Investment help pretty please

[JessicaRabbit23]

Hello guys. You have always been so helpful.

I have an inheritance due.
425k from the house sale and around 40k bank.

i already own my house with £220k left to pay on it. House value £375-£400k. Ex council but it’s been renovated! love my house love the area have lots of friends. School could be better but it is what it is. The kids have a good balanced life school/friends.

in all honesty I have no idea what to do with this money. I keep looking online but I find myself looking like the picture I’m going to attach. It’s mind boggling. Everything I read nothing is clear. I don’t know if I can just keep 400k in the bank account and carry on as normal. Will the tax man come after me?

what would you do?
it’s a brilliant sum of money but in reality if I was to buy a house outright it’s still not my dream home so what’s the point? Doubt I would get approved a bigger mortgage my credit is not the best.

im aware there are bigger issues in the world I just need some guidance because I have no clue what’s for the best.

xtiax

Can you tell us-

• what rate you are paying on your mortgage
• what savings you have currently
• any investments? How much is in your pension?
• How old are you?
• Donyou want to retire early?
• Any other life plans or events that might be relevant?

Hey,

Im 33 3 children under the age of 9.
No savings.
10k debt
about 9000 in a pension from when I had a corporate job pre kids.
I would love to have my own business but I really doubt with how young my children are (they all have high needs too) I would be able to have a successful one or even give it the love and time it needs.

haven’t even thought about retiring.
I have a part time job at the moment that just works around the children I have thought about getting back into the corporate world but the office politics would stress me out even more now that I have kids.
my current mortgage rate is 3.2% and runs out July 2027

I recently got £100k life insurance payout (cancer but I’m fine now) I had a new bathroom, installed a woodburner and the rest went on my mortgage. Mortgage now is £100k on a £500k house. It’s nice to feel secure incase interest rates go up and it’s still an investment. Personally I’d whack it on the mortgage which gives you extra each month by paying less mortgage

Oh I’m so glad you are ok now.
I do need a new bathroom but I also could be mortgage free on a 600k house if I just moved, all my children would have their own bedroom. But it means no savings ect… log burner sounds lovely 😍

I don’t know if I can just keep 400k in the bank account and carry on as normal. Will the tax man come after me?
If you put £400k in a savings account you would be taxed on the interest that money made.ISAs are a type savings (or investment) account that are tax free. But you can only put £20k a year in them.

My opinion:
1.Pay off debts

2.Open a SIPP and max out your pension for the year.

3.Put 20k in stocks and shares ISA

4.Do you want to save for your kids? You could open a Junior isa for each of them (money is theirs to use as they please at 18 though)

1. Stop gap measure - put the rest in high interest savings accounts (you'll need to split the money into different banks so that you're covered by the financial companion scheme) You'll pay tax on the interest earned. But that's not terrible and it's a potentialy a short term thing

1. Take some time to think. Take professional advice. Improve your financial literacy. Don't do anything fast, your money is safe and earning a bit of interest. Do you want to pay off your mortgage? Or buy a bigger house? Be really careful and really thoughtful about your future. This could be life changing for you and your kids. The danger is that you could buy a yacht, live like a king and go bankrupt in a year. Take your time making decisions.

1. If you're not using a large chunk of it on a house, I personally wouldn't keep the money in cash savings long term. I would invest it and also trickle it over into my SIPP and stocks&shares ISA each year.

First thing would be to take a beat to breathe, you don't have to decide everything in one go.

Start small, pay off your debt and put £20k in an ISA.

If you keep the money in an account there are a few things you need to consider.
A) protecting your money, you are protected up to £120k per banking institution (this is higher for 6 months after coming into money in this type of situation)
B) You pay tax on interest earned over a threshold this depends on your income. For most people it is £1000 in interest that's not taxed but there's also a larger allowance for those on low incomes so this would be something for you to look into.
You currently can put £20k per tax year into ISAs and this money whilst in an ISA will be tax free.
C) depreciation of money. Typically money in savings increases less than inflation.

I would be thinking about two things in your position.

1. looking at what your housing needs will be once in another 5 years when you have 3 teenagers at home. I grew up in a 3 bed semi with 3 kids, with the 3rd room being a 6ftx6ft box. It was fine as young kids but when we were 19, 12, 8 t was cramped and we were on top of each other. Another year later the eldest moved out and it then it was mostly fine again.
2. how can you use the money to give you security and what that might look like. Housing security with a low or no mortgage on a property? Long term income security by investing and putting money into pensions? Short term financial security by giving you the capital to react to things that crop up?

What is the right ratio of these things for you?
It could be a false economy to put all of the money into a bigger house without a mortgage if the increase in bills associated with the larger house leaves you with no more money at the end of the month and you are vulnerable to the unexpected bills.
Putting it all into long term investments for later life and not changing your life in the here and now. You only live once and your kids are only young once.
Putting everything in the here and now but not thinking about the future could scupper you and you find yourself having to downsize to release capital to fund retirement/ life 55+

These are decisions not to be rushed. Investigate was houses are available and what they cost to run, think about what costs you are likely to have over the next 5 years? New car, kitchen, bathroom, holidays? What pension pot would you need to cover essentials if you were to retire before the state pension kicks in? See how far the money would stretch across the different scenarios and what feels like a good balance