What would you do with 100k inheritance

[Savannahview]

Ok, so I've named changed and I'm reluctant to ask people in real life! I will be shortly inheriting approx 100k. We have a mortgage of approx 98k with 12 years left. We are comfortable but not high earners. About 5k on a credit card. 2 teenager kids. What would you do?? Spend, save or abit of both! I do want to enjoy some of it, my parents both died young so I am a firm believer in living life whilst you can!

For myself I would pay off my mortgage and use the money we spend on the mortgage to pay into a pension for me.

If you're on a fix you'll only be able to pay off 10 percent of the total owing per year.

So I will change my answer -- in that case I would set up a monthly overpayment not exceeding a 10 percent overpayment per year. I would also pay off the credit card, and put the rest into savings ready to pay more off the mortgage balance at the end of the five year fix. At that point, you can reduce your loan amount as much as possible and then you can negotiate a new fix with the new lower mortgage.

1. Pay down high interest debts first (credit cards, car loans etc)
2. Find out how much you can overpay your mortgage each year without penalty and make arrangements to pay that amount off the capital. Mine is 10% of the loan amount annually but check what yours stipulates).
3. Go on a bucket list holiday with the family. Make some amazing memories.
4. Fix anything around the house that's been bugging you for lack of funds. New bathroom? Lick of paint? Broken paving?
5. Invest everything else into a stocks and shares ISA. £20K before April, £20K after April when the new tax year starts.

I'd be planning to share the ISA savings with the kids down the line but I'd keep hold of them for now and wait for the right time depending on what they need.

Oh, I didn't know this.

Wow that's a good lump sum! How much is your mortgage each month?

Pay the mortgage off. Check what you can pay per year without charges we can pay 10%. But in reality if I had enough to clear it I’d pay the charges

You could put half into an offset mortgage, so you don't get taxed on the savings element but paying off he mortgage. You may be able to reduce your mortgage payments to make life easier now as well.

Get some specialist financial advice on this compared to investing in an ISA.

Definitely treat yourselves and the children on a fabulous trip.
I agree with PP about putting some away for the children for driving lessons and first car +insurance.

1 clear your credit card debt
2 short term savings account 3 months ( ideally 6 months and if employment is very vulnerable 12 months could be better still) living expenses
3 enough money set aside so you can buy your next car in cash an ISA is good for this
4 get all maintenance done to house
5 is anything on it's last legs
6 something to remember your parents by... it could be a holiday it could be a nice piece of jewellery or a handbag or piece of art etc
7 put rest in bank while you decide

things to check are your NI years up to date for full state pension it is almost always worth buying years if not; it is easy to check online
how is your own pension provision?
put money aside for your children but keep it in your names for now if it is in their name they are entitled to it all at 18, then you can decide if it goes to driving lessons a first car or perhaps even a house deposit or you let it earn interest then swap it to their names at 25, I don't know the extent of the youngest special needs so it maybe perfectly in order to give eldest the money but to maintain control of the similar sum for the youngest
the best CASH isa's are currently just over 5% which is higher than your mortgage rate
that said there is a sense of financial stabilty and certainty that comes from having either alow mortgage or none, this depends on your attitude to risk
at present the money is yours but the minute you spend it on a new family car or pay off some of the mortgage it becomes a marital asset.

MN mortgage overpayment obsession strikes again. Ignore that you'll likely pay penalties, that you can get more interest in savings, that you might need something like a new car or home improvements, or that if you invest, it will likely grow faster than what your mortgage costs you, or that you'll get tax relief if you put it in a pension, gotta pay the mortgage off no matter how little sense it makes.

Pay off the credit card and consider paying off some of the mortgage, but only what you can do penalty free. However, if you haven't used your ISA allowances yet, you can park £80k between you and DH in a Trading 212 Cash ISA, earning 5.12% tax free between now and the new tax year, just put next year's £40k in the highest paying instant access savings account until then. So earns more money than your mortgage costs you.

Then think about whether you want to top up your pensions or invest some. Plus maybe spend a percentage on something like a holiday or other treat. Or if you foresee a big necessary purchase like a new car or home improvements that might be a good use of the money and save borrowing at a higher rate.

We were in a similar situation. We maxed out ISAs and pensions. We didn't pay off any mortgage because our mortgage rate is still below what we get in savings interest. The tax relief on the pension contributions made it a no brainer. Paying off the mortgage isn't always the best financial decision but it's about emotion as well as maths. Maybe have a look at this video.

I would:

• Pay off the credit card £5k
• Put £10k in Premium Bonds as my instant access 'emergency' savings
• Put £20k into a S&S ISA in my name right now, designated as £10k per dc, for the future at some point.
• Designate £40k to overpay the mortgage - use your and dh's next years ISA allowances to hold it (cash ISA's) and then drip the money in in overpayments, however much was allowed. Leftovers paid in a lump at the end of the fixed term.

Remaining £25k - I'd SPEND IT. Holidays probably but whatever you'd all enjoy. Life is too damn short to be 100% sensible.

Pay off credit bill. Put £10k.in savings then split the rest between my DC and foster DC so a 5 way split.

Ooh - I would:

Open a kids isa for each child and put a chunk in for first car / uni savings

Nice holiday

Invest / save a bit

Do up the house / overpay mortgage with anything left!

Pay off the credit card.
Put an amount in each of the kids savings account.
Have a great family holiday.
Pay for the kids driving lessons.
Give everyone £2k to splurge on what they like.
Then put the rest away.

I don’t know enough about mortgages to know whether you should pay it off etc but if you and DH are managing the bills ok then I’m not sure it would be worth it.
A holiday would be way better 😁

It would all depend on when the fix ends and what are the penalties if you over pay?

If penalties not too bad I’d pay off about 80K off the mortgage, then use your monthly mortgage payment to save for fun/holidays/children etc.

There really is nothing like being mortgage free, we paid ours off last year and its an amazing feeling.

Don't forget you can usually pay 10% on the mortgage a year. If you took the mortgage out in eg May, you could pay 10% now and then another 10% in May without any fees (double check with your lender first of course)

Consider your interest rates on your mortgage before overpaying. We’ve just stopped our overpayments as we’re earning a lot more putting it into investments. Obviously you need to watch how much are in ISAs for paying tax on the interest.

With a £5k credit card debt - you are not managing your spending. It’s not a time to splurge and waste - it’s a time to get your house in order and become more financially secure. Try and plan, develop a budget, don’t forget to keep a rainy day fund to cover unexpected bills and I don’t mean the things that happen every year - I mean the unexpected, stop relying on you credit card.

I'm unsure how UK mortgage rules work, but if possible, find a way to pay off the mortgage. We paid ours off 18 months ago and without the payments eating up our wages we have a lot more money free to enjoy life.

We're able to start travelling (with DC) and saving to buy newer cars, and putting more into our pensions & DC investments. We don't have huge incomes, either.

Invest it. Big names in Nasdaq and US markets went up 30% last year!

And trumps caused a mini crash so there are some good prices out there atm and it will crab sideways for a bit with uncertainty.

So a good time to DCA in!

When you get to the end of your fix reassess and take a view about the mortgage.

No tax benefits from putting money into pensions unless you do it through paye - I steer away from the pension idea. It’s also locked away so no access if you really needed it.

In order to make this decision, you need to understand what penalties apply if you pay off your mortgage in full. No one else can tell you this - you need to check your actual mortgage product. If there are minimal penalties (unlikely) then I would pay off the entire mortgage. This will be hugely freeing and leave you with a lot of extra income to throw at paying off your debts and having a better quality of life, plus building savings. If not, I would put £20k each in ISAs each year, pay off your debts, and trickle in as much from the rest as you can pay off your mortgage each year without penalties so pay it off as quickly as possible.

This just isn't true. You get the tax benefit if you use a SIPP too. The provider claims it back for you. And higher rate (if relevant) from your tax return.
Yes the money is locked away so timescales need to be considered but it's also gone if you put it in your mortgage.

I'm not saying it's what OP should do. But for people saying... " pay off mortgage, it's a no brainer, do the maths"... the maths usually don't point to paying off the mortgage.

I’d pay 70k off the mortgage, 15k to clear debt - car loan, etc, and then £15k on a couple of amazing holidays.