What type of finance professional does my dd need to talk to about how best to use inheritance re uni fees

[TaffetaRustle]

As above. She's in the lucky position of having a small inheritance from her grandad of 90 grand but unlucky in that she has no grandparents.

She's 17 and looking at uni how best to allocate the money
It's currently invested in index funds and a small amount un a cash isa

Thanks

Id speak to an independent financial advisor.

Itll be a good relationship for DD to start early as she will be "hopefully" more financially literate than her peers.

Its something I wish id done long before hitting my 40s - i always thought they were for people with loads of money
They also arent that expensive...some even are free and get their cut from the policy makers.

If you are in NI or want to deal with someone over zoom i have a recommendation.

I had a friend in your daughters position who drank and clothed herself well through uni and came out with nothing to show for it.

Personally I wouldn't use it for university fees. There are loans for that and if she changes her mind later she can pay them off. Getting 90k back will be a lot harder as she'll need to earn enough to live and save.

Having 90k is a great house deposit and will really boost her financially in the long term. I would suggest a lifetime ISA for some of the money.

Take out loans for university and use the 90k to buy a house.

I think she should take out a tuition fee loan, but use the inheritance for her rent and anything else she needs whilst she’s at uni so she’s not relying on you. Then she can use the rest towards a house once she’s graduated and has a job.

If I were her, I definitely wouldn’t use it for uni fees. If she doesn’t want to leave it invested or needs money for uni, I would use it to see if you could buy a flat where she could live with housemates. Their rent will pay the mortgage. Dd has no housing expenses. This frees up time and money for focusing on uni. The property becomes a good source of income while she bops around after uni travelling and living different places, assuming there is capacity to manage it by someone or you pay for property management. Great equity for her first proper house purchase in 10 years time when she’s ready.

Some good ideas here thank you

Lucy shark there are different types of ifa so I'm not sure which one to look for

She's extremely financially savvy and cautious already, has a pt job of 300 per month and spends only 30 a month.

So I've got absolutely no worries about her wasting this money.

Halving the costs sounds like a good idea loan for half and pay half.... I'm also trying to encourage her to go somewhere where she can commute to uni.

I don't think she would have the capacity to buy a flat and all the stuff that goes with that and study.

I am going to agree with everyone else do not use it to pay for uni unless it is just tuition fees. I am not sure how maintenance loans work when the student has that sort of money.

Ds graduated last year. He earns £35k on a graduate salary and his student debt is about £42k which is comprised of tuition fees and minimum loan for 3 years, we topped up the rest. How long do you think it would take him to save the £42k living at home with no rent, no food, just a bit of socialising on that £35k? If we had £42k we would have given him this as a house deposit, not paid for university.

Accommodation is the most expensive part of university. Ds2's first year halls are £8k. If you can avoid that somehow either living at home or buying a property to live in whilst at uni that would be what I would be speaking to a financial advisor about.

Invest it and use it for a house or an emergency fund for retraining/unemployment/maternity in her 20s or 30s. She'll need a job at university anyway for her CV so if she's not a big spender she'll be able to live on that. She can use it to pay off the student loan later if she needs to.

We did that, which let us by a flat with a tiny mortgage. That in turn let us take career risks, choose passion jobs, and now we can both work 3 days with the baby whilst still going on holiday

Thing is, the way the loans work is that lots of people never end up paying it all back, in which case you may as well borrow as much as you can, because repayments are based on income not how much you borrow.

eg (these numbers aren’t correct but illustrate my thinking)
borrow just for tuition fees - approx £30k, use inheritance for living costs
Pay back £100 per month for 35 years or however long - still haven’t paid it off and it gets written off. Inheritance at least partially spent on living costs so much smaller lump sum.

borrow for fees and living costs - approx £50k, save inheritance
pay back £100 per month for 35 years or however long - still haven’t paid it off and it gets written off. But you’ve still got the inheritance as a lump sum!

the balance is different if you end up as a higher earner and are likely to pay it off, because of the interest. In that case using the inheritance makes more sense.

Yes I agree she needs some advice from a financial advisor.

I also agree depending on what field she is planing to be going in to after studying it might make more sense to get the student loans

I don’t think she needs an IFA tbh. Take the loans for fees and maintenance - absolutely no point using her inheritance for those now. Put the max she can into a LISA and cash ISA each year (compare rates using basic comparison site, read Martin Lewis etc), then the rest in stocks and shares ISA.

And don’t encourage her to go to her local uni, it may well be a poor one - she should go to the best one she can for her grades.

@titchy thank you.
Luckily our local ones are excellent and we are close to London.
I'm not sure about a Lisa, I've not looked into it properly but I hear things about being charged etc

@modgepodge very true.
Thanks

@Paaseitjes wow! Very Clever moves there.

It's invested at the moment in a stocks isa.

I don't think she would have the capacity to buy a flat and all the stuff that goes with that and study.

Would there be that much to actually sort though? Assuming she’s planning on moving out for uni and paying rent it seems crazy to pay rent when she could be paying off a mortgage, isn’t it something you could help her with?

For general finance advice you could try Martin Lewis's website too. That often has good options for savings or investments etc and compares different choices

Brilliant ideas here thank you.

We need to find out if she can get loans with that money. But half and half sounds like a good Idea

@Changingplace
Possibly but I think that could turn into a mill around her neck especially if she doesn't want to stay in the town she's at university in

Definitely keep it for a house deposit. It will be life changing.My DS is in London and they only young people who can buy anything are those gifted large deposits. Everyone else is stuck in house shares.

Don't buy whilst at university. Wait until she has a job she wants to stay in.

Everyone can get the minimum maintenance loan.

Is your household income over £60k? If so, she should only apply for the minimum then you / her will need to work out how you will find the remainder! (Unless she lives at home, in which case the 'At Home' loan will likely be enough to live on).

I agree with all others, drip feed into ISAs, don't commit it to covering Uni costs until she knows she will be a high earner and pay it back. Keep it aside for a house deposit.

No point paying off some of the loans with half and half. She’ll still have to pay the same amount back each month regardless.

All students are entitled to loans. It won’t depend on her savings but it will depend on your earnings. If she only qualifies for minimum loan, you will be expected to top her up.
It cost us about £500 per month. some parents can’t find extra money and the student has to work, have a year out to save up etc or they have no choice but to study locally. I think it would be reasonable for her to use her savings instead of this parental top up, if you decide to do that, but definitely take all the loans you can as per Martin Lewis’s advice, and use her inheritance for a house deposit.