To not know how to use this money in the best way?

[FinanciallyUnsavvy]

Long story short; got divorced and have basically been left with £45k in savings. In a very fortunate position to be mortgage free but I don’t have any pension to speak of really. Started a new job in the NHS just over 2 years ago so have joined their pension scheme but at 42, I know I’m unlikely to be able to build much of a pot before retirement particularly as I am currently only a Band 2 and part time at that so I only earn around £13k. My maintenance package from Ex is very good though and I manage to save around £5k a year from it. I cannot rely on this long term though as I very much suspect he will take me back to court for a variation once he has adjusted his business accounts to look like he can no longer afford the payments (he has only been paying for just over a year and has previous form for stopping maintenance before it was court ordered).

This is far, far from a stealth boast as although I appreciate I am in a very fortunate position financially, I also lost an awful lot by my marriage ending through no fault of my own (high earning ex had an affair). I have 2 young children and they limit my working ability due to lack of childcare options (we live very rurally) and my ex only has them EOW and refuses to have them during school holidays.

I have no idea how best to make the most of my financial situation. My savings just sit in a savings account, earning virtually no interest and although it is a lot of money, it’s not enough to see me through retirement either. I am scared that I could potentially make better use of it or maybe I actually can’t and I’m just better off to keep adding as much as I can to it?

I know it’s a bit of a first world problem to have but it does play on my mind that I could be doing more so would very much appreciate some advice.

Can you invest it?
I’d personally put it in an account and get something in writing that protects it. Use it for your retirement or savings for emergencies and move it on to your children when you pass. You don’t have to do anything with it just because it is sitting there, it’s a decent amount to live on when you’re in a position to not work any longer.

In your position I'd put it down as a deposit on another house and rent that out. You might not make much money out if it in the short term, but someone else would be paying your mortgage ultimately, and with a fair wind, after a while it'll be a source of income (once the mortgage is paid off) and it should increase in value.

Would it make sense to put that money towards moving somewhere which makes working easier for you?

What The Reef said use it as a deposit on a buy to let

I've got a similar amount in Premium Bonds and my winnings over the last year have been over 2% so better than most savings accounts , plus there's always the chance of a big win. The money is safe and it's easy and quick to cash in if you need to.

Use some to move to an area with better working opportunities.

Lifetime ISA for the rest.

Crack on and increase your earning potential.

Buy to let is not a licence to print money - you need to be able to take the risk of a gap between tenants/tenants trashing flat/surprise repairs to the boiler/roof/drains.....very high stress potential.

I appreciate I am in a very fortunate position financially

You're not, though - you're half way through your working life with no pension. Honestly, I'd strongly consider putting almost all of it into a pension.

sounds like an independent financial advisor would be your best bet - evaluate your savings, pension, assets and how to best acheive retirement plans.
Ask around and see if anyone you know has an IFA they'd reccomend or look on line - unbiased.co.uk may be worth a look.
I think regulations on professional bodies have changed recently, not entirely sure of current body to contact.

Not putting anyone here down, but I do think it's worth investing time and money to get the best solution for you, rather than relying on random advice from a forum such as this.

www.moneysavingexpert.com/savings/best-financial-advisers/
may be helpful

At 42 you still have 25 years working so you should be able to build up quiet a good nhs pension. It might be worth buying another property to rent out but this can be problematic as you will also responsible for the upkeep.
Would it be worth investing it, obviously need to get specialist ad ice.

Thanks everyone. When I said I know I’m very fortunate, I meant compared to every other single parent I know. I was referring mainly to being mortgage free, to know that I will always have a house to sell should I need to gives me a lot of security.

I have considered a buy to let but I’ve always been nervous of meeting the costs should my ex stop paying the amount he currently is. I wouldn’t be able to cover any loss of rental income should the property remain empty for any length of time on my wages/child maintenance alone.

Moving to a better area would absolutely make sense but the children are so settled here. I do wonder if I should put the money into a more expensive house for us instead though but not sure that would be any better than keeping it as savings.

But I am acutely aware that having no pension leaves me in a very vulnerable position.

Really appreciate your advice, think seeing a financial advisor is the way to go 😊

If you think your ex is likely to stop paying, I’d keep some of it in an easy access account so you would still be able to function if the worst happened.

I also think living with the prospect of him suddenly cutting you off hanging over you would be a miserable way to live. Young children are very adaptable. Look into moving somewhere now with good secondary schools, primary with before and after school provision in case you need it, and where your journey to work would be as easy as possible.

If you bought a buy-to-let in a part of the country where prices are low, you'd get a better return on your capital, possibly a better deal on the mortgage, and the cost of maintenance of the property would be easier to meet from the rental income.

I'm also a fan of premium bonds, I get around 4% on my £10k in bonds.

OP, if you can save £5k a year (at the moment) and you’ve got £45k going spare, then buy a buy-to-let, keep this years £5k aside as ‘rent cover’ money, and get an interest only mortgage. As you’re in a low wage you’ll still get full mortgage interest relief (for now) which means your profit ratio will be good. As a very rough guide, depending on where you are, you could buy something for around £200k (you need 20% deposit for buy-to-let). Rent would vary between £700-£1000 per month depending on location, after maintenance costs you’d get £5-700 a month. Because the NHS will ‘pension match’ I.e. match what you pay in, you then use the rent income to replace some of your NHS income for your monthly spending, and instead pay £5-700 a month more from your salary into your NHS pension. They will then match at a higher level, growing your pension pot much more quickly. With 20-25 years of working life left you’ve got plenty of time to build that up quickly, and with the £5k you get from Ex this year safely in the bank, you’ve got a buffer for rent failures etc. If he does continue to pay the £5k, keep adding adding it to the buffer fund until you get to £50k, then take £45k out and buy another rental.