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Investments

Discuss investments with other users on our Investment forum. For more advice read our tips for saving for your child's future.

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Original poster

What to do with £80k

70 replies

darumafan · 11/12/2015 09:48

My mum has just passed away, once everything is settled I will have around £100k. Now I know that this in a huge amount of money and I am very fortunate to have it. My dilemma is what to do with it. I am planning on spending about £20k on very essential home improvements such as double glazing etc. I don't know what to do with the remainder of the money. I am 45, live with my partner and have a small mortgage left but he is adamant that he wants me to leave that alone! I am extremely risk averse but equally have a dreadful credit rating due to stupidity in the past. I hate the idea of BTL and would like to avoid this altogether. What should I do with the money? Ideally, I would like to be able to retire in 15 years and have a nice standard of living. I don't want to have expensive holidays or flashy cars, just to be able to buy a nice bottle of wine at the weekend and go out for dinner occasionally. Any ideas? I am a complete novice and struggling to get my head around such a lot of money.

OP posts:

aginghippy · 11/12/2015 10:19

Why is your dp so adamant about not paying off (at least some of) the mortgage? That's the first thing I would do with a big chunk of money like that. The amount of interest/dividend you earn on any investment would likely be less than the interest you are paying on the mortgage.

IIWY I would pay off/reduce the mortgage first. Then I would save or invest the monthly amount I would have been paying for the mortgage.

Original poster

darumafan · 11/12/2015 10:22

The mortgage is only £26k. We are on an extremely good interest rate and he wants to leave things alone there. He doesn't want my inheritance going on the mortgage, he wants me to do something else with it.

OP posts:

PennyPants · 11/12/2015 10:28

I would also pay off the mortgage. You will still have £50k left that your not sure what to do with!

specialsubject · 11/12/2015 10:30

you can get around 3% on most of that by scattering it round various current accounts, this is a bit ahead of inflation. Stock market is high so investing at the moment may not actually get you much more in 15 years. Not enough for BTL and I entirely agree that it isn't sensible.

that's all you can do really -spread it around hope. You won't get your state pension until your late sixties. What is your current private pension arrangement?

Original poster

darumafan · 11/12/2015 10:31

I am pretty sure that be is not going to move regarding the mortgage, I do understand why it is the most obvious thing to do. He is adamant that I don't use the money for this so I have to respect that. So the question still remains, what to do with all that money.

OP posts:

absolutelynotfabulous · 11/12/2015 10:38

I'd invest it in a "cautious" scheme and take an income. It's not guaranteed to be unaffected by the markets, but pretty good atm. I've got a Halifax one (though sadly not containing 80k)

I get what your dh means about the mortgage. I wouldn't pay it off either, in your shoes.

FattySantaRobin · 11/12/2015 10:43

If you're really unsure you could give it to me

On a serious note though I would pay off the mortgage and then I've no bloody idea what I would do with the rest. So if you're not paying off the mortgage I have no advice.

LadyStark · 11/12/2015 10:47

You need to see a financial advisor - ideally one that has come through a personal recommendation.

They will go through your attitude to risk and then talk you through your options.

Do you have a good pension already?

Russellgroupserf · 11/12/2015 10:48

Look at MSE website for interest rates and best buys.

ISA and also interest current accounts such as Santander 123 for no risk. You can put up to 20k and get interest with Santander and also get cash back on paying certain bills from the account. You would make about £50 per month with 20k in, they are now charging £10 a month to facilitate the account it used to be £5.

It is a huge error to not pay off the mortgage though as rates are pitiful. I Learnt about savings and investments as a teenager due to a general studies lesson. The teacher who was a militant labour supporter back in the 1970's explained the evils of the stock market and savings. I did the complete opposite.

What is the interest rate on your mortgage?
Why is he adamant?

Original poster

darumafan · 11/12/2015 10:58

I don't have any pension provision which is stupid at my age. The interest rate on the mortgage is 0.69% He doesn't want my parents hard earned money going on his debt. I have to respect that, he doesn't get stubborn about anything normally so I am leaving him to it. We will be mortgage free in 4 years anyway even without this windfall.

OP posts:

GreenSand · 11/12/2015 11:13

OK, if your paying 0.69% interest on the mortgage, it probable is sensible not to pay it off.
Home improvements, clear any other debt, a holiday, and see a financial advisor about the rest.
I'd probably fill up a cash ISA this tax year if you can, and another next tax year (after April), keep some in an instant access savings account so you can pay in cash when the washing machine breaks etc (3-4 months spending). That's probably most of it gone . Scary how quickly money can dissapear.

Original poster

darumafan · 11/12/2015 11:16

I know, it seems like such a lot but when you start thinking about it, it isn't really. Thanks for the advice, you have kind of said what I was thinking but it is reassuring to have it confirmed. How do I find a financial advisor?

OP posts:

aginghippy · 11/12/2015 11:16

OK that makes sense. If the interest rate on the mortgage is 0.69%, you could get more than that in savings interest, so I can see the point of continuing to pay the mortgage.

I second the advice about seeing an independent financial advisor.

As mentioned upthread, the state pension age is going up to 67. If you are 45 now, you will be able to collect a state pension in 2037. If you have no other pension provision as of yet, you might not be able to retire at 60. Something else to talk over with the financial advisor.

aginghippy · 11/12/2015 11:19

The best way to find an advisor is by word of mouth. Ask some of your friends, family or colleagues if they have used one.

If you get no joy that way, you could try www.unbiased.co.uk

Holstein · 11/12/2015 11:26

You say 'his' mortgage? Are you named on the deeds? You aren't married?
You're gonna precarious situation should anything happen to your relationship or if anything happened to him. Are you named as inheritor in his will? Do you have any children?
Sorry for all the questions, but I think you need to consider the implications if he has no will, you're not on the deeds, and he died before you retire.

Holstein · 11/12/2015 11:27

'in a' not 'gonna'

Holstein · 11/12/2015 11:28

And I'm sorry for your loss

FinnMcCool · 11/12/2015 11:32

What do you mean the mortgage is his debt?
Are you married?

ImperialBlether · 11/12/2015 11:32

Are you not married? You're in a vulnerable situation if that is his home, aren't you? In that situation I would definitely buy a BTL - I understand your reasons for not wanting that but it would provide a much better return than a savings account and you would have a home if there was a problem with your relationship.

If you were married, I was going to suggest paying off the mortgage and paying the same amount into your bank account each month - you would end up with so much more than your initial investment, then.

cupcakelovinggirl · 11/12/2015 11:33

Would you not consider putting aside some money for your children's future - getting on the housing ladder etc?

llhj · 11/12/2015 11:38

If you have no retirement provision at all, then there's no way you'll be retiring in15 years on that £80k invested. You need to invest that for your pension and start adding to it rapidly. Take financial advice from a trusted source.

Original poster

darumafan · 11/12/2015 11:52

No we aren't married and no I'm not on the mortgage. Yes, I know that makes me a fool but my credit rating was/is awful and I can't get credit. I will be entitled to a State Pension (if they still exist by then).

I won't be able to buy a property unless it was outright but haven't got enough money to do that.

My child is an adult so am not sure what I can do to help him out.

It's a lot of money but not enough to help me secure my future.

OP posts:

Perfectlypurple · 11/12/2015 11:59

I was going to say pay off the mortgage but as the rate so low and you are not on the mortgage I agree it wouldn't be a good idea to do that.

When my dad retired he took a higher lump sum and less yearly pension and put the lump sum in a 5 year bond. This made up what he 'lost' in his yearly pension and a bit more. Maybe look at bonds and see what you could do. You could have a longer term which would probably give you a bit more of a return in the long run.

In your position I would gift any children something. Not a massive amount but enough to make a small difference. When my Nan died the money my mum inherited she split 3 ways, her, me and my sibling. It enabled me to get a new car.

I would also earmark some of it for something frivolous like a fantastic holiday.

ImperialBlether · 11/12/2015 12:02

I certainly wouldn't give any children more than a token gift - this is needed for the OP's pension!

Original poster

darumafan · 11/12/2015 12:05

There isn't enough to fund frivolous holidays, maybe a fortnight in the sun elsewhere. I was thinking of gifting my son a small amount but I am also looking at making sure he will be ok in the long term. It is all a bit too much and I am feeling very rootless atm.

OP posts:

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