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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:
YeOldeTrout · 11/12/2015 12:11

You're paying £20k into a house that you don't own? Why not get your name on the mortgage, tenants in common and THEN pay £20k on the improvements to house you equally own.

Else you invest £20k into a building that he profits from (potentially) after you move out. How is that a good thing?? Did you want to give him a £20k gift? Invested in the home that £20k is probably worth more like £40k to boost resale value.

Or just don't pay any money for house improvements, the whole £100k goes to your pension investments.

Holstein · 11/12/2015 12:11

I agree with looking at bonds. My MIL has used them as she has virtually no pension, though the rates were much favourable when she began her investment than they are now.

Holstein · 11/12/2015 12:14

Ah, now surely £100k would buy you a property somewhere? That would give you an income in the future at least. Has he willed the house to you? You're not a fool, life just happens, doesn't it? But now you have the chance to secure your future.

sparechange · 11/12/2015 12:17

I won't be able to buy a property unless it was outright but haven't got enough money to do that.
Where abouts are you, OP?

£100k would buy you a property outright in lots of areas (obviously not central London)
I would be prioritising that before paying for someone else's windows

It is hugely unpopular to say on here, but a £100k property would give you an income of £400 a month in a lot of areas, which would go some way towards sorting out your lack of pension even when you factor in the maintenance and tax you'd have to pay out of that

specialsubject · 11/12/2015 12:29

that BTL income could work, but bear in mind the insurances, hassles, voids and so on, plus maintenance.

as a very minor point the Santander 123 account was charging £2 a month and is about to start charging £5.

but the drip-feed makes a lot of things clear. No marriage - no investment in his house. You have NO security AT ALL.

ExitPursuedByABear · 11/12/2015 12:30

Watching with interest. I may have this dilemma at some point when my father passes away. Presuming he will not need to go into a care home, my brother and I will each inherit about £150K. I have no idea what to do with it.

BTL seems like the obvious choice but can imagine it being a bit of a headache.

Nydj · 11/12/2015 12:30

Please consider and do what YeOldeTroyt said - it is the most sensible approach to take. If your son doesn't already own a property but wishes to do so then perhaps consider gifting him enough to start a help to buy ISA.

Whatdoidohelp · 11/12/2015 12:32

Property development. Buy a flat that needs work with a 25% deposit. Mortgage for the rest. Do up flat and sell. Tax payable is minimal and risk is minimal. Repeat. Repeat. Repeat. We turned 20k into 140k in 4 years doing this.

Original poster
darumafan · 11/12/2015 12:45

I get it, I shouldn't put anything into this house. I live in the Midlands and can't afford to buy outright, I won't be able to get a mortgage. I have a shocking credit rating which is why I'm not on the mortgage on this house.

My son is mine, not ours. I would like to send him on a package holiday next year nothing more than that.

Whatever I do with the money is hopefully going to secure my future which should help to secure my sons.

I will find a financial advisor and talk to them about my options. They seem very limited atm but hopefully things will become clearer soon. I'm trying to process mum dying as well as what to do with her money.

OP posts:
sparechange · 11/12/2015 13:00

OP, you say you can't afford to buy outright, but you don't have to buy something in the next street to you.

Something like this www.rightmove.co.uk/property-for-sale/property-38380098.html would give you a rent of around £500 a month
Put aside £100 for maintenance and management fees (assuming you aren't close enough to go and do minor repairs, so would need the agent to do that), and you've got an annual income of nearly £5000

Compare that to a savings product with a 5% return (which you'd be lucky to find anyway) - you'd get £500

Given you've got a lot bit of catching up to do with your retirement planning, it would be sensible to take a closer look at property, and not spunk money on windows for someone else's house

YeOldeTrout · 11/12/2015 13:08

I dunno, property can go down as well as up, like any other investment.
BTL property requires maintenance & tenants have legal rights paperwork to fill in, etc. It's a hassle.

OP would be better to diversify her risks. So make several different types of investment. Then if one type of investment loses value, the others should still be ok; if they all go down then the whole world economy is tanking & pension will be least of our worries.

imho, Best choice still is if OP basically 'buys' her way onto the mortgage where she's living now, by paying it off, plus doing the improvements, getting her name on as equal owner, and then also get a small portfolio of other types of investments: mix of pension friendly things, cash & shares, probably.

But this relies on OP & her partner feeling that they can be secure in staying together (as sure as anybody ever can be).

Original poster
darumafan · 11/12/2015 13:15

I'm not going to spend anything on this house. I have already taken that advice on board. I don't like BTL, I have a moral objection to the concept so really don't want to do it.

I will look into diversified portfolio plans and see what that can offer me.

I won't be going on the deeds of this house. I have never wanted to and this hasn't changed just because mum died.

OP posts:
ImperialBlether · 11/12/2015 13:25

I don't understand why people are opposed to BTL. So many people need good landlords and couldn't afford to buy their own place. Why is there an objection on MN to providing a good service at a reasonable price? A flat would provide security for your future if your relationship ended and if (hopefully) it lasted, it would provide security for your son.

Seriouslyffs · 11/12/2015 13:26

There's a massive difference between being a BTL landlord of a massive portfolio and securing your future whilst enabling seine to rent a warm dry home at a reasonable rent. Where does your son live? Could you but a flat for him to live in and charge him a gentle rent?

Original poster
darumafan · 11/12/2015 13:32

My son lives with us. I don't know why I dislike BTL, I just don't want to be a landlord.

I have had lots of good advice on here so will think about things and make some decisions in the new year.

Thanks for taking the time to post everyone.

OP posts:
ImperialBlether · 11/12/2015 13:35

The thing that worries me is that if your relationship ended you wouldn't be able to afford a home for yourself. If you bought a home now (which has to be cheaper than ten or twenty years in the future) your security is guaranteed. For me that would be the most important thing.

However, if you don't want to invest in property, then you'd be better speaking to a financial adviser. You could ask your local bank if they have someone who could help you.

eatingworms · 11/12/2015 13:40

I don't understand why people are opposed to BTL. So many people need good landlords and couldn't afford to buy their own place. Why is there an objection on MN to providing a good service at a reasonable price? A flat would provide security for your future if your relationship ended and if (hopefully) it lasted, it would provide security for your son.

Totall agree. It is perfectly reasonable for you to own one property - whether you live in it or not. It's when one person owns 100 properties and doesn't maintain them that it becomes a bit less ethical.

aginghippy · 11/12/2015 13:47

Yes it's perfectly reasonable for her to own one property, but op has stated she does not want to be a landlord. It's also perfectly reasonable not to put your money in a business that you do not want to be in.

Kennington · 11/12/2015 13:53

A deposit for a house for your child?

Or a smal studio flat to rent out? This will provide a very small retirement income.

eatingworms · 11/12/2015 13:58

It's also perfectly reasonable not to put your money in a business that you do not want to be in.

Yes it is, but housing yourself is pretty important so for some of us it seems the sensible way to go. The OP's future will be much more secure if she has her housing covered, and security is what she has said she's after.
It's not about it being 'a business'.

ImperialBlether · 11/12/2015 14:04

OP, if you are paying rent in the house you live in now, your DP is a landlord in a way. You don't see it as bad that he is allowing you to live in a reasonable place at a reasonable price, do you?

specialsubject · 11/12/2015 16:14

many on MN hate landlords as they make money out of property, as housing is an essential. (so the logic goes) The bile doesn't get spewed at builders, those who work in banks selling mortgages and so on. Nor at farmers, people working in supermarkets, etc etc.

there you go.

but BTL is not an easy moneymaker (is anything) and the OP's financial situation sounds way too fragile anyway.

DeoGratias · 11/12/2015 18:31

So you live in your partner's house are not married to him and he house is in his name and the mortgage in his name. That makes it his debt in law. So it would be very foolish in effect to give him £26k. Better you keep that for yourself or any children.

You aren't sure what you can do to help your child out>? You could give them £100k to buy a property, los of parents do and that way your partner cannot get their hands on the money. In fact in lots of families they will do a post death will variation to put the money straight in grandchildren's hands and avoid a generation.

ImperialBlether · 12/12/2015 10:44

DeoGratis, it's very bad advice to suggest the OP gives her son her inheritance. She has no pension and no home and needs that money herself.

DeoGratias · 12/12/2015 11:24

I'm doing exactly that. In lots of families children will look after parents when they need it if children have helped children when they need it! I will have no savings of pension when I've helped the children and also this poster is going to work for the next 15 years so can earn more money anyway.