Inheritance- what to do with it?

[Lostintheforesttoday]

Hi all. Posting here for traffic. I’ve just inherited some money from my parents - around £190,000 after taxes/ expenses. Please don’t tell me I’m lucky as I’m still really traumatised and devastated by my Mums fairly recent death (suicide) and I’d swap any amount of money to have her back, in a heartbeat.

But I can’t, so here I am, someone who has never had a pot to piss in before with that money and no fucking clue what to do with it. I have a house already that I don’t want to move from or change. I have some student debt I want to pay off, ( my own and my two eldest children’s) - around £20,000 total, plus I want to put some away so my youngest 2 DC (11 and 12) can go to Uni if they want.

Other than that I have no clue what to do with it. I’m currently Re-training for an NHS career but on a year off due to health issues. When there I lived on an NHS bursary and wages from my part time jobs. During the year off Uni I was living on my wages topped up by tax credits (that have now stopped).

I’m 41 but have no pension so am aware I need to do something about that. I know I should get some financial advice but find it very difficult to trust people tbh. I also have quite a history of MH problems (BPD and PTSD) and can be quite impulsive and not always very rational, and I’m scared I’m somehow going to blow it all on sod all or lose it all by making bad decisions. That really scares me as my Parents worked hard for that money and I’d feel like I was letting them down.

Does anyone have any words of wisdom or advice to offer. I feel completely out of my depth, and also that I don’t deserve it as I haven’t worked for it. I’m also worried that my ex husband will make a claim for some of it - we’ve been separated since 2008 due to his violence but are still not officially divorced as I could never afford it. I know my Mum hated him for what he did to us, and that she wanted to change her will in case something happened to me and he got my share (though she never got around to it).

Apologies for any spelling/ grammar errors - I’m on a very small and very crap phone!

Do not buy a holiday home - yes nice to have but complete waste of money!

I read one bit of good advice on this topic : don't make any long term decisions in the first year when you're still raw and grief stricken. Emotionally charged times aren't good to make big decisions- put it somewhere safe for a year and forget it exists. I'm so sorry for your loss

Another vote for premium bonds at least until you decide what to do with it. I wouldn't pay off kids debt either but maybe get some bonds in their name instead. You've got to be it to win it. sorry about your mum x

Shambu - but HL do not only do wealth management! You seem to be saying that they only provide wealth management and only for people with over 100k.

Read their website please - they offer much more than just wealth management. Many many of their customers are, I am sure, like my family, investing their money themselves via the HL platform. Picking their own funds and investing via an ISA for the tax advantages. We have never used their wealth management service, despite DH and I having about 700k invested, with DC having another 100k plus

Oh and ISAs are (or should be) an integral part of wealth management - it is not one or the other. I would be amazed if HL wealth managers suggest that anyone hold S&S funds without them being in an ISA wrapper, as it offers tax advantages.

Do not buy a holiday home - yes nice to have but complete waste of money

Worse, they cost you more money in long distance management and maintenance.

Just a parting comment to Adnerb95 who posted the following:-

So glad to see that you have such extensive experience of IFAs that you - with no qualifications or authorisation - feel entitled to give a complete stranger, whose circumstances you have almost no knowledge of, detailed financial advice.
How irresponsible.

I have not provided the OP with detailed financial advice - that's ridiculous in the context of a thread on MN. I am however an experienced investor both in property and in funds via HL and BestInvest (which offers the same service for better rates). I'm a veteran investor and I am trying to help the OP.

I do believe that mine was the first post urging the OP not to make a decision at this time. One very specific area in which I am trying to help the OP is to be wary of IFAs. I do have experience of IFAs and this is an area where an inexperienced investor can go badly wrong. She would be better trusting to her common sense IME.

Sophiedog

Where have I ever said they only do wealth management? I'm well aware they offer other services. You've simply misunderstood my posts.

I don't need to read their website, they manage my parents' money. I have meetings with them x times a year, as my father has early stage dementia.

Please do not take financial advice from here. One of the most important factors before providing sound financial advice and planning is "know your client"

And yes, I'm an Adviser too.

OP, l am sorry for your loss. As numptynuts has said.

I'm glad I've ruffled a few people about the independent financial advisor thing. It's completely a situation of the Emperor's New Clothes. Most of them have no real education in the thing that they are advising upon. IMHO it's the next financial scandal after PPI. IFAs don't have to be graduates, the exams they have to pass are laughable and TBH it's just like facing a shoe sales person from Clarks. They have not the first clue.

Experienced wealth managers are an entirely different kettle of fish

Get going with a divorce first and foremost.
This is what I would do with £190K : -

(1) Pay off your 20K personal debts. Don't pay your older children's debts off.
(2) Pay off/down your mortgage (assuming you have one).
(3) Start a pension and put the maximum you can in for the tax year.
(4) Start reading the financial sections of the weekend papers/online and educate yourself about ISAs, funds and stocks - take your time.
(5) Open an ISA, choose some funds after the above research, invest your £20K allowance for this year.
(6) Open JISA's for your younger children and invest £4260 each for this year.
(7) Consider gifting your elder children the equivalent sums (in order to be fair!)

Do the same again in the new tax year next April. If you still have a significant sum left, consider other forms of investment to spread the risk. Educate yourself first before you see a financial adviser.

Thesearepearls I think you need to read up what’s happened to regulations since 2013.

OP as you can see many, many differing opinions on here. Write down your circumstances and go and see a few IFAs around you. Look at the FCA or PFS websites. The firms on these websites are regulated whether they are IFAs or wealth managers. Most offer a free initial consultation - tip - if you give them a bit of info beforehand you will make the most out of this time. Ask about fees - they should be transparent. You should always know exactly what you will be paying. Good luck.

Oh let's be clear about what has happened to commissions

If you’re getting advice on: mortgages, equity release, general insurance (like travel or home insurance) or protection insurance, such as term life insurance, advisers can still be paid commission.

The bloke who sold me on my ISA is still getting paid trail commission

Don't get carried away with the idea there is no commission

There are still plenty of shoe salesmen out there. All operating on commission. All ready to mislead the OP

And as far as the OP is concerned she would be better off burning £10 notes rather than consult an IFA. You all think that consulting an IFA is a sensible choice. But how many of you (apart from the IFAs on this thread) have actually consulted one?

@Thesearepearls

Are you on glue?

No. I'm just an experienced investor

it's just a thing - there's so much stuff around to trap the unwary - and tbh IFAs are not the worst of it.

One thing you have to look out about is churn. What is churn? Well it's kind of an inertia thing. So people buying into funds can subscribe at particular rates and hope that their funds will give particular returns.

As an investor, you have to go with the long term so of course if a particular fund gives poor returns, then you have to give it a couple of years. But a lot of these funds rely on churn or inertia. So they can give bad returns knowing that investors will hang on in there - because investors invest for the long term. You have to watch this.

Investing is not actually hard. You just have to be aware of certain things. Some of it is about knowing the language and understanding what it means. You always have to keep track and I keep track of investments daily.

First time I’d agree with you pearls I’d never set a foot near a financial adviser. The only advice they’ll give will line there own pocket.

Thesearerealpearls all IFAs need to be qualified to Level 4 in the QCF. As with all professions, some advisers are good, some aren’t so good. Please don’t give the imporession that they’re all rotten apples. Increased regulation and qualification levels over the last ten years or so have improved the quality of IFA practices and weeded out a lot of the dodgy ones. They still do have a poor name, but that’s mostky unwarranted these days.
OP, I am sorry for your loss. How utterly devastating.
Please do take some advice, especially legal advice. Unfortunately, as you are not divorced, I think you may find your ex does have a claim over the money, as all assets of the marriage will be split, and you are still married.
Don’t rush into any decisions.

the area the OP needs advice on - holistic advice, investments, pensions- does NOT involve commission. So, stop misleading thesearepearls !!
Also, if someone has experienced poor advice from a solicitor, accountant or doctor, it is still bloody irresponsible to tell them to ignore the experts.
You seem a little over-invested.

Oh and your definition of churn is completely wrong - so, not such an experienced investor!

I’m very sorry for your loss OP. Personally I don’t use a financial advisor but that is because I’ve started small with investments and I’m learning while my capital is not huge. In your circumstances, i’d have wanted professional advice. It is very different having sudden access to a large lump sum and aiming to preserve capital versus seeking growth on a small sum. You’ll also need to think about the most tax efficient ways to invest and use personal allowances. Again that is easy with small sums- use the stocks and shares isa allowance but more complicated as you’re getting a large sum at once.

While tempting to take advice from mumsnet, it isn’t the best place. Your circumstances and attitude to risk are unique to you. What works financially for some might be terrible advice for you.

I also think lots of the previous posters are not taking into account your mental health. My mother is schizophrenic and when she is high she can be very impulsive with spending. A consideration for you would be whether you want some of the money tied up or put into a form that is harder to access. I’d also caution against doing too much DIY investing if you are impulsive. When I first started I found it quite addictive. I looked at my app multiple times of day and I had to stop myself from buying high risk shares which would have basically been gambling. It is very easy to trade now via some of the platforms and if you are prone to impulsive behaviour it might not be the best combo. Investing via an IFA might provide you a degree of protection from meddling.

Have a look at money saving expert re paying off student debt. It is generally not advised but it does explain why very simply and clearly.

Don't know if anyone has mentioned a sipp?

It's a self invested personal pension.
You put in up to X amount... and government automatically tops that up by I think 25 per cent.

OP I think your right right to ask here firstly. Tapping into the good old hive mind. I spoke too it's a while ago and he said I couldn't have an sip which is rubbish. You can't solely rely on anyone. Always chat first and see how willing too be helpful people are.

The idea with any investment is too beat inflation.
Spreading it around is good the great thing about property is that, you can put that rent into stocks and shares isa.. and a sipp....as well as keeping your capital sum increasing in the property.

Set some aside for silly ness.

Put some into a sipp. Some into stock and share isa ( use calculated too work out fees)

Look into property to rental.

In a sipp you can't touch the money until your 55

I inherited a significant amount when I lost my DM tragically too. We paid off the mortgage (hadn't much left), changed my car, got a new kitchen, saw an IFA and have invested the rest (including £10k in premium bonds ) which has bagged me over £1k winnings in six months! I aim to retire at 55 so more long term gain really.