

How much are houses in your area? I’d put a bigger deposit down and have a smaller mortgage. I’d pay 160k deposit.

10k car

5k holiday

20k rainy day fund

5k isa

House must be a priority surely ..

Anything else are luxuries , I'd use as much as I could to buy a house then work for the other things

If enough of a deposit, her mortgage should be much cheaper than rent and use that to fund luxuries

Have never seen the point of premium bonds. You might as well just stick it in a current account. If you’re lucky you might win the occasional 50 quid, but putting money in premium bonds in itself doesn’t get that money anywhere.

If you want immediate access to it then I would put it into a limited access account, so you still get a reasonably decent interest rate provided you don’t make more than the limited number of withdrawals on the account. But you can get to it, unlike a fixed rate account where you stash it away and forget about it for the fixed period.

Personally I would pay off my mortgage and then I would stick the rest into decent savings products. I would then either save what I pay out on my mortgage every month or I might even consider reducing my hours to go part time. But I’m a miser so I would probably do the former.

"Have never seen the point of premium bonds."

We put a £100k inheritance lump sum into premium bonds for a year (50k each). It was earmarked to pay off our mortgage, but we wanted to wait to the end of our fixed rate before we did that, and we'd already used our ISA allowance. If we'd put it into a savings account it would have made only slightly more after tax and I would have had the faff of having to fill out a tax return to declare the interest. We won something every month, but overall got slightly below the headline prize fund rate. It was fun to check the results, which counts for something. I wouldn't have kept it there long term though.