To wonder what to do with the money

[Quandary2018]

Parents have very generously gifted me 25k which, while a substantial sum of money, is not enough for me to use as a deposit on a house as I’m a single parent who works part time and I simply don’t earn enough to get a mortgage so- what do I do with the money?
Am thinking maybe some savings for the kids and a holiday but that seems wasteful so what would you do with 25k that isn’t mortgage related

I would use 5k on a holiday and then bank the 20k for when you are in a position to get a mortgage. You never know what the future holds best to be prepared.

Maybe this sounds boring to you but if it's not enough for a deposit now, why not put it into a (hopefully high-interest) savings account and just carry on adding to it until it is? :)

I agree with zurigirl

I know you said not mortgage related but depending on property prices where you live it might be enough to get shared ownership? Otherwise, do you plan to go full time in future? If so I would save it as it’s your best chance of having a decent deposit.

Save for a mortgage. No brainer.

Invest it and either use it for income to supplement your ongoing needs, or capital for when you are in a position to get a mortgage.

Have one fabulous holiday and lock the rest in a bond account xx

Could you spend part of it on training to get a qualification(s) to increase your earning power?

Investigate shared ownership. With kids that’s a no-brainier if you can get a SO property and not be at the mercy of being priced out or made to move by your LL.

You can put up to £20k in an ISA.

As others have said, spend a little part on something wonderful and save the rest.

And don't say "gifted" because it makes my bottom clench (appreciate I have issues).

I’d splash out with a few hundred but I’d save the rest.

Have you had a mortgage before? If not can you put it in one of those home owner savings accounts where the government match a certain amount for every bit you save? I think it needs regular savings but if you were savvy you could just transfer a certain amount every month from a different account

I’ve looked at shared ownership/ help to buy etc and honestly, on my salary, I’m still years and years away from being able to get a mortgage
Working full time is a good 6 years away because of the cost of childcare and I have very little left at the end of each month to save
House prices are rising where I live- currently around £250k for a 3 bed house in my area but most I can get on a mortgage is around £100k so I’m way way off

Put into one of the ftb isas where the government adds to it when you buy. Use it as the base tonsave your deposit or are you saying you won't get a big enough mortgage based on your earnings multiple? There will be a time when you can go full time so keep saving

Premium bonds? Safe although you might get a higher return in some savings accounts you never know you might be lucky and win extra.

Think it's around a week to withdraw the money so not locked in either.

I’m assuming you get some sort of benefit if you’re a single parent and don’t earn enough for a mortgage, if that is correct I would have your parents put most of it in a trust for you until you are in a position to buy otherwise you will lose and housing benefit and the like £ for £

'Gifted' is a financial term. If / when the OP uses it for a deposit she will have to prove it was 'gifted'.
Op, are you receiving any benefits that are means tested! If so, you have to declare this gift, otherwise you could be charged with fraud.
If not, put it in an ISA specifically to be used for a mortgage deposit and it will be increased by 25% after a year, but also give yourself and your dc a little holiday :)

Yep I get housing benefit and tax credits so will lose them as soon as I bank the cheque

Have you got a pension? If not I’d whack it all in a SIPP and forget it exists, you will really thank yourself for it in retirement.

Otherwise I’d think about an ISA, probably an S&S ISA, and in the future it could be used on property (when income better, you can add to it or house prices fall/you move to a cheaper area). Or one day it could be the deposit on a flat for you when your kids leave, if you let it grow in an ISA.

But could you buy a one bed flat or similar for £100k as a buy to let as an investment? It's a way of getting a foot on the property ladder and you will make money on it.

Then don’t bank it :/ I’m sure your parents want to gift it you for something substantial, not just to replace working benefit, I would ask them to set up a trust

TBH it might be better for your parents to put this money into a high-interest savings account on your behalf. Because, as PP said, you'll lose all your benefits when you bank the cheque, so the money will just go on everyday living costs as your wages are so low.

Why are you looking at 3 bed houses? How many children do you have? See if you can find a 2 bed flat that's nearer your budget. You have to start somewhere and by paying off a mortgage, rather than rent, you'll be better off in the long run.

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