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!

Agreed but there are limits for the tax relief into you sipp - your total annual salary or £60,000 per year.

Spend a little bit (£5k) on something fun like a holiday, and put the rest into retirement savings. Sorry, I know it's boring, but your DC will need help with house deposits, weddings, uni fees...etc. and if you want to enjoy travelling once you're retired you'll need a big chunk of change.

Check the terms of your mortgage. Usually you can pay off 10% of the outstanding balance each year without charge. But check when the year cut off is as it might not be the calendar year, meaning you could still potentially get two payments of 10% in each year.

Make sure to keep an emergency fund of six months' expenses set aside. A cash ISA with easy access would be a good place for this. Look on the Money Saving Expert website for best current deals.

I'd also check out the Meaningful Money podcast for sensible advice on investing the rest until it can be paid into your mortgage.

Depending on your age and current pension arrangements it might also be worth putting some in there. You get tax relief on the contributions so it is efficient.

A tip I once got on MN which i try to adhere to is save half. So put half in savings, pay off credit card, overpay some on the mortgage (check the charge free limit), do something you love and pop some aside for kids?

If it was me, I'd pay someone to sort the garden out, including DH's "projects" 😅, get a new bike and put 10k in DD's isa.

Pay off my mortgage, then new kitchen, solar panels and car .

wouldn’t have much left after that, but I would then be able so put £5k into some sort of savings and £5k for a great holiday we wouldn’t be able to have otherwise.

hopefully the solar panels would save me a bit in the long run , and I would have an extra £500 per month from the mortgage. It needs to be.

I wouldn’t give up work, but I would drop a day

I'd swap the 5k credit card to an interest free card, don't pay it off if you can get a swap.

Some into premium bonds, max out your ISA's , pension top ups and enjoy some spending money too.

Assuming joint finances between you and DH.
Pay off credit card and going forward pay it off in full each month if you keep it.
40k into ISA now and again after April for both you and DH.
15k left - either pay off bit of mortgage/save for kids/holiday.

Also bear in mind you can put £20k into a cash ISA now and then again on 6 April. Don't hang about on the ISAs because there are a lot of credible rumours flying that the government is going to cut the limits or potentially abolish new cash ISAs going forwards, so get in while you can!

I've had a good think and made some decisions. Ive asked the bank what my limit is for a charge-free overpayment. I'm not going to pay the whole mortgage off - we pay less than 1k a month which is totally manageable for us. If situations change in the future, I can reassess. I would like to save some interest and cut the term down a little though so I'll wait to see what they come back with. Credit card will be paid off straight away - it's interest free right now but would be good to clear it. 20k into an ISA and another 20k in April. I'm then thinking of putting 10k into premium bonds.
Marriage wise - I know you can't be 100% sure but we are pretty solid. The savings will be in my name only. I would like to spend some on a cabin for the garden - extra room for the teenagers as we have an open plan house so no where for them to have friends at the moment. Holidays for this year are already paid for. The inheritance is from my grandmother who saved all her life for me and my sibling. I am so grateful but I can't help thinking she should have enjoyed some of it herself! Life is short.

But they stated in the last budget that the allowance will remain at £20k until 2030. How credible are these rumours and what is the source?

Thanks for the update - sounds like a well thought through plan.

Recently had the same although the amount was a little smaller. We did
20ish k on essential house repairs/improvements
10k into my pension
10k emergency fund
20ish k put aside for DC
10k for holiday
Paid off all debts except mortgage

It has been life changing for us as we could finally be debt free and have a safety net. I'm sure he would rather we have spent it on something fun though, so I do struggle with that a bit.

There's lots of press coverage in the broadsheets at the moment on this. Industry figures have been urging the government to limit ISAs to stocks and shares ISAs. Nothing concrete at this stage, but I can see it being attractive to Rachel Reeves as a way of reinvigorating UK capital markets.

It seems unlikely changes would be retrospective, so personally.i think if you've got money you think you'd like to put in a cash ISA then crack on and do it just in while you can. You can always withdraw it again if you go easy access.

It's hard to spend a lot on having fun, though, if you have debts, things that need to be done in the house and no savings. You had a great holiday from the sound of it, so that would have fulfilled his desires, don't you think?

Ask your mortgage provider how much you can pay off & overpay without penalties.

1. Pay off credit card and chop.

It up

1. Everybody gets £1000 to spend
2. Book a special holiday
3. Reserve £50k to half tge mortgage when yiu can penalty free
4. Invest the rest for rainy day money

But you are paying 4.7pc interest on your mortgage which will wipe out your ISA gains!

This is a no brainer pay of your mortgage

set up a standing order for £166 for ten years for each of your children which will give them 20k for a deposit to get on the housing ladder

Or even pay 80k off your mortgage

Yes I understand that. I will reassess once my fixed term is up.

Invest the capital and use the dividend to pay down the mortgage.

Pay off the mortgage

That only works if the interest gained through investment is more than the interest paid on her mortgage. She's on nearly 5% with her mortgage, so she should focus on paying it off ASAP.

My global tracker fund in an ISA wrapper has gained 20% in the last year. Yes there's a risk attached but... look at the historical facts and statistics.

This is an excellent video and I really recommend Pete's videos for advice

If any of the kids are 18 or over then look at a LISA as an investment.

Do the kids need cars or the ability to drive for their apprenticeships ? Are they likely to start their own business after the apprenticeship finishes? For example someone studying for a trade may need to invest in tools.

I would talk to the mortgage company about overpayments. I can only overpay 10% without penalty so I would set aside a few years worth of overpayments.

Paying off the credit card would be the first thing I did and booking a holiday. Is there a trip of a lifetime sort of thing that you’d like to do? For example I see a lot of threads mentioning Japan which might interest your kids too.

I'd put a lump sum into the mortgage (depending on the restrictions/penalties).
£10k into savings for each child.
Pay off debt.
Nice family holiday.
10k on house renovations.