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Original poster

100k windfall - what to do?

93 replies

Smarshian · 12/11/2020 19:41

I am about to receive a windfall of around £100k in a few weeks time.
We are early 30s and live in what I would consider our forever home with a £230k mortgage which we are repaying (have 32 years remaining!)
DH has a good pension scheme with forecast 400k at retirement age. Mine is poor, not sure how much is in there but not enough!
2DC both preschool age, high nursery fees, this will reduce significantly in September when DD starts school and DS gets his free hours.
Small credit card debt of around £1500, no other debt. Could do with replacing one of the cars. Have holidays booked and paid for for next year.
Have around £7000 in various savings accounts for short and long term savings.
Help me decide what to do with this money!

OP posts:
Original poster
Smarshian · 12/11/2020 20:19

We certainly don’t plan to move in the next 10 years all being well. The DC will start primary school next year and don’t want to move away from where we are until they are older if at all. We are in a lovely village and house is a good size for us.
Not to drip feed but I’m starting a new job on Monday with the civil service and therefore a much better pension scheme than I have been on previously, I am not sure if the exact details but I believe that employer contribution is good?

OP posts:
Bellevu · 12/11/2020 20:21

Pension, pension and pension

10k for frivolity

Iminaglasscaseofemotion · 12/11/2020 20:23

I think it’s wise to think about where the money is likely to have come from before saying things like this.

I wouldn't necessarily use the term windfall of I was talking about inheritance money.

Lightsabre · 12/11/2020 20:23

Yes, Civil Service pension is one of the best and you can pay extra in. I'd pay off any debt, and pay a large chunk off your mortgage so all bills could be paid from one salary. 10K in a Vanguard life strategy stocks and shares ISA for long term savings.

PlanDeRaccordement · 12/11/2020 20:25

Pension for you.
£400k forecast thirty years from now is peanuts. You need to get your pension to at least match your DHs.

Gifgif · 12/11/2020 20:27

Popcorn? This is Money Matters, not AIBU.

I know but mumsnet can be very weird about things like this and I hadn't noticed it was 'money matters' to be honest.

It wasn't a dig at you, OP. Flowers

carlywurly · 12/11/2020 20:30

This happened to me a few years ago. I changed my car (necessary anyway but I got a new version of the model I wanted - on my debit card Grin)
Updated the kitchen floor and tiles
Got Concert tickets to something fab in an amazing location followed by 2 weeks on hols there
The rest went off the mortgage

I look back now and am happy at how it was used.

StrikingMatches · 12/11/2020 20:31

Why do you have to use it immediately? Spend a little and retain the rest. Who knows what will come up in the short term.

AlexisIsMySpiritAnimal · 12/11/2020 20:33

Is it coming from your side of the family OP?

I hate to be the bearer of negative vibes but if your earning potential has been hit with having kids and his pension pot is already quite healthy- I'd want to safeguard that money for my future. Not saying you can't both benefit but make sure any joint money decisions are taken sensibly.

SonjaMorgan · 12/11/2020 20:34

Pay off debts.
Have 6-12 months of expenses as an emergency fund.
Pay off mortgage (I am of similar age to you and we should pay off our mortgage in 5 years).

Original poster
Smarshian · 12/11/2020 20:37

@AlexisIsMySpiritAnimal

Is it coming from your side of the family OP?

I hate to be the bearer of negative vibes but if your earning potential has been hit with having kids and his pension pot is already quite healthy- I'd want to safeguard that money for my future. Not saying you can't both benefit but make sure any joint money decisions are taken sensibly.

I have thought about this. We are very secure at the moment but yes the money is coming from my side and I want to be sensible with it. My new job is over 4 days but at a decent pay band (£30k), he is currently earning around 45k with bonuses. I will likely go full time in a couple of years when both DC are in school.
OP posts:
Original poster
Smarshian · 12/11/2020 20:40

@StrikingMatches

Why do you have to use it immediately? Spend a little and retain the rest. Who knows what will come up in the short term.
Well no. But I do need to work out what to do with it rather than just leave it in a current account
OP posts:
AlexisIsMySpiritAnimal · 12/11/2020 20:43

I'm glad you've thought about it. I'm coming to the end of a 20year relationship and I really wish I'd not been quite so naive. It's a horrible thought but a necessary one, unfortunately.

MerchantOfVenom · 12/11/2020 20:43

@Iminaglasscaseofemotion

God I wouldn't like to be in your shoes having that decision to make 🙄
If people are going to get antsy reading about other people’s financial decisions, maybe they shouldn’t click on threads in Money Matters.

And if the thread comes up in Active Threads?

Again, the solution - if reading about other’s situations is going to make you irate - is very simple. Don’t click.

Original poster
Smarshian · 12/11/2020 20:45

Is there anything I can do to anyway though as we are married? Surely half will end up his either way?
The house deposit was also mine and I’m under the impression that because we are married it doesn’t matter anyway?

OP posts:
Christmasfairy2020 · 12/11/2020 20:48

I'd pay the 1500 of have a holiday and then bank it for private secondary school

Bargebill19 · 12/11/2020 20:50

I would take proper financial advice.
There are things like investment bonds which still pay well. I’d consider paying off debt and sorting the car, but take advice in investments v mortgage v pension. As you may be better off long term by not doing the obvious in the short term.

getsomehelp · 12/11/2020 20:50

1st can you equal out the pension situation ? at least that way if ever your marriage fails, you have used your inheritance to protect your future

AlwaysLatte · 12/11/2020 20:53

No brainer: mortgage!

AlwaysLatte · 12/11/2020 20:57

NB what we did when we paid off our mortgage was leave a small amount because it was cheap borrowing if we needed to use it, until such time as we knew we wouldn't so we paid the last bit off. Then use your salary to pay into your pension.

Purpler5 · 12/11/2020 21:00

I wouldn’t pay off any of the mortgage - as a PP said, borrowing is cheap at the moment. Pay off other debts if you have them (not student loans). Then I’d keep £10k in cash, £20k in ISA and the rest in pension.

This is good financial advice, if I do say so myself!

GingerFigs · 12/11/2020 21:00

Pension. The more you put in now the more time it has to grow. You said yourself your current pension pot is poor. Don't pay off your mortgage as it's probably the cheapest debt you will ever have.

Agree with PPs around your DH's pension. You need to consider what would happen if you split. I know it sounds grim when you are happily married but do not facilitate everybody else in the family to be better off at your own expense.

You could keep a little aside to pay off the small debt and have some readily available savings in case of emergency. But please consider your future, you will be pleased you did.

GOODCAT · 12/11/2020 21:04

I would:

clear small debt

set aside money for car(s)

Set aside some money to cover nursery fees just to make day to day a bit easier

set aside more for emergency savings so you can go six months if you both lose your jobs

pay off max possible on mortgage without early repayment charges to enable you to increase pension contributions, especially for you

put some money into kids savings to help them through uni. / an apprenticeship

BrandoraPaithwaite · 12/11/2020 21:05

Hi OP. My life situation is similar to yours but without the imminent inheritance. I'm a bit older than you and just 1 dc but very similar otherwise. Possibly my pension is a bit stronger. Here's what I would do:

Pay off the credit card debt
New car(s) as needed but not brand new and sensible, nothing fancy
New kitchen and bathroom, decorate last 2 bedrooms including rewire and skimming so house is finished
Put about 10k in easy access account or premium bonds
If there's any left, probs not much, chuck it at the mortgage

Rapunzel91 · 12/11/2020 21:08

Hi OP, hope you're okay I'd this money is coming through an inheritance ❤

First of all I would spend on something nice! It's a lot of money but its definitely okay to spend a small amount on something just for fun.

  • I would put a large amount in a pension fund, I think the max you can put in is £40k and you will receive tax relief on this.
  • Pay off debt and consider getting a second hand car for the one that needs replacing
  • You have a good amount in savings so I would definitely recommend investing. You can do this through an Isa or independently. I do it myself (only a small amount) through and app called trading 212 and today my overall profit for my portfolio is 36%, more than I would get in any savings account. I invest for the long term so expect my investments to go up and down but will be up for the long term
  • I would also spend some on the mortgage to reduce the amount