£100K - difference of opinion on how it should be spent.

[Wrinkledretainer]

Name changed. We’ve inherited (dh parent) just over a £100k. Both late 50’s with good defined benefit pensions of many years and good max lump sums if we want to take it of £200k or minimum of £50k tax free if we want to keep max monthly pension. Annual pensions will be £85K with state pension included. One child at uni whom we have saved £40k for towards flat deposit. Fees via student loan but we pay maintenance/halls/rent cost.

Dh earns a third more than I do, combined income £95k. Debts £20k as we needed some house works. Mortgage still £170k as we lost a business and had to sell up so didn’t re-enter the property market again in SE until 6 years ago. House worth £450k.

Over the years we’ve travelled extensively around the world and spent a lot on holidays. I’d like to pay off the debts, put a patio in (5K), buy a £10-12k car as ours is on its last legs and then put the rest towards the mortgage. Dh wants to pay off the debts, put a patio in, get the car then spend the rest travelling more whilst we can.

In my scenario, paying off the debts and paying down the mortgage will mean we can save an extra £1200 a month. With his scenario, it would be an extra £600 a month. We only have savings of £15k taking out dc savings of £40k above.

I think the longer term plan is to move to the South coast but houses there will probably be about the same as where we are price wise.

Dh thinks we should live a little now as we’re getting older and health wise things are creeping up. He envisages we’ll slow down in our 70’s and the pension savings will accrue then. I feel we need to be more sensible now to build more of a cushion. If there is another inheritance, it’s only likely to be about £20k.

What would you do?

This is why parent is doing it now - in hope of living 7 years. They have just turned 70 so hopefully this will work out but if it doesn't there will be sufficient assets in estate to pay back the tax.

Are people not reading the Op?
The have already travelled extensively
They earn 95K, have lost a business, have 5K debt ( net) and an outstanding 170K mortgage
Personally it sounds like the DH has a history of poor money management and so it will continue...

Deprivation of assets applies only if there is a realistic expectation that care will be needed when a gift is made. She’ll be free and clear of that and IHT liability in seven years.

This was my thinking too
Hence a recommendation to pay off as much debt as possible. The new car seems a must atm
The patio and holidays can be saved for.
With only one kid at Uni and good salaries that’s possible

Parent plays on the local water polo team in masters category. No care needs imminent. Can't rule out the future of course

Travel and have fun whilst you can. Things can change rapidly in a very short time. My dad put off a lot of things for his retirement and died at 62, so I have a very different view of money to my DH. His parents lived until mid 80s.

There are a few places with defined benefit pension schemes like local authorities (or do you mean final salary schemes?). Career average schemes still offer a defined benefit but the accrual rate seems to be less than the old final salary rate (but I’m not a pensions expert!).

Yeah, I'm in one. They don't offer anything like what they did in the past...

My mum died eight days before she retired, I'd do what your dh suggests as it is his inheritance end of the day.

I inherited a bit more than that and ultimately, it was my call on how we spent it.

We did agree to use some to pay off the mortgage and move house.

'We' still have a large chunk that I'm very cautious about spending, as it's sooooo easy to burn through.

My DH can't understand this, but accepts it's my money.

I know, when the time comes and he inherits, I'll have to respect how he wishes to use that money to some degree. I know I will find it hard though!

I'd pay the mortgage without a doubt. With a saving if £1200 a month you will still be able to do plenty of travelling. I don't really see his logic.

You're slightly annoying those of us who will be living on state pensions. You've got loads of equity and you'd still have a pension if one of you died. I think you'd feel insecure whatever your circumstances were.

His logic - as has been pointed out numerous times on this thread - is that health becomes increasingly unreliable as you age and the time to have adventures is while you still can.

They'd have an extra £1,200 a month for adventures if they pay the mortgage and will be saving money on the interest payments.

Yes, but that isn’t what he wants to do. And it’s his inheritance.

If their private pension is going to be 65k then I don't think a £600 a month mortgage will be an issue. They can always overpay now as they earn 95k joint.

You say 'we've inherited'

But your husband inherited the money is that right? Or was the will specifically set out for 50k to each of you?

I wouldnt tell him what he would do with his own inheritance.

Thank you all. The aim is to either have a low monthly mortgage payment on retirement (£300 max) or to pay it off altogether with the lump sum or move to a cheaper area at a push to become mortgage free.

We cleared our mortgage with a pension lump sum, it worked out well.

Sorry you feel offended, that wasn’t the intention. Yes, I probably would feel insecure as I’m not from a monied background and we’ve made financial mistakes.

I would definitely travel - I've had two health issues and my DH is older - hopefully nothing happens to one of you but if it did you'd regret not travelling together whilst you could imo

You will not “need” that money to retire. It’s more than plenty. Live now. Dementia, cancer, heart disease is going to pretty much get us all. You are healthy. Go and live.

Comparison is the theif of joy and all that.

We are late 50s, will have about £50k annual private pension between us when we get there plus state (£24k). I feel enormously fortunate. That's about twice average earnings, with our mortgage paid off.

There will always be people with more than you, but you should check your privilege. Most people in the UK, let alone globally, are not retiring early with £100s of thousand. Get over yourself..

I'm a saver too, not interested in foreign holidays either. I'd do the patio, replace the car, reduce the mortgage then bung as much as you can in a S&S (tracker) ISA over the next couple of years.
Looking at this list there isn't much for the ISA!
I've never really understood peoples' desire for expensive holidays though.

Try going on one, it might give you some insight. I’ve never understood the appeal of never spending any money.

Move to south coast enjoy the warmer winters.