What would you do with 40k to make money?

[Kevinisnotacatname]

Name changed for this but been around here for yonks. I have no private pension (long story) and was due to inherit nearly 300k so it wasn't something I worried about. My dad then left nearly all his and mum's money to a woman he'd met 2 years before he died. I now have 40k total with the inheritance and a little savings.

What would you do to make this money work for you? I can't afford to make real risks really as this is all I have. I'm looking at starting a private pension now (I'm 48) but the most I can put into it is maybe £100 a month. I'm also wondering if something other than a pension might be a better option?

I've been googling so much I've confused myself so thought I'd post on here. I know I know, I should have started a private pension years ago but I can't turn back time. I don't own a home, I rent and I would not be able to get a mortgage.

Depends on the value of the estate as a whole. But given it was around 300k relatively recently, there wouldn’t be much if any to pay (nothing due up to £350k). Whatever OP gets would be after tax anyway regardless.

She has a secure tenancy with a housing association. She won’t have to hop between houses when she is older, as she can stay there securely for the rest of her life if she wishes. As long as her rent is paid and she doesn’t cause loads of anti social issues, she cannot be kicked out.

Enjoy it, have a holiday, put the rest into savings account.
Interest rates are good at the moment.

Buy to let

Make sure have a clean break and sorted finances out from ex h so he can’t have any claim to your inheritance

With 40k? Id do that if I could buy a lace on that

You can only use carry forward for pensions AFTER you’ve put in this year’s FULL allowance of £60k - if you don’t earn that much then you can’t do it.
Carry forward only benefits v. high earners.
If you only earn £20k then you can only put £20k ( gross ) in,
which means £16000 which gets made up to £20k with the tax relief.

As I said before, a small pension can also be detrimental if you are going to be claiming HB etc. so be careful and do the sums.
My Sister had no choice in the matter, her pension was part of her divorce settlement but it made her worse off for years until she was able to claim PiP.
She would have been evicted for rent arrears from her HA flat had I not been able to help her financially.

No inheritance tax on £40k!

OP - most financial advisers will offer you an initial consultation for free. Perhaps speak with a couple and just see what they say. No need to take them on and pay their percentage . Personally I would be wary of anything stocks & shares .

Most financial advisors won’t be interested at this level. They will never give the advice as part of the “free” consultation.

No she cant

Oh gosh so much advice! Thank you everyone who's contributed so far. I'm making a list of suggestions first then narrowing them down as I do more research.

I guess I need to think about how much of a pension I can realistically build up now and if as someone else has said it will be even worth it in terms of not being able to claim housing benefit/pension credit.

I have it currently sitting in a savings account with just over 5% interest

I hope it’s an ISA so your interest isn’t taxed!

I'm going to put some in an ISA very soon when I've wrapped my head around what best to do.

Generally not allowed to own a property while living in a HA place

The OP says she has a secure tenancy. She could inherit a million pounds and they still couldn’t kick her out.

At a higher level, but yes we've been given advice as part of free consultation . How else are you to know whether you want to deal with someone or not ?

Admittedly my main reason for suggesting this was that I'm a bit concerned as to someone taking advice around this kind of thing from MN - when upon this thread people are giving conflicting advice as to what is true or not . I would be really worried that OP takes on oars someone's suggestion which ends up not being right for her .

Don't do this!!
My daughter purchased one a few years ago with the intention of having some fun whilst saving on paying a mortgage and utility bills.
It was a total money pit, the motor needed replacing and lots of other things went wrong with it. It was purchased from a solicitor who basically lied to them re the condition and the upkeep. You have to know what you're doing otherwise you could cause problems for other people.
She sold it at a loss a year later.
I would invest your money in a higher rate savings account, if you don't want the gamble of stocks and shares, be frugal and put as much as you can into a workplace pension. The aim should be purchasing a property to give you future stability.
You have not mentioned if you have a partner.
Would there be any possibility of buying a house jointly in the future?

This looks pretty grim to me, it needs lots doing to it.......

Even better, you can buy the HA home at a discount: https://www.gov.uk/right-to-acquire-buying-housing-association-home.
Removing rent from your expenses will help your pension to go much further. You then have 20 years to save a bit more by other means.

I would try and get a public sector job. £20k in stocks and shares ISA and £20k in savings.

I’d put £20k in stocks and shares ISA
id put £15k in 9 months atom bank high interest account
put £5k into highest interest you can get easy access account

public service job would provide good pension for 19 years

id buy £100 extra pension monthly for the duration - would give you an extra £22k in pension pot but only probably cost you about £15k ( £100 cost about £70 monthly)

then 2025 I’d get a highest paying cash ISA that allows withdrawals ( example Coventry building society allows 4x withdrawal per year) put in £20k from your Atom account and easy access. Set interest to be paid to your bank monthly. At todays rates that’d be £82 per month

This £82 covers the extra pension you’re buying if you get public service job you’re after and but extra pension at £100 each month. ( as it’s £100 before tax, so your take home only drops by about £70)

leave your £20k in sticks and shares ISA long term these have produced between 8-10%

Don't invest in property. That model worked when borrowing was cheap. It doesn't now. Pop it in a savings account, pay a bit for some proper financial advice. They will be able to help