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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

To ask what sensible ideas you have re inheritance money

38 replies

jody991 · 12/10/2013 16:35

As the title suggests really!

I have recently come into quite a large sum of inheritance money (I don't mean to brag) and quite frankly am not used to having any at all Grin. I thought you savvy MNers might be able to advise me on where you'd put it (seperate account, building society etc) and clever ways to possibly invest it?

As I said I have never had excess money to think about and now want to do something sensible with it of course.

*Background info... I don't own a property (paying of a mortgage would obviously be most peoples first option) - I rent privately and currently receive Housing Benefits to help with the costs. I'll be retiring in the next 10 years if that makes any difference.

TIA

OP posts:
ThankGodItsTuesday · 12/10/2013 16:37

We really need to know how much.

Reality · 12/10/2013 16:37

YOU need to tell the benefits people, first of all.

How much money are we talking about? I'm sorry for your loss, by the way.

AuntyEntropy · 12/10/2013 16:39

Presumably this will wipe out your Housing Benefit entitlement?

MrsBucketxx · 12/10/2013 16:40

Anything over 16 thousand could affect ypur benefits.

I would be getting on the housing ladder if you coukd afford it. Maybe right to buy.

Or you could look into annuities for your retirement and stay put.

RandomMess · 12/10/2013 16:40

Yep my first concern would be housing benefit entitlement!

parkingwoes · 12/10/2013 16:44

You need to tell us how much.

MorrisZapp · 12/10/2013 16:49

Buy a house seems the obvious answer? What do you want to do?

Original poster
jody991 · 12/10/2013 16:49

Over 16K so yes definitely likely to effect benefit entitlement. We are talking around 80K Blush I was possibly looking into getting a mortgage so it is invested. Unfortunately I don't particularly want to move and could never afford to buy in my area... Possibly "Buy to rent"? Has anyone got any experience with this?

OP posts:
SDeuchars · 12/10/2013 16:50

How much is the large sum (e.g. is it around 10K, 50K, 100K, or more)? Have you taken into account that you won't get housing benefit if it is more than £16,000.

If it is enough to buy a flat, you may want to do that - you could live in it or rent it out if the rent would cover your own rent IYSWIM.

Other than that, an ISA is a tax-free way to invest £11,520 (see MoneySavingExpert), assuming you pay income tax.

Original poster
jody991 · 12/10/2013 16:53

Thank you Sduechars

This is along the lines of what I was thinking about initially. I haven't given it much detailed thought yet so thought I'd throw it out yo the jury to gather some ideas.

OP posts:
RevelsRoulette · 12/10/2013 17:00

Sorry for your loss.

First of all, inform benefits so that you can be reassessed.

Then it really depends how much it is. You'll obviously have to live on it, but if it is a huge sum, then you could invest some so that it should bring you more when you retire.

RevelsRoulette · 12/10/2013 17:02

xpost, 80k isn't really that much and you have to think whether it's really worth sinking it into a house at this stage. How much benefit would you really get from a house? It's just further debt, isn't it?

I'd stay put, renting, and invest it so that it will give you some income.

People think that a house is an asset when really it's more of a liability Grin

PottyLotty · 12/10/2013 17:07

I'd suggest premium bonds. You can invest up to £30,000 and every month you get the chance to win up to £1,000,000. Grin

I hold a few thousand pounds for my children and we win at least £25 every month. The biggest win I had was £1,000 which was fantastic although I just bought more bonds with it rather than spent it.

Perhaps you should see a financial advisor who can give you the best advice on investments.

lljkk · 12/10/2013 17:13

I wondered if OP could buy a property, get a lodger in to help cover the mortgage, somehow juggle it all. Depends on her needs & other income, property prices in her area.

BrokenSunglasses · 12/10/2013 17:16

Will you be allowed to keep your council/HA home if you own property elsewhere?

I'd there any chance of you being allowed to purchase the property you're already in?

I'd go to your bank and ask for advice on investments, but you will need to do your research and learn about financial stuff otherwise you'd have to pay someone to do it for you which then doesn't seem worth it. Premium bonds are with looking into.

Blondeshavemorefun · 12/10/2013 17:17

I also second bonds or least leave some in there, you never know you may win big :)

I don't know much about benefits, but im sure if you suddenly got £80k you wont get hb anymore

renting is dead money so I would seriously think about buying somewhere and pay the rent towards the remainder of the mortgage

jollydiane · 12/10/2013 17:19

I am sorry for your loss.

  1. As others have said declare your income.
  2. If you have any debts then put them in order so the most expensive interest loans are paid off first.
  3. Once you have done this have a 'rainy day' account which is about equal to 3 months salary. Perhaps also consider if there are any major expenditure that you will need income for. There is little point investing money in the stock market if you need to pull the money out to cover an emergency.
  4. Next work out what level of risk you want. You mention that you are 10 years away from retirement, however it is not clear how you are going to fund your rent or retirement once you have retired. Is it worth moving to an area where you could buy a flat so that you will not have to find the money to pay for rent in your retirement, otherwise how will you cope IYSWIM?
11. If after considering the above I'd consider a Cash ISA if you want zero risk 12. If you want higher risk (e.g. you could actually get less than you paid in) and can invest between 7-10 years consider an Stocks and Shares ISA, but be aware of the charges that some fund mangers charge.
tracypenisbeaker · 12/10/2013 17:20

If you look hard enough, maybe you could find a dinky cheap flat that needs work done, and maybe have that as a project?

Original poster
jody991 · 12/10/2013 17:22

lljkk flats are around 500-600K here (650K for somewhere big enough to move a lodger into)

brokensunglasses I was never housed in a council/HA property so I rent through a private landlord. Purchasing would be up to the landlord but it's a flat within a house (and I could never afford the house!)

I'll look into premium bonds - thank you! This is all very new to me so all your advice is much appreciated.

OP posts:
Reality · 12/10/2013 17:25

Where the hell do you live?

Shock
jollydiane · 12/10/2013 17:28

Shock . Is commuting an option?

Original poster
jody991 · 12/10/2013 17:33

House does buying in a cheaper area and renting it out (to cover the cost of the mortgage and the HB part of my current rent) and moving into it for retirement. Does this sound feasible? Confused

OP posts:
jollydiane · 12/10/2013 17:34

I'm not sure about premium bonds. calculator

Original poster
jody991 · 12/10/2013 17:37

jollydianne tell me about it!

I have two DDs who work/study here so I cant expect them to also pay to commute. Their job/uni is specific to our area too so they couldn't really transfer. They are in no financial position to move out of home just yet either!

OP posts:
Talkinpeace · 12/10/2013 17:39

Premium bonds are no longer a good bet : the return rate is lower than some savings accounts.

Fill up your ISA allowance
and then to be honest, I'd say start a good portfolio of shares that will give you regular dividends and up to £10k a year tax free capital growth

property is only a good bet if you understand the tax implications as the market in many ears is no longer good

personally I'd buy a plot of woodland, sell the coppice rights each year and use it as my own private campsite for the permitted 30 days a year