what to do with a lump sum of money

[marilynmonroe]

in a few months DH and i will have roughly £20k to put aside in one way or another. We don't really know what to do it with.

We are saving for private education for our DCs, we want to send them from secondary school age but might send them sooner. So we thought we could put it into the isas we have for this

or

we could put it towards the mortgage, our interest rate is going up in sept so that would help keep our monthly repayments down a bit

or

we would do some high risk investments. We currently have some stocks and shares but are all low to medium risk

which one do you think will be the one that will be most financially sensible?

or is there another area we could put it in?

Thanks all!

They've all got merit. The ISAs are very safe, tax-free, easily retrieved when you need them but the interest is quite low and you couldn't put away all £20k in one go. Reducing mortgage payments means you have more disposable income but the capital is rather tied up until you sell the property. Higher risk investments are a white knuckle ride at the moment. Big rewards potentially so could be a long-term option but best to invest money you won't miss. Pension contributions could be another option for the long-term. Fixed rate bonds might be a good home for anything you can't squash into the ISA.

If you already have shares etc presumably you have a bit of money already, so have a financial adviser? If not might be worth speaking to one.

I think at the moment the safest thing to do would be to put what you can in a cash ISA, and the rest into a fixed rate bond; the longer you can tie it up for, the higher rate you will get just as long as you don't foresee yourselves needing the money before the term is up. We have lost quite a lot over the last 5 years on even our low risk investment products and will not be putting anything at the mercy of the markets for quite some time, if ever! They say never gamble more than you can afford to lose, which in our case means £0! We need to keep ever single penny we can at the moment!

Ever = every

Will have to look up fixed rate bond. Sounds good.