Investing Inheritence

Marcus_Walters

My mother recently inherited about 150k when my father died. He had previously delt with all money matters so she is very inexperienced in this area and finds it all very daunting. She wants to invest or save the money in a low risk way and would like to know how best to go about this and what annual level of interest she should expect? She already as about 40k invested in a managed fund and ISAS. We would appreciate any suggestions.

Many thanks

MW

dunstonh

A managed fund is not cautious unless it is catagorised as a cautious managed fund. If it catagorised as a balanced managed (or anything other than cautious managed) then that ought to be reviewed.

Low risk covers many investment areas. Depending on the taxation position of mother and her aims and goals, the "correct" answers will vary.

No doubt someone will suggest a bank account but that may not be the best option for all the money as it could reduce her age allowance. Products exist which do not impact on her age allowance.

What you really want is a bit too specific for a website to answer and it may be sensible to get independent financial advice. Once you have that advice, you can always post here and we can discuss what has been recommended.

Rafter

Marcus,

Presumably the £150k is in addition to the house she is living in, in which case there are also inheritance tax considerations?

If she has a good widows pension to live off she has to ask herself what she needs the money for and whether for inheritance tax purposes she is better of distributing some of it. As long as she lives for another 7 years, the transfer would then be exempt from inheritance tax.

Otherwise there are lots of different options and tax avoiding schemes including stakeholder pensions that she may be able to make use of.

If the money is just to be held on deposit, make sure it is split between a number of providers. The guarantee scheme only covers around £35k with each provider.

Good luck

R.