Financial planning following windfall

[Hummussapiens]

I am in the extraordinarily privileged position of just having paid off the mortgage on my small flat in full, thanks to an inheritance. I am in my mid-30s, no kids and no plans to have any.

I have maxed out my premium bonds.

I have maxed out my ISA allowance for the year. It is split between an easy access cash ISA and stocks and shares one.

I have a house repairs and maintainence pot of 5k.

I currently contribute 9% of my salary to my pension, matched by my employer.

I still have a lump sum of approximately £10k to work out what to do with. Going forward, I will also be in a position to save/invest £500-700 per month.

Life plans:

• I may wish to study a second degree for pleasure or retrain at some point
• I may buy a joint house with my partner in a year or two (but would keep current property as security)
• I would like to travel
• No thoughts of retirement yet but would be nice not to work right up to 68

What would you do? I really want to be responsible with my money and secure my financial future rather than blowing/frittering it.

You have lots of different ideas but some immediate thoughts that occur to me are make sure if you buy property with your partner that your deposit is protected - whether you both put in the same deposit and want to buy as joint tenants or if your deposits are different amounts you can buy as tenants in common and protect your share.

If you would like someone other than your partner to inherit your share of the property then you would need to buy as tenants in common because joint tenants automatically inherit the property from each other.

If you buy property with your partner and keep your flat you will have to pay second property levels of stamp duty on the purchase, as well as tax on the rent received (less deductions for repairs/insurance etc) and obviously pay the interest on the mortgage borrowing for the new house.

You might be better off selling the flat and for example if you went halves on a 400k house putting your half in cash and your partner does their half cash and/or mortgage.

As you don't want to work until 68 think about how much money you will need each year of early retirement. That won't be the same as you earn because you are able to save but there will be inflation. But for example if you think you need 20k to live on each year then (very roughly) you would need up to 100k to retire 5 years early - not quite that much due to interest but depends on interest rates at the time.

You could put money into a private pension but it is then locked in until you are 57.

A second degree sounds very expensive- won't the fees alone be about 10k each year? If you would intend to stop working to do this degree that would be a massive hit on your finances.

Assess what your pension pot will be at 50 and 55. Maybe put more into your pension?

Do not get married.

Buy any future house as tenants in common - each own a %.

Make sure you have a will.

I’d put your extra £10k into as good an easy access savings account as you can find now and then into an ISA next tax year in early April.

I wouldn’t keep £50k in premium bonds long term - on average returns not as good as other investments. Though I guess you may need that money for a house deposit. If you did buy with your boyfriend, how much would you need?

These are good ideas, thank you. If I were to buy with my partner, 3 bed houses in the area are around 300k and we'd put in 10%-25% each as a deposit. I will definitely bear in mind about TiC, ring fencing deposits etc