six figure sum

ecw2002

Hi, in next few months I will be getting somewhere around £150,000 to £200,000 from compensation case.

What would be best to do with it.

We have £36000 unsecured debt
£98000 mortgage
No savings.


We will obviously pay £36k off but question is what to do with rest in terms of savings accounts. Once debt paid off we will have ample to live off without delving into compensation money

We will be taking advice from IFA when amount confirmed, but I was looking for ideas...

Also would you open a new account or could you pay that amount of money into a current account:eek:

Annisele

How long is a piece of string...

You could pay that amount into a current account, but I wouldn't! Even if it wasn't going to sit there for very long, I'd be nervous about putting more than £85k with a single institution (see the FSCS limits).

Some of things you might want to think about:

Attitude to investment risk - would you be prepared to put your money somewhere where it could lose value? And if you're not, are you prepared to accept inflation risk (i.e. if you just leave it in cash, over time its purchasing power will diminish).

Are you going to need access to the money? Is it to pay for future care needs or some such thing? Do you anticipate you'll want some in X years to pay for a child's university education?

You say you have ample to live off without using the compensation money - are you in a situation where that's true forever, or is it dependent on income from a job? Do you need to plan for your retirement, or are you already 96?

What's your mortgage rate, and would you be better off using the money to repay part or all of your mortgage? (And if it's £150k, paying off £134k of debt will use up most of it).

Mojisola

Look at whether it would be worth upgrading anything - car, electrical goods, house repair, etc - while you have some ready capital. Other than that, I would pay off as much as you can from the mortgage, just keeping a rainy day fund back.

If you then put the amount you've been paying on the mortgage into a savings account, you wouldn't miss the money and would soon build up more savings.

property.advert

Your main need is to address how you got into debt of £36,000 and sort out your income so that you don't blow all this and end up back there again in 12 months time. If you don't, then you will, whether you pay down current debt or not.

malik999

If it was me - Pay off the mortage and loan and put the remaining amount into savings and shares.

Jonbvn

Depends on the interest rate for your mortgage. If it is higher than savings rates than pay it off.

uk1

I think that for any advice to be viable it needs to be based on your situation and what you want the cash for. A few answers to some basic questions would help provide pointers.

1. How old are you?

2. What would you like to save the money for eg retirement, short-term, etc? It could provide the basis of an improved retirement for example if drip fed into a pesnion plan.

3. How much risk are you happy to take?