Best way to save 80k

[Elonmuskatemytesla]

we have been left some money by a relative.

I don’t want to waste it. This is the only money we will ever have. We might move, we might pay some of our 150k mortgage off, we don’t know yet.

I want to just save it for now. Dh has found some high interest savings accounts but I have the worst luck. Seriously. Something awful always happens and I am terrified he will cock it up and put it somewhere where it’s not safe.

Any pointers or recommendations?

20k each in the highest interest cash ISA you can find, then the rest in premium bonds while you decide what to do?

Would paying off the mortgage reduce your monthly mortgage fees? That would be a very safe way of benefiting from the money. And congrats.

Yes it would do.

we can pay off £50k a year without huge penalties. But taking our mortgage down to £100k would be amazing, dh wage has increased a lot since we took it out 3 years ago so it would make a difference to monthly payments and what we have left over.

But we live in a massive, massive shithole of a place, it’s all we could afford, so we would like to move. Downside of of being a massive, massive shitole is that houses don’t sell fast, so we have time.

And if we move, it will be to a much nice place but with a house of pretty much the same value as we are selling for which will need some work - which is ideally what the 80k would be used for.

What interest are you paying on your mortgage? If it's higher than you'll get in savings then I'd be using most of it to pay off the mortgage.

Two cash ISAs at £20k each. Then £40k in the highest earning variable account with a reputable name that you can find. Longer term, I would keep the cash ISAs as your emergency fund, then use the rest to pay down the mortgage. Then continue your life as before. Enjoy the feeling of security!

4.02%

The MSE website only recommends ‘protected’ savings accounts, those with FSCS protection. Have a look at ‘best savings accounts’ and read the blurb on the actual MSE website. (Not fraudulent quotes purporting to be from Martin Lewis on social media).

The reason people are saying ISAs is that you can earn £1k a year in interest without paying tax. After that you pay tax at your normal rate. Actually if you are a higher tax payer you can only earn £500 interest tax free. However all interest on ISAs is tax free.

If you put £20k each into an ISA and then split the rest into a high interest savings account each you will save your tax liability on the interest.

On £80k you are looking at about £4k a year interest.

If you use the money to pay off a chunk of mortgage, do save the money you would have paid in mortgage each month!

Oh, yeah, we aren’t stupid. We wouldn’t go blowing any spare cash. Although it would be nice to be able to save for a holiday for the first time in 15 years with what we would be saving.

The amount of people encouraging me to blow it all on holidays and a new car is extraordinary! Luckily, we are in our 40s, had years of shitty, over priced rentals in London with no spare money to save, had to move to a dump hours away but we did up a house so won’t have come out of that too badly.

We are sensible. But then I have to balance that out a bit. The person who left us this money scrimped their whole lives to save every penny. They died at 87 with never going aboard, or even a Uk holiday as they wanted to save. They regretted it. They ended up with a house worth 400k, paid off. BUT, all bar this 80k ended up going on care home fees. Three care homes, two that they were neglected in (I’ve had a few years of absolute hell fighting for them, no one cares).So that money didn’t even buy them better care, and they were sat in the same place as people who had nothing all their lives. they should have enjoyed their life instead.

Also, we have no debts at all to pay off, no credit cards etc - if we can’t afford something, we just don’t have it. So we have been utterly sensible over the years.

So this money is purely just to save at the moment.

It’s a shame we hate where we live, if we loved it, I’d pay the max off the mortgage this year and the rest of next year leaving is with only a small mortgage to overpay.

Do you have a pension? Paying into one might be tax efficient.

t’s a shame we hate where we live, if we loved it, I’d pay the max off the mortgage this year and the rest of next year leaving is with only a small mortgage to overpay

You can still do that you know. Then when you are ready to move, you just have more equity from your current house to put towards your next one.

With a mortgage rate of 4% you can beat it slightly with savings but will need to consider tax if you have more than about £20k in non ISA accounts.

I would pay the max you can pay off without penalty and put the rest in the best cash ISAs and the best instant access accounts.

Plus I'd also consider using some of it (say up to around 10%) for something like a holiday or car replacement if appropriate.

That's a sad story about your relative. Something to think about and how we live our lives. Clearly you want to move from the area you are in so get a plan in action to do that. And put a little aside for a holiday and live in the moment.

Well the house is on the market at the moment. So not in a rush to pay anything off mortgage yet, everything is so up in the air.

We're in a very very similar position (working out where to put £80k, want to move but not sure how long it will take, could reduce mortgage to under 100 using the 80k but we'd definitely need to get a new mortgage for new home, I'm freelance and work has dried up for me and things are a struggle at the moment (the 80k needs to ultimately on a new home not propping up my reduced earnings) so I'm worried we won't get an increased mortgage anyway, ANYWAY! I wondered where you ended up with your situation?