Pension or something else?

[ThingsCouldBeEasier]

I'm likely to inherit some money in the near future. If it doesn't get eaten up by funding care, and the house sells for what we expect it to, it's likely to be about half a million pounds.

I'm a full-time carer for disabled teen DC and hence unable to work. I'm married and financially dependent on my DH (I also get carers allowance and the DC get DLA). I have a small pension from previous employment but not a private one of my own. The idea is that DH's good public sector salary will support us both in retirement.

The DC are likely to need ongoing support into adulthood and may never be able to be self-supporting financially. My DH may not agree to any financial support for them after the age of 18.

My family member (and I) want my inheritance to be used for the DC's benefit and for mine.

Should I be investing some of it in a pension for myself, or should I be saving it in some other manner for supporting the DC in the future? Or a bit of both?

As you needs are more complex than most, can I strongly advise you see a financial adviser.
I hope it all works out fir you.

If you’re not working, you can only invest max £2880 each year in a pension. It’s worth doing because the government tops it up to £3600, but it won’t make much of a dent into your inheritance.

That's really useful to know - thanks.

An ISA is likely to be a good pension proxy

My DH may not agree to any financial support for them after the age of 18

He what?

I agree with the comment about a financial advisor as it could be complex. But I’d prioritise your husband not being able to control this money eg some of it in a trust or something, for your DC.

I mean he may not agree to our normal household funds (his salary) being used to support the DC once they're adults. The inheritance would be treated differently so I want to specifically use it for helping the DC into adulthood.

Are the DCs also your husbands?

The fact he wouldn't want to help his kids is pretty bleak.

Just be aware that a lot of private sector/final salary pensions will only pay a ‘survivor’s pension’ to you if your husband dies. This is half to two thirds of the pension usually - depending on what the fine print says. Try and get hold of it! It’s still worth you saving into a pension or at least stashing some money into a stocks and share ISA for you.
Look into setting up a disabled person’s trust for your son.

Do you still have a mortgage? It might be worth paying that off to free up family money coming in. Definitely do the full pension and isa's you can. You can look into whether adding to your husband's pension would be beneficial for you both.

Is there any mileage in using the money for care so that you can go out to work? It would give you a break from caring and allow you to put more in a pension.

If you put money directly in your children's name, it will be taken into account for eligibility to means tested benefits.

I agree. 😔

Thanks for the helpful answers.