20 years old, accident payout money. How should I save?

synapse321

My understanding is that you can claim benefits if the money is held in trust: one of the questions for jsa/IS are: Have you had any lump sum payments for a personal injury in the last 12 months, we do not need details about lump payments held in trust.

But be warned, my friend had a compensation payment over £200 000 which his solicitor (famous perosnal injury solicitors based in Birmingham - unable to name though for legal reasons) ended up being the POA after the Court of Protection intervened and they are robbing him left/right and centre.

PosterBoy77

foreign_correspondent wrote: »

Personally, I would buy a house - you have to live somewhere - why be paying a landlord rent when you could buy outright? Prices are relatively low at the moment compared to what they were a couple of years ago, and they will start to rise at some point!

The OP seems to suggest that he is living with his girlfriend at university, so I guess he may not be sure where either of them will want to live long term. I would guess he is sensibly planning to buy once both he and is girlfriend are more settled somewhere in jobs or whatever.

PosterBoy77

dbtor wrote: »

Sounds very interesting, I have some time to read up about all the possibilities before I get the money and this one seems very good but I won't have £30k to save until mid April I'd rather save and possibly earn no interest ("Because inflation fluctuates, you won’t know exactly how much you are going to receive until your Certificates mature" - http://www.nsandi.com/products/ilsc) than put into shares and risk losing money that will eventually be for something important like a house.

It is a pity for you that you will not have the cash until mid April. However, you can put extra into a fixed rate bond for 12 months or so, and then add more cash into an ISA and probably buy new issues of the NS&I certificates (there are normally at least 1 set of new issues per year) With regard to the Index Linked certificates, you will receive at least 1%, even if there were was no inflation at all. However, inflation at the moment looks like it will remain relatively high for a while, so you return would be likely to be at least as good as other savings accounts.

metalgal

dbtor wrote: »

I was receiving income support for a while but I decided it was pointless as I would have to pay it back anyway
.

I don't know where youre from and it might be different, but in NI in PI claims, there is the compensation recovery unit, which recovers benefit payments that a person has claimed as a result of their injuries eg ESA incapcaity etc. Normally if awarded compensation and there are benefits to be repaid the compensation awarded would be damages + CRU, so the money isn't really coming out of your pocket. Sometimes it can be £x to include CRU but then the total of damages awarded is adjusted to allow for it.

with regards as to what you shoukd do with money i personally would buy a house. the market is terrible and some people are dying to sell their houses and will take any offer so there may be a bargain to be had.

synapse321

My final advice would be words of caution at 20 years of age its a bit like winning
Lottery every tom !!!!!! and harry will want a piece of it when they get wind of it just
Life I am afraid!

greenface

That brings me to another point
Dont let everyone know your business seriously between you /girlfriend and poss parents i would keep it there .
you are 20 and could be comfortable at 40 or struggling at 26 but a decent holiday for you and your loved ones would feel good. Best wishes

dbtor

The cheque has cleared, I can finally put the whole incident behind me and get on with my life. Now I have to decide what I am going to do with the money (I have decided to save £100-£120k)

I have been advised by a family friend (who is an accountant) to spread it around a bit e.g. put some in savings, put some in premium bonds, some into ns&i certificates. I am not sure which bank to go with for the 12 month fixed rate savings, according to http://moneyfacts.co.uk/compare/savings/fixed-rate/short-term-bonds/ "United National Bank" are currently paying the best rate for 12 months but i'm reluctant to hand over my money to a bank i've never heard of =(I know premium bonds are not the best return for your money if you don't win, but what if I do win? :P I guess the gambling aspect of it appeals to me and I may invest a few thousand.

As for the ns&i certificates they are for 3/5 years but I would most likely want to get my money back in ~18 months, would I still get inflation +1% even after 18 months or a much smaller amount?

Hopefully some wise money saving experts can help me

greenface

£50 k max in each unrelated bank for protection first.
I would pay for advice first so your accountant friend stays your friend. Be careful 100/120k can be spread around or placed in trust for you . Check your benifits still see if you are DLA IB or tax credits of any type . Maybe Carers Allowance for parent/girlfriend