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What to do with 50k

6 replies

sal1223 · 29/01/2022 18:49

Could anyone tell me
What they would do ?

I have this money from house sale / divorce . I rent and work and would like to invest but don't earn enough on my own to get a mortgage on anything . Ideally though some kind of income would be great as we are just getting by hand to mouth . I feel it would be a shame just to keep eating into it every month on expenses until it's gone . Any advice much appreciated

OP posts:
BarbaraofSeville · 30/01/2022 07:23

Are you certain there's no chance of you being able to buy in the next few years, even if it means moving area?

With £50k, that could be a really good deposit on a 2/3 bedroom house in many parts of the country, that you could get a mortgage for, even if you earn NMW as long as you work full time, so don't completely dismiss that as an idea, especially if your medium term plan could be to buy when your DC have grown and you only need a small property for you, as this would be security for you when you're older.

What are your current circumstances, age, any DC and their ages, any chance of retraining, any ties to where you live now? What are your pension arrangements?

If you invest, the money is likely to grow faster than a savings account, but you'll need to ride out ups and downs in the stock market - what you need to avoid is having to take money out when the market is down, as that crystallises the loss.

But on £50k, it's going to be several years before it grows significantly, even if you invest it all and it grows well so while you don't want to just fritter it away, if you're currently struggling to make ends meet, it might be a worthwhile use of the money for some of it to (carefully, ie top up your income by a few hundred pounds a month, not spend it all on big cars, fancy holidays and high end gadgets within the year) make your life easier over the next few years. No point living hand to mouth with £50k available to you.

Something else that is relevant is that, if you're genuinely short of money, as in you don't have enough for a decent basic standard of living, if you didn't have the £50k, assuming you have DC, you are likely to be entitled to universal credit to top up your income and help with childcare costs if you need this, so you should spend the money on living expenses because when it reduces to under £16k, you'll then be entitled to help.

Could you use some of the money to invest in a career, retrain so you can earn a better salary in the future? What about buying a decent car, so you won't have car expenses or worry about keeping a banger on the road for a while? Or driving lessons if you can't currently drive and this would open up better paid work to you?

But assuming you don't plan to spend a lot of it as suggested above over the next year or two, you have a £20k annual ISA allowance so what you could do is put £20k in a S&S ISA before the end of this tax year, another £20k in next tax year and keep the other £10k in cash in the highest paying instant access savings account you can find. That's probably the best use of the money in terms of making it grow as much as possible while you decide what to do with it.

Sorry, that was long but it's not a straightforward question and I've still probably missed something (eg pensions) Smile

stuntbubbles · 30/01/2022 07:26

Are you hand to mouth because rent is expensive or income is low, or a bit of both? If there’s any way you can relocate to get on the housing ladder again, and the mortgage would be less than rent, I’d do that with it. Otherwise as pp suggested, investing in training to create better-paying job opportunities. Then put the rest in a S&S ISA.

What’s your pension situation?

sal1223 · 30/01/2022 08:29

Thanks for the replies , sorry I was vague . My situation a little complicated I suppose . I will inherit the property I'm currently renting from family . I have 2 dc's one with additional needs . Where we live at the moment couldn't be more perfect in terms of accessibility , close to school , work , family etc - massive garden for them to run around in so I don't want to move . My job is with family too and luckily gives me the freedom to up and leave if school call and there's no issue with taking time off if my youngest is unwell / struggling . I don't pay a high rent and when I say hand to mouth , with what I earn and child maintenance we have enough to get by . I'm not concerned about mine and the children's future financial situation as we will one day end up very secure . So really it's looking like I will end up spending the 50 on having that but extra every month for trips and new things I suppose .

OP posts:
BeeLady15 · 30/01/2022 16:08

How sure are you that you will inherit the property? Many people have relied on inheritances that never materialised.

Dontfuckingsaycheese · 30/01/2022 16:14

We put £50000 into our shared ownership house so now we only pay £200 pcm rent. Works for us 😉 Eventually we may inherit and staircase to 100% and apply for freehold which is free but you still have to apply. The number of times I’ve drilled that in to DS!!

Winter2020 · 30/01/2022 21:39

Hi OP,
You seem fairly sure that you will inherit the house that you live in so I assume it is owned by your mum or dad?

Would there be any scope to explore buying the property from them (massively under value) with your 50K? This would ensure your security in the property if they experienced huge care expenses for example. (this is not a deprivation of assets issue if your parents are healthy/not in need of care and not disposing of the asset to avoid care costs). To be allowed to buy the house under value is more realistic if you don't have siblings I would think.

There is nothing illegal about buying a property under value (they could give it to you for free if they wanted to). You would need to take legal advice on the stamp duty situation.

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