House sale due to divorce, how to invest?

allfreys

Wow, thanks so much for all the information!

I will go and look up some of these savings accounts. I suppose I could use my nationwide e savings account temporarily as this gives a fairly good rate i think.

In an ideal world I would get another mortgage and use the money as a deposit but I only earn 11.5k pa and house prices where I live average £275k for a small 3 bed. I would not get a mortgage to cover this amount despite the fact that I have regular maintenance for the children, the lenders do not include this as income

gwapenut

allfreys wrote: »

Wow, thanks so much for all the information!

I will go and look up some of these savings accounts. I suppose I could use my nationwide e savings account temporarily as this gives a fairly good rate i think.

In an ideal world I would get another mortgage and use the money as a deposit but I only earn 11.5k pa and house prices where I live average £275k for a small 3 bed. I would not get a mortgage to cover this amount despite the fact that I have regular maintenance for the children, the lenders do not include this as income

Your esavings account is now SHOCKING! As are most of Nationwide's offerings these days. May as well open an egg account for the time being, they're quick and easy to deal with.

bryanb

allfreys wrote: »

Hi, please could someone point me in the right direction?

I have to sell my home due to a divorce and will have a lump sum of approx £50k. i want to invest a large portion of this for my childrens future, I am a single parent to three young kids.

I work part time and the chances of me getting another mortgage are minimal due to limited earnings. I also claim tax credits.

I don't really understand investments etc and short of putting the cash under my floorboards I am lost!

Should i speak to an IFA as I am also clueless when it comes to tax etc on savings.

Any advice would be gratefully received.

If the money is invested in your name it will be counted in any possible future claim for means tested benefits.

allfreys

Oh! Was not aware of that. Can it be put in the childrens name then?

Voyager2002

allfreys wrote: »

Wow, thanks so much for all the information!

I will go and look up some of these savings accounts. I suppose I could use my nationwide e savings account temporarily as this gives a fairly good rate i think.

In an ideal world I would get another mortgage and use the money as a deposit but I only earn 11.5k pa and house prices where I live average £275k for a small 3 bed. I would not get a mortgage to cover this amount despite the fact that I have regular maintenance for the children, the lenders do not include this as income

Talk to a mortgage adviser: in the past there were certainly lenders who considered maintenance as part of your income. They may well still exist: just a question of finding one.

Primrose

Be aware that in most cases, unless it is a trust fund, any money invested in your childrens' names will become available to them at age 18 and this may not be what you want. Many 18 year olds have a very irresponsible attitude towards money and Age 21 might be a suitable cut-off point.
If you're paying tax on your part-time earnings, using your annual Cash ISA Allowance might be a sensible option but check first whether tax free savings are taken into account when receiving any benefits.
Also bear in mind that although you want to look after your childrens' long term futures, putting money in their name will give them a legal right to it eventually, and you do not know what your own long term future holds, i.e. loss of job through ill health or redundancy when you are older, or inadequate pension provision for your old age, so think very carefully about losing control of this lump sum. Far better perhaps for you to have control of it and let your children have some if and when they need it, rather than letting them spend it on holidays abroad or cars the minute they hit 18, and then you have an impoverished retirement.

Voyager2002

Yes: tax-free savings are taken into account when determining eligibility for means-tested benefits. However the OP is unlikely to be claiming such benefits anyway.

And I repeat: the money will be of greatest help to your children if it is spent over the next ten years, to enable them to get the best possible education.

allfreys

I only intend to claim tax credits as I currently do. Other benefits are not really applicable unless I lose my job or become to ill to work.

I will speak to a mortgage advisor to check my options

Looks like it will have to be split over long and short term savings accounts!

Thank you all so much for your advice!

Jewel_2

I am absolutely sure you have looked into this, but can't you stay in the house with your ex paying towards the mortgage, as part of the maintenance arrangements? Have you asked a solicitor, because I know when I got divorced and was in a similar situation to you (low income) the kids were entitled to a roof over their heads?