How best to spend £450k

[Moneymaybe]

Apologies for the slightly goady title, rest assured I’d very much prefer not to have inherited this money and instead still have my parents but this is the situation I find myself in.

We have around £280k remaining on our mortgage and our fixed rate ends in late 2026.

I will speak to an IFA, but so I’ve got some ideas of my own - can anyone suggest how they’d invest the money? Is paying off my mortgage always the best plan? We’re still young (ish), earning well and retirement is a long way off.

How are your pensions looking?

You’ve specified one medium/long term goal, which is deposits for your children.

What savings and investments do you have currently?

I’d approach as follows-

• pay off any short term debt (you may not have any)
• give yourself an emergency fund of 3-6 months salary in a high interest instant access account (you may already have this)
• Assuming your timeline for giving the kids money is 5 years or longer, put the max into a S&S ISA invested in a global tracker. If you’re happy to do this jointly with your husband, you could do £40k between you now and another £40k next tax year. With average returns you could more than double your money in 10 years which would make a good deposit for each child. (Alternatively max out their JISAs every year, but then they will be free to spend it from 18.)
• The rest I would split between pensions and unwrapped investments for yourself, bed and ISA the investments when you can. Again some sort of global tracker- lots of info online about pros and cons of different ones.

I would steer well clear of buy to let. Premium bonds might make sense for your emergency fund if you’re both higher rate tax payers and it’s a significant amount.

Paying the mortgage off is unlikely to be the best idea financially at your life stage but obviously brings peace of mind.

And don’t forget to buy something expensive to remember your parents by, might be jewellery or a painting or a sculpture, or some expensive craft equipment, or a state of the art camera.
So sorry for your loss

Remember that financial advisors don’t want people to pay off their mortgages as they don’t then have access to the funds to invest. I’m not saying their advice is wrong but just have it in mind that stock market investments and pensions is what they make money managing, they’re not going to tell you to invest in property, art, or anything else.