inheritance

[WhyMeWhyNot]

What would you do? I am soon to receive an inheritance, around £90,000. Have never owned a property and rent privately. My student daughter lives with me. I love the area I'm in but cheapest sort of 2 bedroom property is about 200,000.
I'm 55 and to be honest am scared of owning a property, that's if I am eligible for a mortgage considering my age.
I'm also worried the only place I could afford to buy would not be near this area making it difficult with work/uni etc.
My daughter has another year at uni then will probably move on.
There is also a great responsibility to not waste this money I must do my absolute best with it. My lease here is up for renewal in July so the pressure is on and I can feel my stress levels rising when really the thought of money coming should have me jumping for joy.
I am plodding along at the moment working hard, my wage just scrapes me through each month by the skin of my teeth. No holidays or new clothes or going out.
I'm dreading the change being forced on me, and know I should be welcoming the future not dreading it.
Anyone got any positive thoughts please...... or a kick up the bum I need..

I would have thought your age would make a difference to mortgagability. If your wage is only just enough, you wouldn't want to be paying more than that. Your daughter presumably contributes to rent but will not be a student for long. You might move to a "rent a room" or "doctor in the house" sort of scheme when she moves on, if you felt like it.

How secure is your job and does it have much of a pension?

p.s. alternatively, have a look at the options, but if you are confident you will be able to carry on renting indefinitely, you could slowly eat into the money to improve your life and make it last quite a while.

Low interest rates and inflation will eat into it as well.

If you are eligible for pension credit or the equivalent, then savings will reduce or remove your eligibility. I think though at your age you will be getting the proposed higher flat rate and not pension credits (off topic a bit, get an up-to-date pension forecast of you haven't already got one. I believe you currently need 30 years of NI contributions or credits for the full state pension, but can buy extra years if you have gaps).

I think first of all your tied to the idea of using the money to buy property when you don't have to. It's your money and if you want to spend it on a trip round the world or lottery tickets then it's entirely up to you. You could invest it or buy a buy to let property and become a landlord yourself and supplement your current income. You could go back to uni yourself and re-train if you fancied it, try and see this as a massive blessing and a huge chance to to what you want to improve your life.

If it's all seeming really awful at the moment have you considered banking the money and making a decision later on when the time feels right? You could take on another 6 months at your current property and see how you feel then, there's no reason to buy somewhere right now is there? Maybe when you've had a bit of time and space and you don't feel a huge decision is being forced on you it'll be easier.

Best of luck.

The 'rent a room' wasn't something I'd thought of and will be worth bearing in mind. Job secure enough I have signed up to stay working and contributing to pension, and not take early retirement, until at least age 65, pension probably won't be enough after lump sum to not do something to top it up.

Thanks jemima I do feel such pressure to do right that I'm scared of doing anything in case its wrong!
The 'wait 6 months' seems really good idea but knowing me I'll just plod along and then have this same conversation next January.

example small holiday home, with some left over as savings for dd wedding or deposit for her first home that wont put you over for pension?

I think Miss Marples has had a good idea (though the link doesn't work). Buy a small place somewhere you would like to go on holiday yourself.

Something like this:
www.justlodges.com/holiday-lodge-and-log-cabin-parks/sale_view/20704-ocean-cove-holiday-park/lodging_id/36339

Which is £65k. Spend a little bit on furniture then run it as a holiday rental to get you a little bit of income. Make sure whereever you choose isn't too far from home so you can go for a weekend. You daughter will be able to use it too.

Another good idea, its all seeming a bit less scary.... thank-you both

I think you should see an independent mortgage adviser and find out what sort of mortgage you could get, when you bring 90k to the table as deposit.

You could think long term.

Put the money in a savings account, not touch it, and buy a one bed flat when your daughter move out.
Presumably she will look for work after uni, and move on.

The investment in a one bed flat for you, which is cheaper than a two bed, means that you have a home for yourself throughout retirement, and still something to leave behind for her. Your dd is an adult, and should be encouraged to build her own life and fortunes. Ensure that you are ok for now.

Paying a small mortgage is better than paying rent, especially if the mortgage payments are less than your current rent.

There is a mortgage calculator www.bbc.co.uk/homes/property/mortgagecalculator.shtml which you could use to play around with the figures and get some idea of how much it would cost you. It might make you feel more confident before seeing a mortgage advisor?