What to do with an inheritance

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I’m recently retired (67) and have a small pension plus full state pension. I own my property worth 250,000. I live comfortably but would like to buy a car, go on holiday etc as I’ve not really had enough for that for the past few years.

I’ve just inherited 250,000. What should I do with it? (I know I need to speak to an IFA) but any ideas on good ways to invest? Ideally I want to spend as much as I can and enjoy life to the full but also be mildly sensible 😉

Firstly see if you have any state pension missing years…

Future proof your house. This is an investment in your biggest asset!

Investments - maybe lock in some of the fixed rate bonds at high interest rates… all the banks have some. i am sure other people will have more ideas here. I’m guessing maxing out this and next yea’rs ISA would be good… depends on your attitude to risk of course.

Have some fun!

Put it in the best instant access interest paying account for now but you will pay tax on the interest earned on that amount so fill up your cash ISA allowance and you could consider premium bonds, there's no immediate rush on this as its now September so you don't want to put the money in until late in the month.

The answer will probably be a combination of the above and investment products. Don't forget that you won't need some of this money for a decade or two so risking less of an issue.

It might still be possible to put some money into a pension for the tax relief but I think the rules are different once you are at retirement age.

Have a look at the current series of the Meaningful Money podcast which is going through the financial flow chart. You can miss out most of the episodes but the last few talking about preparing for retirement and drawing down money to minimise risk will be relevant.

But in your circumstances it will definitely be worth talking to an IFA but if you're knowledgeable and interested you'll be able to have a one off consultation to set things up and won't need to pay for ongoing advice or annual reviews.

Also have a look at the rest of the Meaningful Money site so you can make the most of your consultation and think about your attitude to risk and the amount of hand holding you're likely to need/want.

Treat yourself a bit too! Nearly new car, nice holiday or three, house upgrades.

Boring Money is excellent for financial info

Interest rates are very high at the moment. You are only guaranteed £85000 per institution so look for building Socy that are household names.
I have my money with Ford money, Leeds BS, Yorkshire BS, saffron, and Skipton.

Their accounts are all easy to operate and each has excellent customer service. I would open up a cash ISA if you don’t already have one. Then i would open a variety of 1,2, and 3 year accounts.

I would keep a or £50,000 in an instant access account, paying around 4%. This can be your spending money for this year and also for emergencies.

Although the stock market is on a high at the moment, I would be very wary of investing my money there. I like to keep a good bit of money accessible in case I need private health care. I have had a few minor operations, which saved me going on an NHS waiting list.

Also. National Savings is very safe. They have just launched a 1year account paying 6.2%