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Original poster

What would you do with this money?

39 replies

countrysidefields · 07/11/2023 12:22

My father sadly passed away. I am set to inherit half the house along with some liquid assets.
It will be around £250k

I have a mortgage which will use some of this money, but there will be around £100k left

Would savings be good, rates arnt great right now or perhaps invest it in something?

OP posts:

BirthdayFlower · 08/11/2023 16:19

TeenagersAngst · 07/11/2023 15:27

Don't invest in shares directly unless you know what you're doing - it's effectively like gambling.

I also don't get the love for premium bonds on here - I had mine invested for a year and didn't see a penny. I think the gains average out at about 3% but for some people it will be 0%.

Pay off any outstanding debts which are incurring interest first.

Then maximise all your tax free opportunities - pension and ISA. If you don't have a company pension, you'll need to make some decisions about a good private pension and the funds available - Vanguard is a good starting point.

Then with the rest of the money, decide if you need access or not - if you do, it's got to be an easy access savings account which for years paid hardly any tax, but now are offering pretty good rates of around 5%. If you don't need to access it, you can tie it up for a year or more and the rates will be higher.

Edited

Premium bonds make more sense the more you have. They pay an average rate of 4.65% tax free- I’m on full holdings and this is roughly what I get which is great given it’s easy access.

They make much less sense with a smaller holding. The problem is that the smallest prize is £25 so with a small holding and average luck most years you will win nothing.

TeenagersAngst · 08/11/2023 16:39

Fair enough @BirthdayFlower

But with regular savings now offering a guaranteed 5% plus, it's tricky. I suppose PBs are tax free which is a bonus.

TeenagersAngst · 08/11/2023 16:40

Just saw a Guardian article which claims that in 2021 and 2022, about 3/4 of all PB savers have never won a prize.

GeneCity · 08/11/2023 17:24

With £50,000 of PBs, the OP would stand a very good chance of winning every month.

Sisterpita · 08/11/2023 17:36

No one is saying PB long term just whilst op makes a decision.

I also understand if you hold the maximum holding in a block the chances of a win are greater. I win nearly every month and am happy with PBS.

BarbaraofSeville · 08/11/2023 20:38

TeenagersAngst · 08/11/2023 16:40

Just saw a Guardian article which claims that in 2021 and 2022, about 3/4 of all PB savers have never won a prize.

The payout rate has increased significantly since then, and many of those will be very small holdings where statistically, winning any prize is unlikely.

However, if you hold tens of thousands of pounds, you are likely to get quite close to the payout rate. Prizes are also tax free, which is useful if you've used up your personal savings and ISA allowances.

Hitchens · 11/11/2023 13:19

countrysidefields · 07/11/2023 12:35

I won't need to access the money for a few years, if I do look at shares will definitely get advice as I no absolutely nothing about them.

I have a car that's only two years old, I could pay the rest of the finance on it I suppose.

Holiday are covered by other cash, I'd like to treat myself but I want to put the money to good use really.

all I would say is don't buy shares in individual companies and don't get taken in by a financial advisor who will sell you a managed fun that charges a lot. £100k isn't a huge amount so paying a % or a fixed fee for advice isn't really going to be good value for money.

You don't say how old you are or what other savings/investments you have or how you retirement planning is looking.

StiffyByngsDogBartholomew · 11/11/2023 19:51

Do you have children ? I'd use the money as an investment to help them get a foot on the property ladder whether now or in the future.

Muddle2000 · 12/11/2023 04:58

What about your pension savings
You normally get tax relief

Weenurse · 12/11/2023 05:03

I did all of the sensible stuff, but I also bought a piece of jewellery as a momento.

Manif3st101 · 12/11/2023 09:44

I would split it down into chunks, £12k to max out your isa, £5-10k in easy access as a slush fund (holidays, new washing machine, house repairs etc) then equalise amounts in an account with fixed interest for 1 year, 2 years and then 5 years. Then as they come to an end you can put that money into an isa or another fixed rate account or the more risky stocks and shares option.

Fixed rate accounts interest rates are great at the moment so good to lock that in at no risk, plus you get compound interest.

Go to money saving expert and read all Martin’s advice though (he doesn’t like premium bonds!) and listen to his podcasts, his advice on finance is brilliant.

jesmonabullets · 13/11/2023 17:24

Pension.

If you have a DC pension then I'd seriously considering topping it up (for DB you might need to do AVCs and im not as familiar with this as there's different schemes). You will receive a tax benefit of 20% as a lower rate tax payer and 40% as a higher rate tax payer. No savings account beats this.

There are many things to consider before someone comes along and shouts me down. Get as much info as you can on paying off your mortgage, car etc. but if your pension isn't great then think ahead. If you set yourself up securely for the future then you can help your kids by not being a burden to them (this is an alternative way of looking at the suggestion of giving them a house deposit, though you may be able to do that too).

If you are salary sacrifice you could increase your contributions to the max and 'live off' your Dad's money (I did this for a couple of months for much smaller ££s but it means the tax is taken care of through work rather than self assessment).

You can also use up to 3 years prior years allowance.

Sorry about your Dad.

Original poster

countrysidefields · 13/11/2023 21:04

There are some really helpful replies thank you so much. My work has been manic lately so I havnt had a chance to look into things.

I will take on board all the suggestions on here so really appreciate everyone taking the time to reply just sorry I havnt been able to get back up update properly.

Once things have calmed down at work I will be able to look at the suggestions made

OP posts:

laclochette · 16/11/2023 08:57

With that amount of money, I would speak to a financial advisor who can get a full understanding of your current situation, your goals, and your appetite for risk, and make a plan for you accordingly in a way that is tax efficient and prudent. They charge for their time, of course, but compared to the money you are working with, it'll be peanuts and I think you will feel so much better with this sort of comprehensive, expert and understanding advice on your side.

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