Critical illness lump sum - invest or pay chunk of mortgage

[Abkbjbjb]

Hi so just looking a bit of advice, I was I'll last year and received a critical illness payout from my life insurance, it is enough to pay off the entire mortgage less £20k. At the moment I have half in premium bonds and the other half sitting in an isa. The plan was to put it against our mortgage leaving only a small loan outstanding. Now that I am a year down the line and thinking a bit clearer after a horrible time I am now starting to wonder if clearing against the mortgage is the best thing to do.

Firstly I am listening to various podcasts etc and a lot are hinting at a complete collapse of the fiat currency, if bank bail ins happen hyphen money might be lost from savings etc, then they plan to roll in the new central bank digital currency. A lot of people seem to be planning on investing in gold and silver until we see how this crisis will pan out over the next year or so. I have no idea where to begin with purchasing gold/silver though.

I have also heard that premium bonds are not the best either, again they are paper bonds which may be lost.

Part of me wants to reduce all stress of the what ifs and just put it against my mortgage but then the other part of me thinks I might be better investing it wisely and see what happens over the coming months.

Any advice would be greatly appreciated 😄thank you

Honestly, for an average Joe who considers £20k to be a lot of money (I do by the way!) I think the best thing to do is pay the mortgage off and have the satisfaction of owning your own home.

I know plenty of people who regret making investments they were really au fait with but don't know anyone who regrets paying their mortgage off.

The idea that premium bonds would disappear overnight seems ludicrous and the kind of thing a scammer would say to get you to invest your money in their fake gold and silver business

I had a lump sum through critical illness insurance many years ago. I paid off the mortgage. I don't know if it was the best thing financially but it was most definitely the best thing for us. To own your own home and be free of worries re interest rates etc is priceless imo.

I agree with using the money to pay off your mortgage - you sound quite anxious, and if so, feeling secure because you own your home outright will be priceless.

Yes you could invest it but you'd need to make more than the interest rate on your mortgage (plus any investment fees and charges) to make it worthwhile.

Any surplus after paying off the mortgage I would suggest putting towards an emergency fund to cover 3, 6 (or more) months of expenses. Put the emergency fund in a 30 or 60 day notice savings account to get a good interest rate. Then you're covered if you lose your job or boiler blows up or similar.

Any surplus after that, treat yourself because you've been through a lot and have made some sensible financial decisions, so it's time for a treat!

What podcasts are you listening to, OP? They sound quite extreme and very much outside what the majority of financial experts would suggest.

Definitely pay off the mortgage. You'll otherwise be paying more mortgage interest than you can earn in investment interest. No brainer.

Mortgage.
Depending on how big the lump, I might keep £5-10k in premiums for holidays, emergencies, contingency, and pay the rest off the mortgage.
It’s a lovely feeling to be virtually mortgage free.

Premium bonds are digital, no bits of paper to lose.

Premium Bonds are issued by NS&I which is backed by the government. They are not going to disappear.

Other types of bonds can be much riskier, but Premium Bonds are safe enough.

Your mortgage will always cost more than anything you earn on investments. Pay it off. That’s financial freedom.

That would probably buy you a decent solar power set up with battery back up.
It was what we did tail end of last recession with a payout