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Original poster

Unsure how to use inheritance

60 replies

Moonshine76 · 14/05/2021 15:18

Hi wise Finance Forum followers,
I’ve named changed due to amounts involved but I am a semi regular poster.
My dear aunt sadly passed about 6 months ago, after a long and happy life. She was unmarried and did not have any children and has left me circa £300k, her entire estate. I am gobsmacked to be in possession of such a large sum and am unsure of how best to use it.
I have 2 DC at (state) primary and I was planning on keeping the amount as substantial house deposit money for them when they grow up. My husband thinks we should use the money for private education for secondary as we live near a great private school, which costs £20k a year. His reasoning is that at some point his parents will pass and the children can have his inheritance for a house deposit. The amount is unlikely to be as high as 300k though. We are aware that there are ‘extras’ associated with private school and would make minor cut backs to our lifestyle to accommodate these.
We have middle of the road jobs and live a fairly simple (happy!) life so don’t need the money for ourselves, we have final salary pension schemes so won’t need it for our retirement.
I wondered what others views would be on the best use (we were both state educated so have no experience of the private system) and what you would do in our situation ? Thanks for reading to the end!

OP posts:

hoxt · 14/05/2021 15:20

If your local state schools are good I’d send the children to them & use the money for university & subsequently house deposits.

fruitloop2021 · 14/05/2021 15:24

I'd save it for university, houses, weddings etc if the local state schools are good.
Just because it's private doesn't mean it's a better school. Trust me.

AdoraBell · 14/05/2021 15:25

I would only change to private school if the state school isn’t good. As suggested use the money for Uni and house deposit.

Original poster

Moonshine76 · 14/05/2021 15:28

Thanks for your reply. Our local state school is good but I have heard anecdotal reports of bullying. Our DC are quite academic (not sure where they got that from really!) and DH is worried they could be targeted. He thinks in private they could be themselves more (it’s an academic school) and hopefully increase their confidence levels too

OP posts:

Apileofballyhoo · 14/05/2021 15:34

Try state and if your DC aren't happy, thriving and fulfilling their potential, you can change to private.

Don't use it for university fees, it's better to keep it for a house deposit.

I'd get proper investment advice, it's possible that money could earn quite a lot between now and secondary school time.

PermanentTemporary · 14/05/2021 15:37

Based on my own experience and the experience of those around me, I would very much lean towards state school with the money for life afterwards. But for your dh's sake I would definitely look seriously to see what the private school offers for the money.

It's difficult because family members in private school have definitely had a broader education than my ds had in state school, particularly in music. It has taken an almost infinite amount of effort by the parents involved to make that happen, even with the private school provision. The amount spent on childcare in the longer holidays has been eye-watering too. I don't think the children are at all spoiled or demanding, they're lovely kids, but they do have a much richer benchmark in terms of what is normal in life. That includes the kinds of jobs and pay levels they expect in the future too. Tbh those sorts of broadened horizons are kind of part of what people pay for.

Would your dh consider starting state secondary with private school in the back pocket in case of problems? Or is it the sort of school where you need to commit to serious tutoring right now? Tbh one of the things that really surprised me about kids I know at private school is how much extra tutoring their parents seem to pay for. I dont think this is because of bad teaching, it just seems to encourage a perfectionist outlook.

Bellyups · 14/05/2021 15:50

Is keep kids in state school and use the money to benefit them later in life...house deposits/uni etc

rbe78 · 14/05/2021 15:55

Also, don't rely on inheritance from parents - no-one can tell the future, and they may need years, or even decades, or specialist care as they get older that will require selling their house to finance. (Sorry to be morbid.)

olderthanyouthink · 14/05/2021 16:03

@rbe78

This, so much

Willdoitlater · 14/05/2021 16:13

Do you have enough savings for if one (or both of you) of you looses their job, or gets sick and can't work. Or you need a major op and nhs waiting list is 100 years long? I was taught by my parents that a decent 'safety net' was first priority. Some people would think this advice was joyless and miserly. Turned out to be good advice for me as long-term serious illness meant it was needed. It all depends how risk averse you are.

parietal · 14/05/2021 16:15

agree with the above. keep the kids in state school unless they encounter major problems & need to switch.

do you have a mortgage on your house? if so, you might do well to pay off the mortgage but then systematically put the same amount into a savings account every month. That will save you all the money that you would have paid in interest on the mortgage.

And don't put £300K in a cash account while you wait for the kids to grow up. you need to put it in a diversified investment account with low fees, for example a 80 / 20 mixture of ETFs and bonds. Otherwise the value will get eaten up by inflation.

BackforGood · 14/05/2021 16:36

I'd invest it. Well most of it. Treat yourselves too. Have some lovely family holidays that were never on your horizon when we can travel again.

I wouldn't spend it on private education.
I mean, if you invest it, and one of the dc is unhappy at school, then look at your options again, but
a) don't assume they will get bullied at state school
b) don't assume they won't be bullied at private school

Don't spend it on university fees either, but investing for a sizeable house deposit each will save them so much over decades in terms of better mortgage rates, and paying rent for ages before they buy, and moving costs by starting higher up the ladder etc etc.
That's what I'd do.

But do treat yourselves too.

skeemee · 14/05/2021 16:54

Buy them a flat each now (I presume will need to be in your names or possibly some sort of trust)? Rent them out and sell them when it’s time for them to get on the housing ladder. The rent received plus uplift in house prices will be fairly substantial (if you pick the right area).

BrieAndChilli · 14/05/2021 16:55

you do realise there is bullying in private schools too!! often not as obvious as state schools. drugs can also be a worse problem in private as those kids have the money to buy them!!

I did read an article that private school is the worst investment for your money and that things like house deposit etc are a better use of the money in terms of setting them up for life.

of course if your stae school is really bad then private might be better.

I went to state school until 15 and then private until 18 so had experience of both.

skeemee · 14/05/2021 16:57

Obviously if you live in London, £300k is not gonna buy one flat, never mind two!

HopeClearwater · 14/05/2021 17:02

Get advice from a recommended IFA

caringcarer · 14/05/2021 17:04

If their state school is good keep them where they are with their friends. In addition consider topping them up with tutoring in a couple of subjects. This could increase when they get to GCSE and A level. They could have a car, help at uni and deposit for house and you would still have some to spend on holidays and extras.

Gingernaut · 14/05/2021 17:12

State school and pay for any extra tuition?

littlebillie · 14/05/2021 18:20

I would think about gifting some of the money into trust for the DCs, when they go to buy a house they can loan from the trust and it protects the money from divorce and bankruptcy

lolawasashowgirl · 14/05/2021 18:26

That's a life changing amount of money - how wonderful! I strongly urge you to get some advice from a qualified independent financial advisor - the website unbiased.co.uk will help you find one in your local area. I don't mean this rudely but please please don't make life changing decisions based on the advice of well meaning strangers on this thread who don't know your personal financial circumstances, financial priorities or appetite for risk. The only other thing I can add is that making financial plans based on the assumption you will inherit can be extremely risky - care costs can obliterate people's wealth. I say that from a personal experience - my grandmother went into a nursing home at 92 and by the time she died at 100 almost all her money had been spent on fees - the best part of £400,000.

SpeakingFranglais · 14/05/2021 18:33

@Moonshine76

I know someone, now early 20s, who was bullied mercilessly at Marlborough College.

Do not assume private school will be exempt from the same.

Disfordarkchocolate · 14/05/2021 18:36

I'd aim for using it for top ups like tutoring before exams and stay in state. I'd then use some for their University costs and a house deposit.

I think it would be a waste not to enjoy some yourself too.

Movinghouseatlast · 14/05/2021 18:40

You run the risk of educating them out of their class by sending them to private school. It happened to me and I had nothing in common with my family.

Do you really want nothing for yourself? You could retire earlier for example, go part time, have fantastic holidays, a hot tub, nicer house....

LizziesTwin · 14/05/2021 18:42

Don’t spend the money on private school fees as there is a big push to ensure appropriate access to children from state schools so they will be penalised.

Movinghouseatlast · 14/05/2021 18:42

Oh yes, and my partner was horrendously bullied at boarding school. Went to a state school after he ran away and was much happier.

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