Savings after using up ISA?

[Ohdearwhatcanthematterb]

I know I’m in a lucky position.

I am already using my ISA limit so can’t invest there. Due to the new inheritance tax on pensions my dad has decided to start giving us income from his pension now. He’s giving me £1k per month. I’m in two minds about what to do with this. I don’t need immediate access.Any inspiration? Thanks.

I would open a SIPP and invest at least some of it in a global tracker fund. You will get 25% added if you are a basic rate tax payer.

Pension, overpay mortgage, Enjoy some of it.
I would not get involved in offshore investment bonds or even a GIA, just keep it simple.

If nothing else is an option, then GIA is next step but you are dealing with capital gains, though there is some capital gains allowance this tax year.

Premium bonds, and then drip back into an ISA in the next financial year.

SIPP or mortgage

returns on premium bonds is awful - lots of coverage about this recently on financial podcasts and by Martin Lewis etc

Thanks everyone. I think I’ll look into adding into my SIPP. Our ISA allowances are tied up going forwards with an inheritance and our mortgage is paid off. We are very lucky I know. We do have an advisor and I’ll talk with him. I appreciate everyone’s comments.

I too would add some if it to a SIPP, or / and overpay mortgage. Premium Bonds are a bit of a pointless unless 1. you have other savings accounts paying you a guaranteed amount and 2. You have the full £50k in PB’s or close to it.

Lots of very good options already listed.
Another possibility is buying low dividend, short term gilts at a discount (UK government bonds). Although the dividend is taxable as income, most of the gain is at the end of the fixed term when the bond is repaid. Gilts don't incur capital gains, so the profit you make when it matures is tax free.

https://www.moneysavingexpert.com/savings/uk-gilts-lower-tax-savings/

We're in a similar position with ISA allowances used up for the next few years. SIPPs is definitely a way forward - yours, and your kids' if you have them.

The other thing we did as a one-off was install solar panels and a battery. Much of the return on that investment comes as reductions in your electricity bill (which you currently pay out of taxed income) and there is a tax-free allowance for whatever you sell back to the grid as well, plus a trading allowance on top of that which you can use if that's not already spoken for.

Final word of warning - if your Dad is gifting £1000 a month then if he dies within seven years then it will still fall under consideration for IHT anyway. Make sure that whoever is his executor keeps really clear records of it all!

@InveterateWineDrinker I understood that regular gifts out of income which don’t affect your standard of living don’t count as PET’s and therefore no IHT would be due. Needs to satisfy certain conditions but I suspect this is what the OP’s father is doing.

@Mumski45 You may well be right. I'm applying for probate for someone at the moment and haven't had to delve into details on PETs, but on the blurb that does come up automatically it just refers to a max of £3k per year.

There's also the question of whether the gifts are coming out of income or capital. Long story short - look into it in detail OP!

Don’t worry my dad is on it!! He’s very clued up on all of it.