I’ve just inherited 500K WWYD?

[Rubbishwithmoney]

Name changed and looking for advice. I appreciate this is a lovely financial position to be in but it’s also come with the loss of my parents and I don’t want to be accused of bragging. I’ve also not told many people in RL because of the current situation and I don’t want people to treat me differently.

I’m 30, married with 1 child. My father died a while ago and my mum suddenly died last year. I didn’t expect I would be in this position so young but I’ve inherited just over 500K. I had recently bought a house, so I’ve used 200K to pay off my mortgage and around 50K on some home improvements, paid off the cars and paid off a credit card. I’ve also put some in a child saver account.

My husband and I both have relatively low paying jobs (£25K) but we both really love our work. I’m currently working towards a qualification paid for by my employer and would need to remain in my area for at least 4 more years.

I’ve spoken to a family friend, who works in finance. He thinks I should lock the remaining 250K up in a bank and doesn’t believe in any form of risk.

I went to see a St James Place advisor and that seemed really positive but since reading St James Place reviews online. I’m worried about expensive fees, losing a lot of money in stocks/shares and paying large exiting fees if I want to take the money out.

I’ve also looked at property to buy to let as an investment but family friend and financial advisor both say this is a bad investment.

My main goal is to move away from the area we live and buy a property with land in a much more rural location. However, I would need around 750K to do that. I would be able to transfer my job and husband could either get a new job or work from our property doing holiday lets/Glamping type work. I don’t want to have to take a gigantic mortgage out that our small wages would struggle to pay back.

My mum would normally give me honest advice and I’m really struggling to make decisions without her.

So I’m asking WWYD with the remaining 250K?

AIBU to find a stockbroker to invest it for me? Should I put it in a ISA for 4 years and not touch it?

Thank you for any advice and sorry for long post x

We had a similar situation and use Rathbones. Very happy, yearly visit to discuss where we are and if we want to change risk setting. We have split risk and have bought rental property too.

You need financial advice from an independent wealth management company - preferably one used by someone you know.

We did this with far less to invest than you, and used a company that a good friend used (after they inherited money).

They have turned a 21% profit for us in the last year.

Your family friend is utterly incorrect and so is your financial adviser. I would absolutely put it into two of three properties with a bit to let mortgage. This can be your pension, a massive gift to your children abs a safeguard against the massive recession that is on its way. You cannot go wrong with a sensible property investment. Any financial adviser who suggest sticking it in the bank should not be doing the work they are doing! Have you seen interest rates recently?!!

Terrible advice from people saying properties can be your pension. By all means, buy a BTL if that’s what you want, but an actual pension from a pension company gets govt tax relief (generous) added, and an employers contribution if you use an employer scheme you’re already in.

If you have a good defined benefit (final salary or career average) scheme at work stay in it and keep contributing. If you have a defined contribution scheme stay in that and up your contributions to ensure at least 20% of your salary between you, employer and tax relief.

Explore SIPPs and Stakeholder pensions too, plus ISAs and shares, premium bonds etc- but again, leave it a year until the dust has settled.

You need proper independent financial advice from an IFA (independent financial advisor), not from randoms on MN. St James are not IFAs, avoid them.

However, as a random on MN I suggest:

A savings account will mean losing money in real terms as rates are lower than inflation

Property is a bad idea for various reasons

You need some kind of investment in shares

You need to max out your pension contributions

Take a look at the Meningful Money website and podcasts if you want to educate yourself - really accessible and easy to understand.

Personally, don't tell anyone other than e.g. Bank manager of necessary or your stock broker, that said, research stocks, shares ect then when your knowledgeable, then consult a stock broker, then your not just relying on their knowledge to guide you.

@Mumtothelittlefella

And I guarantee that every poster here who complains about SJP fees is actually an IFA and is taking an opportunity to throw dirt when it’s actually completely rubbish.

Last time I checked I wasn’t an IFA

See what I mean about silly advice? (SavannahMia'smum)

DH's great auntie died having left "her life savings" under her mattress as she didn't trust banks. Unfortunately the fact that she was not at all financially savvy (obvs), meant that inflation eroded what she had squirrelled away there big time. She still wasn't financially savvy enough by the time she died to realise this though, luckily enough.

Can't be arsed reading the thread.

Have a fucking blast.

Set up your kid if you have them with a home, clear mortgage.

Spunk the lot 😂

I don’t think you can beat BTL. I bought a house for £250 000 I let it for £1050 PCM. The value if the house is now £380 000.

Can you look at pensions, that money could work for you to enable you to retire early. Speak to a really good pension advisor. At your age the pandemic shouldn't affect pensions

I'd invest in property...the rental market where i live is crazy....3 bed semi's in not a great area are renting for 900 a month....

Take out an ISA for the max value before April (end of tax year) and also a another one mid April (to get it in next tax year too). Then I'd invest - some in growth funds, some in stable, less risky funds. I use Fidelity Investments. If you start using fund managers and investment advisors be sure you know what they will charge you first, they can get expensive. I would take pension advice though - to make sure you are covered later.

@Mumtothelittlefella

And I guarantee that every poster here who complains about SJP fees is actually an IFA and is taking an opportunity to throw dirt when it’s actually completely rubbish.

That's a lot of IFAs on here then!! Do you work for SJP? On TrustPilot average score is 3.3, with 47% rating then as terrible and 46% as excellent, so there's clearly a wide diversity of client experiences... this report is scathing - www.yodelar.com/insights/st-jamess-place-review

And this thread on MoneySavingExpert - forums.moneysavingexpert.com/discussion/5847458/st-jamess-place-can-i-do-better

They can't all be wrong!! 😂

I wouldnt rush it. It might be one day you decide to sell your current house and do something entirely different with your life.

Do your research. Look at what other people do with their money, and think about what makes you happy. You don't need to invest it immediately. Also don't go on some wild spending spree or you will regret it later.

@Mumtothelittlefella

And I guarantee that every poster here who complains about SJP fees is actually an IFA and is taking an opportunity to throw dirt when it’s actually completely rubbish.

Nope. Just recommending who I have used myself. HTH.

Probably as others said Max out stocks and shares ISAs and premium bonds. Get some/ (another lot of) independent financial advice.

With your plan of needing 750k, you need to be actively making money so I’m not sure if property is the way to go. Tax advisor may help with this. The tax rules keep changing so buy to let property is not very profitable, and a pain in the arse. Especially if a short ish term thing. If you were thinking long term then could be ok. Just research everything!

I’d also keep enough money aside for things like replacing all your white goods fund, holiday fund, fun things fund. You may not feel like it straight away, but it might to be nice to think of a big holiday (Disney) that you know your parents paid for. Or a nice piece of jewellery.

Sorry for your loss

If the money is in a joint account £170k will be protected in case the bank fails. So if you have a joint account that you are happy to use for this, in your position I'd leave £170k in there for now while you decide what to do and get over the shock of losing your mum. Then I'd max out premium bonds, and keep the other £30k in an instant access savings account (in a separate bank than the one your £170k is in).

So sorry for the loss of your mum, I lost my last parent a couple of years ago, and nothing can prepare you for the huge sense of loss x

Oh yes I forgot about that joint account higher amount - that’s right.

So sorry for your loss OP, that's awful. You dont have to come up with a plan on what to do with all your money yet, especially after losing your mum financially, give yourself time 💕

Saying that 250k is a lot to have in a bank account and I would spread the money around a little. If you have an isa I would out the max in the ISA. personally i have a stocks and shares ISA as historically shares will give a better return overtime than having money in a savings account.
Do you have a pension? I believe you can put up to 40k a year in a pension so you could do that.

Also another idea, you say you want to move to a rural area in a few years and need 750k for it. Could you buy some land that you could build a house on? Building a house can often be cheaper than buying one but or course entail more stress. An option though as you said you cant move for another 4 years so no stress about moving in on a certain date.

My husband and I both have relatively low paying jobs (£25K)

Sorry but I don't think £25k is low paying.
Also sorry for your losses op
I would consult an IFA on investing the rest of the money.

I would buy a holiday home in an area I also love. I would put the holiday home with a quality rental company to look after it. Then you wont need to worry about it being ruined by tenants.

"Don’t do anything in a hurry.
Max put your ISA for this year (& after April 5th, next). Stick £50k into premium bonds. Rest - whatever 30 day access accounts give the best rates (remember not more than £80k in one). The take your time to evaluate things - don’t make big decisions so soon after a bereavement."

I think this is good advice, especially about not doing anything straight after a bereavement. Your head is in a different place at the moment, and things are in flux in the country too, with the pandemic and Brexit and everything else. Give it a while to settle, give yourself time to grieve, and then you'll be a better position to decide.

And, sorry, I meant to say, condolences on your loss. It's not an easy time, so be kind to yourself.

Dear OP,
I'm very sorry for your loss. In no way does having money, welcome as it is, compensate for losing your mum and dad at such a young age. The money involved is an interesting sum because it is large enough to think very hard about but not large enough to completely change your life and give up work, live on a yacht etc.
First thing, DO NOT invest with St James's Place, they are rip off merchants. If you keep it all in the bank you will definitely lose money in real terms because the rates are below inflation, so you need to think about stock market investment - over the longer term this is a much better bet. You can only put £20K a year into an ISA as someone I think already said. If you want tax efficient investment you could look at boosting your pension. I know it seems a long way off, but the earlier you invest the longer it has to grow and it is very tax effective.
In terms of purchasing a property for £750K you could use your inheritance and the equity in your current property towards doing that, but you would still need to earn enough income to service any mortgage on it.
I would say that at your age there is no rush to decide on any of this. See a number of Independent Financial Advisers and pick one you are comfortable with. Bear in mind they are all self-serving to a degree, though and do not undertake any course of action you don't fully understand. Take your time and in the meanwhile keep the money in the bank. Or rather banks - only keep a max of £85K in a savings account with any one bank, as that is the max covered by the compensation scheme if a bank goes bust. Read the personal finance pages in the newspapers, they often have very good advice and you can learn a lot that will stand you in good stead with your money in the future. It sounds as though you have a good head on your shoulders - a friend of mine inherited a huge sum from her parents but had already pre-blown more than that by extravagance based on her expectations! Good luck.