WWYD with £70k

[ChristmasPudding12]

Approx divorce settlement after fees and debts.
Have 2 kids 14&5, full time
No savings
Unreliable car worth approx £7k
In long term rented council property now, it's lovely and fits all our needs. I wouldn't be able to afford to buy somewhere comparable
Earn 17k pa working for a charity part time
Live in Scotland so don't expect to pay uni tuition fees
Have experience of starting an running successful business but it has also been sold in divorce. Loved being self employed. Can't go back to same industry as v niche, do I invest some in starting something new? Save? Invest elsewhere?
What would you do?

1. put aside 6 months living expenses in a cash savings account (15k should more than cover that?)
2. put aside the cash for a new car (another 15k?) Then I'd need to think harder for the next 40k. Do you have any pension provision?

Thank you! Keeping a pot aside for living expenses back up is a great idea.
The car side is scary as seems as though I can spend more on a vehicle than I have before so I think I need to do a lot of research.
I have a very small pension pot at the moment but have recently started paying £80 pm from wages which is also topped up by employer. I'm 32. For the past ten years I've been self employed.

What would suggest for pension?
What options are there that offer good return on investment?

Retrain in something that will make you some money?

Can you buy your house? I would do that.

At 32, you have a lot of life ahead. After rainy day fund and car fund, I would be focusing on you and your life goals. Retrain, start a new business etc. Get your career as you want it. You have another 35 years to work, and your kids will be gone soon enough.

If you wanted to buy a house I would work towards that, unless you are happy where you are for the rest of your life.

I would absolutely start a pension, but would fund it from ongoing income not this pot.

Definitely put some in a pension. Get a lump in this tax year and plan to contribute out of income going forward.

If there's a chance of you being able to buy your council property, that would probably be a good thing to do, but consider that you'll then be responsible for paying the mortgage and maintenance, which will be difficult while you're on a low income.

Which brings you on to whether it is a good use of the money to retrain, so you can earn more in the future.

But isn't your existing car that's worth £7k new enough that it shouldn't be unreliable? Might it be a good investment to trade it in for something that's newer and cheap to run?

Plan to keep a lump in savings and be mindful that while you have this money (although I don't know if it includes the childcare element) it will be stopping you from receiving top up benefits that you would otherwise be entitled to on your income and obvious as a low earner with a 5 YO, you are going to have childcare/holiday club costs over the next few years to cover.

But there are 'deprivation of assets' rules, but I don't know if these apply if you use the money sensibly, ie on retraining, pension, decent car and possible house purchase or if you just give it away.

Another consideration would be, while you say your DC won't have to pay tuition fees, they might need help with university living costs, also driving lessons, or setting up their own homes, so if they don't currently have any savings, it might be worth setting up their own savings - there's probably an investment based child trust fund type product available, that should grow by the time they're 18.

Your 70K is your life savings. Earmark 40K (20K for this tax year and 20K for the next tax year that starts in April) for stocks and shares ISAs because unlike pensions you can access them in an emergency if you need to - Hargreaves Lansdown have a list of top funds you can choose from. It’s a good idea to try and choose income generating funds right now (as they tend to be bank / financial service focused and they are doing brilliantly now that rates are increasing).

The remaining 30K I would put all of it in NS&I for now to keep it in cash and because their £25 awards are really easy to win now due to the way they have rejigged things if you have this amount (I got paid £25 a month for the past 2 years!!) but keep an eye out on cash rates and be prepared to jump onto a good rate when you find it. Best to check moneysavingexpert.co.uk weekly at the moment.

Thanks everyone.
I can't buy the council house I rent unfortunately. It's brand new and I've moved into it from homeless accommodation only recently and there's no Option to buy with this council.
I don't want to spend much on a car but need something more reliable than I have now as it has cost me a lot this year in repairs and I can't really afford to trade it in now. I think I'll look more into this but hoping that maybe just spending £3k and trading mine in will be enough. Rather than spending larger chunk of my savings.
The retraining and career options are really what I'm looking at. Prior to running my own business I was working in well paid sales jobs, that's how saved for business and house. Since covid there doesn't seem to be as many jobs in sales and everything else that I'm qualified to do is roughly what I'm making now £17k for 25 hrs a week. I really need to work out what I want to do for the next 35 years as you say and use the money to achieve that. A lot of thinking to do on this front so suggestions welcome!
I will be setting aside money in saving for both kids, I would hope at least £10k each and was looking for suggestions of best places to put this or spread over a couple of different ones. I think I will need to contact an adviser for help with this.
I do get a small amount of universal credit a month currently and realise this will stop when I receive a settlement so will have to budget for that too.

Oh, yes, totally down grade my car estimate at the top. I'd not factored in the existing car value

I wouldn't set aside money for your kids at this stage. You can help them later if they even need financial help.
Invest in yourself... retrain, qualifications, a buffer to give you time to find the right job rather than jumping straight into something unsuitable longer term. And try to put some money in a pension.

Maybe put some in a LISA, you can put up to 4000 per tax year and the gov will top up with an extra 1000, so 5000. This is locked away until you either buy a house or turn 55, so could be considered like a pension but accessible if you even do want to buy a house, you lose the gov bonus if you take it out early.

Deposit for a house, private school or online tuition for DC.

Thanks for all the best suggestions, they're great and lots of food for thought.
I wouldn't consider private schooling as I wouldn't be able to afford it and there are really great schools locally.
I use a large chunk of monthly budget on kids activities and they're already participating in everything they want to but I'll look to pay these annually to save on monthly outgoings for the first year.
I really need to get my thinking cap on about career options I might post a separate thread for that.
I think re housing, because I currently have a secure low rent tenancy and costs £200k+ to buy anything habitable locally with 3 bedrooms it's not really something I'd be in a position to do for the foreseeable future so ruling it out. I might spend a little on house and garden here as moved in with nothing so it's still quite minimalist and haven't decorated.
I'm going to start a spreadsheet so I can plan what to spend where so I can track and budget so I'm not overwhelmed, it feels like a lot of responsibility.

Don’t know the rules in Scotland but won’t having £70k effect your entitlement to Council Housing? Not saying whether it should or shouldnt, just asking the question in case this hasn’t been thought about 😀