To ask what sensible ideas you have re inheritance money

[jody991]

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 . 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

Premium bonds aren't really worth it unless you're a higher rate tax payer, and even then their return probably won't keep pace with inflation.

All I can say is I have only a few thousand and I win every month. It may only be £25 but I do win regularly which is a lot higher than any bank interest.

My in-laws have the full £30,000 each and they win between £200-500 every month because the machine that picks the random numbers finds it difficult to jump more than 30000 numbers without picking a number. Also where else could you potentially win £1,000,000 with just £30,000 invested ?

Shared ownership housing might suit you. You put down a proportion of the cost of the property and then rent the rest or maybe take a mortgage on the bit that isn't the deposit.

Worth looking into I would have thought.

Renting a property is not risk free. There are many things to consider especially the tax liability not just from the rent received but all when you come to sell the flat.

You also need to be in a position to quickly fix things if a boiler etc goes wrong and be able to cover a situation when the tenants default or if the property is unoccupied.

I'm sorry for your loss.

If 2 bedroom flats are 650k where you currently live, then it's pretty obvious you live in London. Take a 20 minute bus ride and you will get a lot more for your money.

As to notifying the council of your change of circumstances, please please don't be tempted to sit on it and do nothing. There are mechanisms within the tax system and the treasury and the banking system that will notify different departments when individuals inherit money, and they will find out. They can be pretty ruthless even with those who intended to come clean but never got round to it.

I think I'd agree with LayMizz and seriously look at commuting before ruling out buying a property. If you stay where you are I assume that you must have a hefty rent to pay especially if the HB stops or is at least reduced

Re the premium bonds question. If you have invested £30,000 and you are winning £250 per month (e.g. £3000 per year) then you are lucky - only 0.0877% of people who have put £30,000 in premium bonds over 1 year win more than £3000.

I would suggest that sooner or later your luck will run out (law of averages and all that).

Most months I win £25 so maybe £450/500 a year

Better then interest and I just reinvest

Wow at £600k for 2 bed flat

Blondeshavemorefun
Most months I win £25 so maybe £450/500 a year
your maths is interesting ..... £25 most months is £250 a year, not £500
and if you have over £15,000 in here, you'd be better with a normal savings account

If flats are that much you must either be in London or another southern city with cheaper areas and where commuting is more like half an hour on reliable bus routes than two on rural routes. I would second the idea of buying a rental property in a cheaper area and using the excess on the rent to slowly pay down the mortgage. That is assuming you don't have outstanding debts, which should be dealt with first. However cookie crumbles you are going to lose housing benefit, so its a good idea to have a long term housing plan. Problem with investing is you will lose benefits without having the double benefit of a property to make up for it, and I can't think of an investment market which will offer better ten year returns than property in the south east.

Whoops. Can't add up. Brain tired x

Wow. 80k where we live would get you a 2 bed flat rentable for £300 a month return, and £25k in change to invest elsewhere....

Yeah ok not the best penthouse, but my neighbour does just this with a £50k inheritance. Its all dealt with by a lettings agent she has no need to ever visit. Private tenants on a 12 month contract. In 3 years she's rented it out consistently without a break.

To put it in context, our other neighbours gorgeous 4 bed Victorian villa with garden is on the market for £160,000. So to me, £80k on property is a big amount to play with and get a return from.

Just depends where you want to do it! (And no its not a crap area at all, listed buildings and beautiful conservation area.... Just not in the south!)

I was lucky enough to be in this position and decided to rent out the property family currently lived in and have moved to another. The rent we get is more than a bs would have given us. We also did quite well with premium bonds but had to take them out again to pend on new house.