How to invest £280,000

[user0507]

We are very lucky to have received an inheritance from a relative. It's £280,000 so a good sum of money.

We are also in a fortunate position in that we own our own house and the mortgage is paid off. My pension is good. DH's is fairly good but he is currently (short term only) a top rate tax payer and so he can't stick extra into his pension due to the pension tapering rules. We are both mid 50s aiming to retire at 60.

What would you do with it? I think we probably need to see a financial adviser but I'm not entirely convinced that they're worth the percentage they take.

Even if they were buying in the next few years a lot of that money in cash is just going to be eroded by inflation probably.

While this is true, it’s still the right advice in this scenario.

Eurgh ... Why is the immediate reaction on Mumsnet to advise that you need a financial advisor? Short answer: you don't. Educate yourselves - the suggestion of Rebel Finance is a sound one. Personally in your position I would max out stocks and shares ISAs in global trackers, put some in premium bonds and some in fixed interest savings, assuming you have no big ticket expenditure items such as needing to replace a new car. And keep some aside to enjoy yourselves!

Oh and shares are risky.

Tracker funds are the way to.go

Have just read that you have kids at Uni. That should help you whittle down the £280k! I'd be transferring the wealth, paying the Uni fees, contributing to ISAs and LISAs and setting up SIPPs.

have you already sorted deposits for the kids to get them on tje property ladder? That’s what I would be doing

Ask a tax advisor.

I’m an experienced investment professional and have still found financial advisors useful. Not because they can tell you what to invest in (I can do that myself) but because they can help you clearly define your objectives, assess your total assets and liabilities, and build a structured plan which accounts for tax and risk.

You don’t have to give them your investments to manage. You can just pay a one off fee for their analysis and advice. I think this is what OP should do.

OP, what stands out to me from your initial post is you have this money but you don’t know what your objective for it is. Nobody can give you sensible advice until you decide what outcome you want to create. That might be early retirement, or helping children, or charity donation, or round-the world cruises every year until you’re 90. But you need to decide what it is.

Once you’ve decided that you can then think about how to get there.

What @AlastheDaffodilssaid.
A good professional can help you work through your goals the build a plan that suits your needs.
Some of the companies named on here I would steer clear from.
My DH is a wealth management specialist, read reviews and try to find personal recommendations for someone.

You could use any carry forward pension allowance from last 3 years for you and DH (subject to earning enough for you and taper for him).
You can do anything from a GIA that you do from a stocks and shares ISA but will incur CGT liability and also pay tax on dividends
It might be worth doing anything big to house, garden etc now to set yourself up for retirement.
It probably is worth buying the full value of premium bonds each whilst you decide as at least nothing to go on tax return. I used Hargreaves Lansdown to spread some cash over different providers fixed term savers to stay within fscs rules.

Thanks everyone. Part of the reason this is tricky is that we are currently in a fairly good position.

House is paid off
My pension is good
DH's pension is not as good as mine (still fairly good) but he is in a fixed term senior role and has no wriggle room to put anything into pension due to the taper. Previous allowances are all used because he can basically only put £10k a year into his pension tax free. This obviously means that he is currently earning a very good salary.
ISAs are maxed out but we will put in another £20k each in April
DC also received some inheritance from the same relative and so they have maxed out their isa allowance this year (mixture of LISA and S&S).

We can plonk some temporarily into premium bonds but they are really just savings accounts with irregular unguaranteed returns equating to an average fairly low rate of interest (if you're lucky) with a additional chance of winning a lottery each month.

We should probably divert most of it to the DC but DH is reluctant to do this and feels like they need to make their own way without the path being too easy for them (bearing in mind these are already 19 and 20 year olds each with £30k sitting in their accounts from the inheritance and they also have savings from us).

We should probably divert most of it to the DC but DH is reluctant to do this and feels like they need to make their own way without the path being too easy for them (bearing in mind these are already 19 and 20 year olds each with £30k sitting in their accounts from the inheritance and they also have savings from us).

they have 30k savings but do they also have a huge debt from student loans? Honestly it seems so harsh that you already have good savings, investments and a mortgage free house but you don’t want to give your kids more because they have 30k. You could really be setting them up for life here and letting them have some great experiences (eg travelling) as well as a roof over their head without any stress. But instead you want to make them work hard and stress over it.

if you don’t have an aim for it. Ie travelling and getting some amazing experiences whilst you can. Then let your kids have that opportunity.

If you do a deed of variation into a discretionary trust then the money will not be in your estate. However, you can benefit in the future if you require.

You can also use the money for the DC in the future for deposits etc but they do not get access to it now.

As trustees you retain control and the monies can be invested in the meantime.

Also protects the money from bankruptcy/divorce.

I think even our kids would laugh at this.

They have £30k inheritance, they have £25k in savings from us, they both have cars, they've had a private education and they have no student debt.

I’d give it all to the kids if they are decent and hardworking people.

I don't think people are suggesting it from the perspective of feeling sorry for your kids- sounds like they are doing very well. But if you don't need it and your estate is going to be subject to IHT, this is a very natural point to think about it. I see no point in sitting on money you don't need only to pay 40% of it in tax, especially as it's an amount that could fund a decent deposit.

I would probably use it towards a commercial investment. The upcoming Universal Studios development in Bedfordshire has made the entire area quite lucrative for Air B&Bs

@user0507 The dc have some money but not that much! Won’t go thst far for a house deposit. Does your dh understand the job position right now? It’s very hard for young people to out earn parents let among replicate you and retire at 60 (what a huge bonus that is!). Your dc won’t be doing this.

We have given loads more than this to DC! We too have a big house, no mortgage and lots of savings and pensions. Dc need it more than us. Your DH is out of touch and smug.

Schroeders manage our wealth. Yes you pay but we do well!

Thank you, we will look at this

If you have the interest and the time, I think it's a good time to try to understand how to look after your money - we don't wholly trust financial advisors to pick investments and we didn't want to pay them £££, we used a trusted tax advisor (on a fixed cost basis) to review our very complicated finances (owner-directors of a business, one of us maxed on pensions etc) - we need someone to mark our homework to ensure we were making the right tax and investment decisions. It was money well spent for reassurance that we'd got it right.

Your DC have had a great start in life for sure, but it's not enough that they will never work again.

We just make money by experts investing our money. We’ve had them for 28 years and very good service tailored to us. It’s a full advisory service we have so pensions, investment portfolio and tax planning.

Well clearly not. Nobody ever said that was the case and nether would it be the case if we just split this in half and gave each child £140k. But personally I don't think its a good idea to give £140k to an 18 year old student who already has £30k plus a £10k car plus £25k coming to him on his 21st and who is already larging it in fresher heaven.

I'm with you. I want my children to work hard and appreciate the money they have earned for themselves. Their own self worth and pride. Their ability to make good spending decisions. Their independence.

defiately a good idea to give your kids a deposit for a house.

in the meantime, put £50k in premium bonds, a few thousand in easy to reach savings, have one final big family holiday before the kids start their own familiy holidays and put the rest in your pension. I know you said you've got a good pension but you can always have an excellent pension instead of a good one.

One thing I wouldnt do is buy a property.