What do do with inheritance?

[RiderGirl]

My dad very sadly passed away earlier this year, and once everything is settled with his estate I will be receiving some inheritance money from him. I'm obviously not quite sure how much it will be currently but I imagine around £35-40k. He had said previously that anything left to me he'd like me to use as a house deposit which would seem to be the sensible thing however we live in a housing association property and a mortgage locally would almost certainly be more than our rent. A few of my friends have said they wouldn't bother buying a house with it. I'd like some sensible advice - I've never owned a property and am aware that we're very lucky to live in a HA house too.

That’s a good amount for a deposit however if you are happy staying where you are then don’t move.

dh uses his inheritance each year for our summer holidays. So our summer holidays are guaranteed for the next few years. Making memories with the children.

Buy the house. That way you’re investing in your own property not someone else’s. You’ll have an asset you can sell. Once you pay off your mortgage your accommodation is ‘free’. You can do what you want to it within reason.

I do not think you are in any way obliged to use the money for a deposit on a house. Your father was clearly wanting to see you securely settled and you feel you already are in your HA property.

Stash it away for the the day when you might feel you want to buy.

I would invest it, nothing risky, even stocks and shares ISA until you find something worthy to spend it on.

what I wouldn’t do would be spending the money on holidays or treating yourself. That is a slap in the face to the previous generation who worked hard (or lived with less) to ensure they could leave something to their children.

Invest it for now, and reflect slowly and carefully.

You don't have to buy a house, but it might be a good thing to consider it carefully.

Why would it be a slap in the face to whoever left the money?

My mil specifically said , make memories with the money.

I think as you are in a HA property then I’d invest the inheritance instead.

Go on facts, not assumptions. Wait and see how much you have, then see a mortgage advisor, and see how much more it would be.

I'm really sorry about your dad - I hope you're doing ok.

Put 20k in an ISA now using you 26/27 allowance put the remainder in the 27/28 year next April's.

Use vanguard or AJ Bell stick it in something like lifestrategy 60 or lifestrategy 80.

I'd also consider using some on an amazing holiday - Japan / Safari whatever floats your boat.

Thank you all - I definitely wouldn't be frittering it away, it's a sum of money that even though "small" is not an amount I'd ever see again. I'd not though about an ISA which could be an option while we think about it. I'd hate to rush into something I'd regret, equally I know my dad would have loved to see us use it for a deposit and we're on the cusp of still being able to get a 25 year mortgage (early 40s). Everything has been a shock as it was unexpected, I miss him dreadfully but getting into a more normal swing of things now

I’d stay in your HA property if mortgages are more expensive where you live. Houses are extremely expensive. Anything that needs doing will be on you My mum lives in HA and gets all sorts of care and repair done very quickly at no cost to her. Don’t under estimate the additional costs of owning your own home. A 25 year mortgage at your age isn’t a great thought.

ISA and time to think.

There are benefits to renting from a HA but also benefits to owning. I don’t look on my house as an investment because I live in it. Now the mortgage is paid off I can stay until I die if I wish. Do HA ever move people about? Legislation can change. I can see lots more small HA apartments being built in the future and people having to leave family size homes. People may not like it but I can see that happening

That is fine. If she wanted you to do memories with the money you can spend it on that, but if as many people who are not loaded she had been saving the pennies to ensure some provision for her children once she was no longer around, such as saving for a house deposit… spending it in superfluous things wouldn’t be on but, legally speaking, people can do whatever they want with the money they inherited, no restrictions on that.

Giving up social housing isn't to be dons lightly, but neither is the concept of home ownership.
Mortgage might be "more" but effectively you are saving lots of that through paying down the loan, rather than paying rent for no return.
Have a proper look and do the maths. Could you buy a comparible home? What would the mortgage etc be? Do you have a stable income to cover it ( id leave a contingency fund in savings of a year's mortgage payments). That is important because UC will factor in rent if you fall on hard times vs nothing for mortgage payments).
An alternative which might fit with Dad's wishes is to maybe invest £10k for each of the kids in stocks and shares to create a long term deposit for them.

Stay in your HA and put it in an s&s ISA unless you think youll need somrthing for emergencies even then put a small bit in a cash isa.
even if you never buy a house its a good idea to get it invested and growing.

It's tax free wrapper and you can use it to top up your pension - I also wouldnt be surprised if the government dont start looking to do away with it in coming years. It's a v advantageous way of saving.

Mine has been making between 8-36% annually - Compounding is very powerful.

Thank you, I'll look into s&s isas - I literally know nothing about any of this so all advice is welcome!

Moving forward, will you both have a good pension that'll cover rent, all bills, support and a few treats in old age? If the answer is 'no' or it'll be tight, then if you then own a home in later years, you won't have to worry about rent.

Also, you'll have an asset - if you've got children/close nephews/nephews or other family, would you like to benefit them after your death to hopefully enhance theirs lives/give them more security?

I would certainly put it into an ISA until you decide what to do with it.
Do you have any other savings? I would feel quite nervous to put everything into an illiquid asset (property). Both approaches have positives and negatives.
Over long periods, the stock market generally performs better than property as well. So continuing to live in your current home, and investing the lump sum in stocks and shares might be the most financially adventageous.
But you'd need to do the sums, review your overall financial position, financial safety net, life expectations and desires, etc.

If you like where you live then stay there. Have a nice holiday and speak to a financial advisor about the rest.

We do like where we live, we'd only moved in two days before my dad passed away and although we'd be happy to leave if we did buy a house, this house is perfect and in a great area - if we did buy we'd be unlikely to afford anything near as nice! But we don't own it and rent every month is dead money. It's a real conundrum.