if you find out that you can pay down however much of your mortgage you wish when the fixed term expires, then it’s better to invest for 2 years rather than pay down early, provided the after tax interest and after-fees interest rate you can earn on the money exceeds the interest rate you are paying.
that probably works within an ISA but is more difficult outside, due to taxes. The ISA investment in a given year is limited to £20k, or if you are married and if you consider this as ‘family money’ then you could put an additional £20k in your husband’s name to be able to invest £40k tax free in total. However, if you have even the slightest wish to keep the inheritance money separate and in your sole name, then don’t do that, and instead put £20k this year and then another £20k after the new tax year starts.
An alternative to the fixed ISA might be to buy gilts within an ISA. That would have more fees attached so you might earn a bit less, but one benefit of the gilt is that if you change your mind during the 2 years and wish to invest the money in something else, you could sell the gilt. There could be a small loss in case of sale if interest rates have gone up, but with a fixed ISA you might not have the option at all to access the money early.
That still leaves either £10k or £30k. you’d have to deduct taxes at your marginal rate as well as possibly fees to work out whether it’s still better than overpayment on the mortgage, or at least equivalent. If you’re a basic or even a higher rate taxpayer then my guess you probably still come out ahead with the gilt or savings, but if you’re in the 60pct band then the mortgage overpayment might be slightly better. That’s with current interest rates which are just over 3pct. Premium bonds are another option: lower interest rate than the gilt, but winnings are not taxable.
The one thing that is clear is that leaving it in a low interest bank account is the worst option. You should be earning at least 1.8-2.0pct net of fees and taxes in the current environment.