What have you done / would you do with a £windfall?

[WindfallWonderings]

In about a month, I’m going to be hearing about an offer of compensation from a bank, and although I don’t know yet how much it will be, I am finding it difficult to think about much else.

I do know it will be a minimum of £200,000 - could be substantially more.

I’m mid-forties, never had financial security, and am starting to feel anxious about what will be the best way to protect my future with this money.

I’m married with one DC. DH is not expecting or keen for me to pay off the mortgage as then it would feel like my house rather than our house. I’m completely burnt out at work but I don’t actually want to quit - not just for financial reasons, I’ve been in the same organisation for 20 years and there’s genuinely nothing else I’d rather do.

This feels like my one and only chance to have some financial security (which I know is one more chance than a lot of people get) - there’s no inheritance coming my way and little prospect of substantial income uplift from my job.

if you’ve had a windfall, or you’ve dreamed of having one (haven’t we all, I suppose…) - how did you/would you get the balance right between enjoying it and improving your quality of life, and making sensible choices to protect your future?

This. Massive red flag. Paying off the mortgage is the obvious go to in this situation. To not do it because DH feels emasculated by the situation is frankly ridiculous and very worrying.

This.

You have no hurry so go the Rebel Finance course in YouTube. It’s free and excellent and even if you don’t follow its principles you will be able to articulate the merits of their/your approach. Their course is all about setting v yourself up long term. Generally a financial advisor is not only not needed but can be the very reason why your growth isn’t great. Taking control of this could be life changing especially when considered in the context of a full understanding of pensions, retirement needs and budgeting.

I thought premium bonds didn’t pay any interest? When I’ve looked into it it’s just a safe tax free place to keep money with a chance to win a prize.

I'd top up my pension so I could retire at 55.

To be honest, i see it the other way round. Paying off the mortgage means all of the compensation goes into a shared payment. If they split up, 50% goes to the husband.
i assume the OP gets compensated for something, so its only fair that only she benefits from at least some of the payments - by going part time, topping up pensions, whatever
The husband is acting in the OPs benefit- the opposite of a red flag.

That’s right @MinnieGirl this poster hasn’t mentioned interest. It’s just a guide based on typical returns (in prizes) for that invested amount.

@Youabsoluteblinder@goldenautumnleaves25 That’s a good idea re reducing hours - rather than giving up work alrigetger. Definitely couldn’t do this for at least 6 months (from a work responsibilities perspective) but could plan towards it / lay the groundwork for it with work. And thinking of max mortgage overpayments each year until end of fixed term, then maybe a bigger chunk off at that point… all great food for thought, thank you!

Yes I see it this way too - there’s a complicated and fairly traumatic family history ‘story’ behind the wills and ultimately this compensation, and DH is keen to make sure I prioritise some peace and comfort for myself first - although of course the idea of lower or even no mortgage payments would make us both very happy! He’s being very sensible and pointing out we don’t know the amount yet, I’m trying and failing to keep my head out of the clouds!

Ah I’m with you! Thanks.

It depends on the mortgage rate. I’m investing instead of overpaying the mortgage, have been for 2 years and so far would’ve been better of overpaying the mortgage by a reasonable margin.

If you work, you can pay, I believe up to 100% of your wages into your work pension.
However, the earliest that you will be able to access the pension money would be 55 or 57 depending on your age. You may wish to just increase the % of what you pay in 25%, 50% ?

Each adult can put up to a maximum of 20k per year into an ISA & all interest will be tax free.
You could put 10k into an easy access cash ISA & 10k into a stocks & shares ISA.
Your husband could do the same.
Or all 20k into cash ISA, look at Trade212
Some cash ISAs are easy access
Stock & shares ISA are not easy access

Put remaining cash into high interest account

Pay some of the mortgage off

Look at Money Saving Expert website

Save some, spend some

Spend some eg holiday or something that you want