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?

Don't buy stocks and shares if you don't want to risk it. The markets can go down as well as up. You can get about 3-4% on a savings account at the moment or just pay it off the mortgage and enjoy having a bit more income or being mortgage free sooner.

I'd be tempted to pay off mortgage too, but my husband is currently investing in gold and so would explore that.

Rebel Finance School is brilliant, I'm doing the course at the moment, learning so much about money and how to grow it - all free info, lovely people.

You have to be careful not to confuse risk with volatility though.

To borrow an analogy from Rebel Finance School, think of investing in the stock market as akin to taking a flight - the chances of the plane crashing (the risk) are very small but you may hit turbulence (the volatility) along the way.

If you invest all your money in just one or two companies then that is speculation and much higher risk. If you invest in a Global Index Tracker then that risk is spread across hundreds of companies and the likelihood of all of them crashing is very very small. In fact when one goes down, another will go up and they balance each other out.

Stocks and Shares will always outperform a cash savings account over time but you have to be prepared to play the long game.

This is all really interesting, and useful - thanks everybody.

My mortgage interest rate is 4.20 percent (for those who are asking) and according to my mortgage advisor, I can overpay '20 percent of the debt, per annum with no penalties or charges.' I'm in my late 30s.

Loads of good suggestions in here, I'm going to look into all of them.

Rebel Finance School. Join their FB page and do the course. It may have been mentioned already but I’ve not RTFT.

Lucky you, in ten years I have won £25 once.

@CalzoneOnLegs do you mind me asking how much you have invested in PB?

And on average, how much do you win a month do you think?

With that mortgage rate and your risk appetite pay down your mortgage.

What I would do is invest in a S&S ISA in an index tracker. But I have a completely different risk appetite to you and my mortgage rate is less than 2%.

if you want to keep some money back for emergencies then you could put into savings but your rate probably won’t beat your mortgage interest savings. Premium bonds are another option but no guarantee to grow your money and you’d need to win 4% per month (above average) to beat mortgage interest saving from paying off early.

We put £10k from an insurance payout into premium bonds and have won the huge sum of £50 in 5 years

I’d split it with some in an ISA, some bonds and pay off some of your mortgage. Property is a good investment! Premium Bonds are easy access and you won’t lose money(except via inflation) at least—my stock investments have had some bad years and at the moment unless you’re happy to let that money sit for a good long time you’re unlikely to see quick profits without high risk.

@PassportPhotosAreHorrific i, going to PM you with the information

We had £100k in Premium Bonds after an inheritance (£50k each for me and DH) we held them for about 2 years (just cashed them in to pay off our own mortgage which has just come to the end of a low rate) and won about £7,000 between us over that time.

15k off mortgage.
15k into gold and silver.

@BashfulClam it was actually £625 one month I looked on my app after posting, I’d forgotten that. I think it was March. I was delighted, I have a relative that won £5k ! It’s why I like PB’s as there’s always a chance.

I remember someone on this website saying that unless you have the full holding of £50k, having Premium Bonds is a bit pointless. From my own experience I’m winning much more often now I have the maximum. Most of the people on the high value prize list of £1K and more wins that’s published every month have the maximum. But even having a lower amount of bonds means the small chance of a big win, so as part of a diversified portfolio they can have their place, at least for a trial period. It’s also nice not having to fill in a tax return every year.

Pay it off the mortgage! I’ve just used the Nationwide lump sum payoff calculator and you would save £12.5k of interest and cut almost 3.5 years off the term of your mortgage. If you then recycled the saved interest into monthly overpayments (ie keep the payments the same after the lump sum as before) you would pay it off even faster.

with a 5 year time horizon there is nothing low risk you could do with the money that would get you such a high return.

PBs are great but I’d follow the Martin Lewis advice - only to be used if you are a higher rate taxpayer, have no debt or mortgage, have maxed out ISA and pension contributions and have emergency savings in hand - then they can be part of an investment strategy that makes sense tax and risk wise - but only then unless you have a bit of money and want to have fun with it (I think there is a poster on the Premium Bonds who self insures their pets but puts the equivalent amount that pet insurance would cost into PBs each month, winnings top up the pot in case of big bills)

@paranoidnamechanger a few months back the million prize winner had £100 investment, must have been a birthday present or new born gift, but imagine how they felt, I’d have been convinced it was a scam probably.

@Defiantlynot41 thank you so much for taking the time to look into that for me ❤️

That's definitely compelling!!

PB are not good if you want to grow your money. Your return is likely to be around 3%, could be more, could be less.
Your mortgage rate is reasonably high so I would pay some of that off (possibly over 2/3 years), with the balance in a S&S ISA for the longer term.

In your shoes OP I would put £20K in a stocks and shares ISA with a low risk profile. Then if you have any allowance, the remaining £10K into your pension for an instant 20% gain, more if you are a higher rate tax payer. The pension is the simplest way to grow your money but of course locks it away. The ISA can be cashed in at a later date and used to pay down your mortgage if wanted. You are only in your 30s and have plenty of time both to pay off the mortgage and to grow your investments.

Isn’t the problem with S&S ISAs all the fees that you have to pay to the financial firms for running it? It’s a shame you can’t just DIY.

You can DIY. You just need to do some research and pick a sensible fund. Moneysavingexpert has decent advice on this.

Currently my savings are paying more than my mortgage rate so I have money fitted in high rate savings, plus premium bonds, I think I’ve won about £1100 this year (but I do have the max amount in there).

If your mortgage is only £100k, I’d probably pay off £20k of that, although check what % you’re allowed to overpay as mine has always been capped at 10% a year.

Stick £10k in a savings account.

Seeing as you're unlikely to get more than a 4.2% return on any safe investment, wouldn't it make sense to pay an extra 20K off your mortgage this year?