If you were to inherit £70k what would be a sensible thing to do with it?

[Greedybilly]

Any ideas ? Isa? Mortgage is finally paid off and no real debt. What to do ? Any sensible ideas very welcome.

You could also use your DH’s ISA allowance if you’re 100% happily married.

@user9764875954- no I'm not in work right now.
Thanks for your comments.

I’ve paid the maximum contribution into workplace pensions since Uni and have a property portfolio. DH and I retired in our mid 50’s.

@Parker231- good for you!

I'd take all those "bitty work place" pensions and combine them into one and then contribute to that one.
It will be much easier to manage then.

As your mortgage is paid off I’d put it in savings for retirement

@NetballHoop- hmmm I've tried several times - easier said than done if you don't have all yhe details from 30vyrs ago

Do you have kids? It sounds like you're reasonably set financially if you've got a pension and no mortgage. Personally I'd take 10/15 grand off the top and treat myself/family to a nice holiday and then put the rest into the kids savings.

This

@Greedybillydefinitely not too late to start a SIPP. You’ll benefit from the tax relief, so your money will work better for you in the SIPP than an ISA. If you can leave it at least 10 years to grow then even better.

I would sit down and work out a plan for retirement. What money will you be able to access and when? I am 46 and only did this earlier this year, including finding those little pension pots from 20 years ago that I had no idea what they were worth. I opened a SIPP earlier this year and am now prioritising investing in it rather than my ISA. My aim is to retire at 60 when we have the mortgage paid off and kids will likely be finished university if that’s the path they choose. I may have to keep up a small amount of part time work after 60, but it’s giving me something to aim for.

@confusedlots- can I ask how did u find all of ur old pension pots ? Thanks

Definitely not too late, I’ve just started a sipp in my 50s. If you’re a tax payer then you get the tax back on it. So basically the govt top it up by 20%. I believe for a lump sum you can put as much as your last years salary, or maybe the last two years salary. So if you can put the full 70k in the govt would add another 14k immediately.

edited, sorry just seen your other post saying not currently working, so guess you wouldn’t get the tax.

if you’re not working you might want to keep some of the money so it’s more readily available?

I've no reason to doubt you, but I stand to inherit a large amount in a few years and was placing on sticking most if not all of it into a pension. I don't work and don't have an existing private pension. Are you saying I won't be allowed to do that? I don't understand why not. That puts me in a difficult position if I can't.

Start with finding your old pensions: https://www.moneysupermarket.com/pensions/lost-pensions/

@Yewlezyou can contribute £2880 to your pension per year if you have no earnings. And you can still contribute £20k per year to an ISA.

Then an ISA, premium bonds and an emergency funds of six months expenses

@Greedybillyone was a very old NHS pension I was no longer contributing to. They were just very slow in getting back to me each time
they asked me for more information, but eventually I got hold of a statement. The other one was an old workplace one which had switched from paper statements to online and I had lost the details for signing up, and had also changed address and not informed them. But they were able to get me sorted out with access to the online portal once I confirmed some details.

It took a while for me to find any paperwork/information I had about the pensions and for them to actually look into my queries, but it wasn’t too bad in the end.

@Greedybilly
If youvegot some time available, it is probably worth tracking down those old pensions - you will need to know about them to be able to get the money at retirement.

If you search "Martin Lewis find old pensions", he had a guide about starting things off.

@Yewlez you can only get tax relief on 2880 a year if you have no earnings.

I should probably start my own thread when the time comes as I think I'm going to inherit about 500k, at least, and I wanted to put half of that into a pension. I didn't realise I wouldn't be able to. I can't even put it all into ISAs! I wonder why they won't let you put it in a pension?

I inherited £50k. Put 20k in an ISA, spent 15k on essential work on the house, 10k on a family holiday of a lifetime and have 5k in an easy access account for things that are a bit too big to come out of the monthly budget. It feels like it has gone a lot further than I thought it would.

Even if you were working you wouldn’t be able to put all of that in. There’s an annual limit. The non-working limit is to do with the tax relief.

@Yewlezbecause you get the tax back on money you put in a pension. Basically it’s money you have earned and paid tax on already, and if you put some or all of that money into a pension they give you back the tax you have already paid. You haven’t paid tax on that money as you haven’t earned it, so you can’t get the tax back.

You could invest in stocks and shares in a general investment account (GIA) once you max out your ISA and put the £2880 per year in your pension. You will then become liable for capital gains tax when you withdraw but you can use your annual CGT limit of £3000 to your advantage here.

I’d seriously encourage you to do the Rebel Finance School course, it’s free and you can catch up on this year’s course on YouTube. I did it last year and I learnt so much and I finally am getting to grips with my finances and retirement planning now as a result, aged 46.

If I had no debt and no mortgage:

£10k premium bonds
£10k ISA
£30k Pension
£20k holiday fund

Some people might have to

I will pay inheritance tax on it though. It all seems very unfair.