Im 20 and dno what to do with my inheritance, please help!!!!

Masomnia

If you're planning on keeping the money long term, I think I'd see an Independeent Financial Adviser, given the timescale and the sum of money.

Making a decision that costs you as little as 1% now will seriously add up over the years on £40k.

For now, just find the best interest paying savings account.

opinions4u

goodgirl80 wrote: »

Why are you 20 year old with 40k in the bank as well ?:D

I can give you double on one of those !!

calypso_rhapsody

So if i read this right, you want to put the money away for 2 years and then be able use it or decide what to do with it on a longer term basis at that time? Assume you are not a tax payer as you are at uni?

Someone has already suggested paying off debts and certainly if you have expensive credit card or bank debt that would be sensible - but probably not your student loans (admit i don't know much about those but i doubt that they are costing you much at present ... and then only in accruing interest not cash flow?)

If i were you i would probably see some advantage in putting it somewhere where i could not access it for the two years, to avoid the temptation - so a two year fixed term savings account would seem to be the answer. If you are a tax payer, then the NS&I product may be worth looking at for £15k - you can access but at a high cost for hte first year. And of course ISA accounts - though again only if you are a taxpayer.

Two years is not really long enough for an equity play but, depending on what your thinking is about what you will do when you graduate, you could put a bit of the £40k into an equity portfolio and learn about investing in stocks and shares (if you're studying business i guess that could be of interest not only as an investment idea)

Good luck whatever you do!

donkingkong

£37600 into Santander First Home Saver and then remainder in highest paying current account you can get. £100 per month from current acc. into SFHS for next 2 years. At 5% interest (assuming you can register for gross interest) over the next 2 years interest payments should be somewhere in the region of £3500.

Marcus84_2

I agree with some of the other posters - put the money into high interest saving accounts. It is very easy to spend on luxuries but it will make a huge difference to your future if you don't waste it!

Do you currently have a student loan?

bigfreddiel

ChopperST wrote: »

Lloyds Vantage allows you 3 a accounts with £5k in each.

Why bother with the above when you can do the next line below???

Various other instant access savings at around 3% AER for the rest.

There's also the NS&I 5 year saving bond which does allow withdrawals at the end of year 1 with no penalties and will track inflation. (Maximum deposit is £15k I think)

You forgot to mention +.5% for the above

see my comments in red above

krisknox1

thanks to all for your ideas, basically yer im studying business for another two years. i didnt want to spend my inheritance on my fees, hence why i took a student loan. I really want the best for the money, as im sure my father would have been disappointed to see my waist it.
there are so many different roads i could go down. just have to research abit more and make a decision ......

grumpycrab

The Santander Home Saver thing sounds interesting but a bit complicated and looks like you have to pay £100 in per month (see 4 posts up). More info here -> http://forums.moneysavingexpert.com/showpost.php?p=44467918&postcount=166

Just to expand on it a little. (Srry if this is already understood). You are allowed a yearly income (this includes interest from savings) of £7450 without paying tax. By default savings accounts will pay you interest NET of 20% tax (e.g. in 1 year, with £100 at 5% GROSS, the interest is £5; but 20% of that is taxed - £1 - and £4 goes to you as NET interest).

While your earnings are less than £7450 you can claim this tax back in 1 of 2 ways. You either 1. register as a non-tax payer OR 2. claim the tax back at theend of each tax year.
1. when you apply for a savings account you should get the option to save as a non-tax payer (if not you will need to get and fill in form R85) OR
2. claim tax back (form R40)
Full details here -> http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/IncomeTax/Taxrefundsreclaimingtax/DG_078335

I guess that you're hoping to work in 2 years time so if you go for option 1. then when you start to earn you will have to tell everybody that you are now a tax payer. Which is why I think option 2. may be easier. (There are minor complications here; e.g. if your savings account compounds interest yearly then you'll want option 1. but as a business student I'm sure you'll know that).

dtsazza

I'd second the suggestions for the NS&I certificates (for £15k of the money, at least). They're a good way to preserve the capital of the money with a small real return on top - which for putting money in a "holding pattern" until a fuller decision is made later, is ideal. (I reckon it'll give a larger nominal return than all instant-access savings accounts too, but of course that's not guaranteed). And they can be liquidated at any point, with very light penalties (just a small amount of the bonus interest lost) assuming they've been held at least a year.

Using this year's ISA allowance (and next year's, after April) would also be a very prudent idea - it's not such a big issue now, but if you become a higher-rate taxpayer a few years after university, you'll be very glad that you have £20-30k already protected from the taxman. (This is still true at basic rate tax, to a lesser extent of course). It's not an absolute priority in terms of returns, as you'll probably not be paying any tax this year, but do make sure you get it in before the end of the tax year so as to use this year's allowance.

Putting the rest into the Santander FHS at 5% would be a good place for the other half of the money, as that's a very good return (especially net of tax). You could also consider the First Direct 8% Regular Saver for £300/month, but that would require opening their current account and either shifting some money about once a month, or opening yet another savings account with them and putting £1 in there. Whether it's worth the hassle for an extra £57 a year interest is a personal call - if you're particularly busy with university then increasing your overall yield by one-sixth of a percent (£57/£40,000) might not be considered worthwhile. But then, twenty pints a year is still twenty pints a year...

scott_lithgows

Spend 5k on a round the world trip.
Spend 30k deposit on a modern 2 bedroom flat.
Spend 5k on things for the flat,large tv etc,

Have no money left to waste.