What would you do for £30k (with a view to turning it into more money!)

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I'm just about to receive £30k and I was going to pay a chunk off the mortgage, but a few people have been telling me to invest it, to turn it into a larger amount.

It's a big decision for me because I don't often get windfalls like this so I don't have much appetite for risk, I really don't want to lose the money. Are there any safe-ish methods to grow my nest-egg?

What would you do?

How lovely ! Anyway no risk but no interest but chance of monthly prizes - Premium Bonds (I win something every month, highest was £375)

The return on premium bonds is ~3.6% so less than inflation - only really attractive once you’re being taxed on savings interest.

OP - what is the objective? To have a cash nest egg? For access when?

What’s your mortgage rate?
what savings and pension do you have?

@MidnightPatrol The big ambition is to be mortgage free at some point in the next five years. I have about £100k left to pay off, so not sure how feasible that is?

I know nothing about investing 😬

There is something called Rebel Finance School you could look at. It's a series of up to two-hour weekly webinars which looks at becoming financially savvy. Maybe for now, lock at least £20k away in an ISA so that will be tax free assuming you haven't yet opened one for current tax year.

I’d put £20k in a S&S ISA and the rest in Premium Bonds.

@MidnightPatrol i don’t really mind, it’s actually better than my other interest rates but I’m not an expert on investments so I just leave it all where it is. I see my interest rates have all,come down by .25% as well. 😢

What’s your mortgage rate at the moment?

What’s your pension like?

If you don't have an ISA already, I'd recommend investing at least some of it via your ISA. When I was starting to figure out what I wanted to do, I read a book called "the simple path to wealth" (some chapters are just US based, but a lot of it is applicable in the UK too), and I recommend it to all my friends now.

If your objective is to pay off your mortgage, you know little about investing and you have low appetite for risk, the correct course of action is probably to pay off your mortgage.

The exceptions to this would be if you have some king of super low mortgage rate for the next few years, or if you have a really low pension and urgently need to boost that.

@MidnightPatrol cant edit post now. I make that about 3% ?

Before making a decision check how much you can pay off each year on your mortgage - you may have a maximum amount - I think ours was £10k

It depends on lots of factors
Eg.
Your mortgage rate and amount owed
Whether you need cash now or can keep it at least 5yrs without touching.
Attitude to risk etc

Eg. If my mortgage interest rate was low and I didn’t need cash now, and I was risk averse, I’d put 20k into a medium risk s&s ISA. Tax free.

I’d put the remaining 10k into a medium risk General Investment Account (GIA).

Then I’d watch my money grow (obv it can go up or down, but over 5years+ it should be ok. *I wouldn’t invest if I needed the cash anytime soon).

As someone mentioned look at Rebel Finance. Free course online.
Really comprehensive. Educated yourself first then decide what to do

What is your mortgage interest rate? It is unlikely that a cash isa will outperform it, so that is unlikely to be a good idea.

To get potentially bigger returns you need to take some risk. A stocks and shares isa can have £20k added now and the rest on 6th April. Or hedge and put the 10 on the mortgage. You can lose money too, but it's lower risk than investing directly into individual shares.

Premium bonds. 100%

Another vote for Rebel Finance School!

Put £20k into an easy access ISA for now (so you can get at it if you want to move it elsewhere) so that you minimise your tax burden and the other £10k in an easy access savings account with the best interest rate you can find.

You then need to ask yourself how long are you prepared to lock the money away for, before you need it? Investing the money into something like a Global Index Tracker will give you the best return over the longer term, but by that I mean a bare minimum of 5 years. Any less and you are subject to market volatility.

You can overpay your monthly mortgage payments whilst leaving the rest in a high interest savings account. This will bring your borrowing down which will have a knock on effect on how much you pay in interest. I'd probably do that. But it really depends on the interest rate on your mortgage.

Can you describe why you think premium bonds is the best option, given their return vs even a savings account?

If your main financial goal is to pay off the mortgage, and you by your own admission "know nothing about investing" then just pay it into the mortgage (assuming your mortgage allows that with no penalties etc).

Maybe keep a little bit back for a rainy day.

But fundamentally there is (kind of obviously) no way to invest to make loads of money with little risk. I notice some people suggesting Premium Bonds ... whilst in theory you could win £1 million in practice you're far more likely to win less than you'd pay in extra mortgage interest over the same period. Just pay off the mortgage.

The problem with this is that high interest savings accounts no longer exist.

Much as I love PB's, I would never recommend them as an investment or a way to grow your money but instead as somewhere safe with easy access and the potential (though not guaranteed) to receive some growth.

A few years ago we were winning some nice sums each month on our PB's (both have FH) but in recent years this has been dwindling and now we consider ourselves lucky to win £200-300/M.
Of course there is the chance to win a larger amount (a family member won £10k this month) but don't bank on it.

We stay in PB's as we have plenty tucked away in ISA's etc but as your only savings/investment, they are (unfortunately) a no from me.

Pay off mortgage.

What’s your mortgage rate?
What early repayment penalty does it have and how much can you pay without penalty?
Do you have any other savings or investments?
How old are you?

Depending on the answers to these, pp above has a point- if your aim is to pay off the mortgage within 5 years and you don’t like risk, then doing that sounds like a good idea- the only question is timing and where to put the money meanwhile. With a time horizon under 5y the standard advice would be not to invest in shares- these are better for longer term investments.