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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:

ImperialBlether · 12/12/2015 11:36

I'm sorry; I think that's really bad advice.

absolutelynotfabulous · 12/12/2015 13:14

I don't think it's bad advice either. The OP won't get much of a pension with 80k. She may as well invest it in property, which is relatively secure as a long-term prospect. Even if the property isn't actually hers.

It's not enough for a btl either.

It will buy her a reasonable shares portfolio with a small income if she wants, with growth if she wants, and liquidity if that's what she wants.

NewLife4Me · 12/12/2015 13:29

Hello Op.

Have you considered buying a house with the remainder?
Then when you have made a profit from the increase in house prices you can sell if you want to or keep it as long as you want.
I am any risk averse and as savings have no interest these days this is what we did.
We are just about the sell ours as it made 30k in 2 years not including profit from renting it out.
You can gain an income, invest in your future and gain a profit.
We are going to buy a cheaper property and spend some of the profit on home improvements.

NewLife4Me · 12/12/2015 13:32

80k is certainly enough for a btl, depending on where you buy.

PurpleThermalsNowItsWinter · 12/12/2015 13:45

£80k could get you a two up, two down property in parts of Yorkshire OP. I know you don't want a btl but if you're not on the mortgage at least you have a house (maybe not a 'home') as security. Or at least discuss with a financial advisor investments that allow you to access the money easily should you ever need somewhere to live.

DeoGratias · 12/12/2015 13:49

Also if the £100k goes into her son's house in his name he will not pay capital gains tax on it, she will avoid 40% inheritance on her death, he will have the money when he needs it and there will be no issues over tax on rent and the current large numbers of measures taken against buy to let tenants.

on the other hand she could use the £100k as 25% deposit on a buy to let and buy a place costing £400k before the extra stamp duty on buy to let starts. If she doesn't earn much/pay much tax then she will not be affected by the changes in interest relief on buy to let either.

ImperialBlether · 12/12/2015 14:02

£80K will definitely get the OP a buy to let property. She could invest the rent until she retires, then use that and the rent to live on until she gets the state pension. If her relationship goes down the pan she has that ultimate security of a home of her own.

It's just ridiculous to think of giving all that money to a young man with a lifetime of work ahead of him. The OP has no pension and no home and wants to stop work in 15 years. Rent at only £3,000 pa would give her £54,000 in that time. If she gives him the money she has no home, no income from investment and no lump sum. It's sheer lunacy to suggest she makes herself so vulnerable.

Blu · 12/12/2015 14:18

Have you been paying half the mortgage and / or put any capital into the house? If so you could actually pay off the mortgage AS LONG AS THE DEEDS WERE AT THAT POINT PUT INTO YOUR NAME TOO. Once the mortgage is paid your credit rating is irrelevant . You would then need a deed of covenant to say you own the house as remnants in common and what proportion each of you own.

Otherwise in your shoes I would buy a flat and rent it out. Why would you not want to do that? You own no other property. This is the best way, IMO , to get some stability for the future. And don't chip away at the sum.

I would not even put £20k in for repairs unless it gives you a documented stake.

Original poster

darumafan · 12/12/2015 14:27

I have been reading all the posts and have also been given a couple of financial advisors to contact. I need to talk to my partner regarding wills and the future. He was/is planning on leaving the house we live in to my son. He mentioned putting it into trust as soon as the mortgage is paid off so that it is secure and can't be used for nursing home fees.

I'm not ignoring any comments, it has been hard listening to the ones telling me how stupid I have been putting my faith into our relationship.

I know how insecure I am. I am looking at ways to rectify this.

OP posts:

TheWildRumpyPumpus · 12/12/2015 14:57

I'm in a village in the East Midlands and there are 2 bed properties for sale for around 100k.

Hope your chat with an adviser goes well OP.

specialsubject · 12/12/2015 15:08

just a thought, OP - you don't expect the boat to sink but you do expect it to have lifeboats. And that's how you should treat any relationship if the breakup would leave you with problems.

doesn't mean less faith or less love, but it is basic self-protection.

YeOldeTrout · 12/12/2015 15:09

I don't think anyone said OP was stupid to put faith in her relationship. Just that some investments are safer bets than others. Any big investment in the house where you live should be legally enforceable that you get a fair share back. What if your partner dies with full intention to leave the house to your son but his will gets successfully challenged? You can make the situation more secure than that.

I'm sorry for your loss, Darumafan. I should have said so earlier.

howabout · 12/12/2015 15:41

In Op's position I would be sorting out a pension. You can invest up to your total gross salary, (subject to a Max) annually and I think you can also carry forward unused allowance. Detailed provisions available freely on provider websites. This means the £100k inheritance buys a pension investment of £125k for a basic rate taxpayer. I would drip the funds in over several years and park the money in ISA cash account and standard deposit account.

Alternatively the Op could buy into her DP's property. I would be suspicious that the DP is only reluctant to pay off the mortgage because this would be the next logical step. If this was done then the Op would be able to be compensated for any investment she makes via property improvements. They would also be able to use the DP's ISA allowance as well as hers. So £20k for home improvements, £25k to pay off mortgage, £15k Op cash ISA, £15k DP cash ISA, and monthly pension contribution of £1k. This gives Op £60k share in her home and plan for investing £12k net (£15k gross)a year in a pension for upwards of 3 years.

adr07 · 12/12/2015 19:44

£65,000 to £75,000 will buy a good 3 bed property in certain areas of the North West, Liverpool and Manchester for example. What the OP needs is a guaranteed fixed rent return with no void periods, no maintenance costs, etc = a no hassle BTL.
Spend say £70,000 and receive 6% per annum guaranteed. £4,200 return per annum fixed.

Holstein · 12/12/2015 20:47

There are lots of properties in the Midlands under £100k. Check with your local authority- ours is desperate for homes to let to council tenants, and will do all the letting, managing, repairs etc if you sign up to their scheme.
It would give you an income to invest in diverse areas, ahead of retirement.
I'm sure you and DP will have a long and happy life together, and a house of that value wouldn't be subject to inheritance tax when passed on to your son after death.

absolutelynotfabulous · 13/12/2015 08:27

I'd think the btl route through very carefully, though. I have a cheap property on a btl of 35k. Its market value is 50k. I let it for 330-the going "private" rate for the area, and once I've paid the mortgage it earns me the princely sum of 50£ pet week. That's without deductions for voids and repairs.

It's great for me, because I'm dependent on the income at the moment, but there's unlikely to be any increase in value either long or short term.

YeOldeTrout · 13/12/2015 09:00

Plus like I said above, it would be putting all of OP's eggs into one basket. Her whole investment would depend on property, and even worse, dependent on one specific property.

Also probably leaving her no money to enjoy, to help her son with, or improve her own home.

SevenOfNineTrue · 13/12/2015 09:10

Personally I'd pay off my mortgage and invest any leftovers so I had a small yearly income.

sparechange · 13/12/2015 09:15

trout
She doesn't have her own home to improve...
OP has already accepted it would be foolish to spend tens of thousands to improve someone else's house, and she won't be doing it...

YeOldeTrout · 13/12/2015 09:23

Unless she got on the mortgage as joint owner.
She said partner doesn't want that because he feels she'd be absorbing his debt. Not because he's a jerk or both distrust the relationship.
They could look at it as an opportunity for her to get a load of home-owner security.

However, becoming any kind of property owner is a big leap. I don't think OP likes it.

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