Investing after berievement

thick_mike

I need some advice on savings...

My wife died recently and with all of the insurance money I will have around 300k to invest. I have two teenage boys and I want to do the best job of looking after the money for them so that they can at least be financially secure in the future. As well as coping with the grief, i am finding planning for the future quite stressful.

I am a complete novice when it comes to savings. You may need to type s.l.o.w.l.y in CAPS!

And I've just noticed I've misspelled bereavement in the title.

talexuser

Sorry for your loss. You have to ask yourself some questions first maybe? Any debts or mortgages that can be minimised for their future security? Will they want to go to university? Are they responsible enough now to have money in their own name eg Junior ISA (tax free savings account), or register them for tax free in a normal savings account if they have no income?

Savings accounts can get you 3% or more gross at the moment but several could be used to safeguard the £85000 guaranteed for each savings institution (see the savings tab above for details). However with inflation relatively high cash, although safe, might not be the best for the long term in keeping the value of the money. You could consider a larger proportion of the money in stock market funds if your timescale is well over 5 years, since in the short term the market can and will go down.

CLAPTON

one would need to know of your financial circumstances

-house owner
-mortgage
-employed
-do you need extra income now
-how old the children

Linton

With that amount of money and your admitted inexperience I believe you should get advice from an IFA. Just putting money in savings accounts is unlikely to provide the best return for the long term although it makes sense whilst you are sorting things out.

The IFA should be able understand your circumstances, needs and wishes and put together a mixture of shares and less volatile investments that should provide a better return whilst paying less tax.

thick_mike

CLAPTON wrote: »

one would need to know of your financial circumstances

-house owner
-mortgage
-employed
-do you need extra income now
-how old the children

Mortgage has been paid off by insurance.
Have a full time job, but as a single parent family, may need to drop hours down for a while.
Finances aren't a problem and I really can't imagine having to cope with the loss of my wife if I was struggling for money at the moment.
Children are 10 and 14

thick_mike

talexuser wrote: »

Sorry for your loss. You have to ask yourself some questions first maybe? Any debts or mortgages that can be minimised for their future security? Will they want to go to university? Are they responsible enough now to have money in their own name eg Junior ISA (tax free savings account), or register them for tax free in a normal savings account if they have no income?

Savings accounts can get you 3% or more gross at the moment but several could be used to safeguard the £85000 guaranteed for each savings institution (see the savings tab above for details). However with inflation relatively high cash, although safe, might not be the best for the long term in keeping the value of the money. You could consider a larger proportion of the money in stock market funds if your timescale is well over 5 years, since in the short term the market can and will go down.

I hope the boys will go to university.

I had a friend that had an inheritance held in trust for him which he gained access to when he was 21. He wasted his education away because he was going to be "rich". He ended up losing the lot in a bad investment. I really don't want to put the boys in that position.

I'd be really wary of putting the money into stocks and shares due to the chance of losing it.

thick_mike

Linton wrote: »

With that amount of money and your admitted inexperience I believe you should get advice from an IFA. Just putting money in savings accounts is unlikely to provide the best return for the long term although it makes sense whilst you are sorting things out.

The IFA should be able understand your circumstances, needs and wishes and put together a mixture of shares and less volatile investments that should provide a better return whilst paying less tax.

I know this is good advice, but I am naturally wary of paying someone to do something I could sort out my self (this probably explains the state of the plumbing in my house!).

McKneff

Property with a rental income perhaps?

But like another poster says, with that amount of money you really need professional advice.

Sorry you have lost your wife and hope your boys will be okay

Regards
Annie

Newbie2saving

I am so sorry for your loss.

I lost my husband a couple of years ago, and I know how daunting this whole process can be. I was only in my early 30's and a total novice to savings and investments.

Firstly, ensure your money is in a high interest account with easy access. That way if you do want to make an investment / purchase you can do so, but it will be earning a reasonable rate (I was in shock for the first few months and didn't do this, also risked losing it if the bank went under). Secondly ensure you split your money to be covered by the FSCS protection, that is £85,000 per bank (remember some banks are under the same institution such as lloyds and Halifax). There is more info on all this here http://www.moneysavingexpert.com/savings/savings-accounts-best-interest

I would pop some into an ISA for this year, but that isn't much out of your pot. In the future you need to understand how to fill up your ISAs to avoid tax where possible, but don't worry too much now.

I saw a few IFAs, however don't use your banks, they will be interested in your business now and a lot of their advice really isn't that independant. I decided on one IFA that suited my needs, felt comfortable with etc, I know what you mean about paying for something, but this lump sum is too precious to risk. Think of your worry without it.

I went away from property as I saw it as a hassle and I'm not good at DIY, it also didn't make sense to me personally after tax, landlords insurance etc.

Don't rush into anything. I still haven't made my mind up what to do with everything (but I have it earning interest whilst I decide). I did however do one really important thing (as depressing as this sounds). I made a will. If you haven't done so, you really should. I wanted to ensure my son wouldn't come into a lot of money hitting 18/21 if anything happened to me, so I put my wishes down to pay %'s to him on certain birthdays. I don't think this is truely legal, he could contest, however I hope he would respect my wishes in any tragic circumstances.

Lastly, I know you won't feel like it, but maybe look towards a treat for you all. I certainly didn't feel like it and still don't really, but I love to see my little boy smile and that helps slightly!

Good luck. I hope your boys are coping as well as possible.

thick_mike

McKneff wrote: »

Property with a rental income perhaps?

But like another poster says, with that amount of money you really need professional advice.

Sorry you have lost your wife and hope your boys will be okay

Regards
Annie

I know property would be a good investment, but it's too much responsibility at the moment. Thanks for your kind wishes.

thick_mike

Newbie2saving wrote: »

I am so sorry for your loss.

I lost my husband a couple of years ago, and I know how daunting this whole process can be. I was only in my early 30's and a total novice to savings and investments.

Firstly, ensure your money is in a high interest account with easy access. That way if you do want to make an investment / purchase you can do so, but it will be earning a reasonable rate (I was in shock for the first few months and didn't do this, also risked losing it if the bank went under). Secondly ensure you split your money to be covered by the FSCS protection, that is £85,000 per bank (remember some banks are under the same institution such as lloyds and...

I would pop some into an ISA for this year, but that isn't much out of your pot. In the future you need to understand how to fill up your ISAs to avoid tax where possible, but don't worry too much now.

I saw a few IFAs, however don't use your banks, they will be interested in your business now and a lot of their advice really isn't that independant. I decided on one IFA that suited my needs, felt comfortable with etc, I know what you mean about paying for something, but this lump sum is too precious to risk. Think of your worry without it.

I went away from property as I saw it as a hassle and I'm not good at DIY, it also didn't make sense to me personally after tax, landlords insurance etc.

Don't rush into anything. I still haven't made my mind up what to do with everything (but I have it earning interest whilst I decide). I did however do one really important thing (as depressing as this sounds). I made a will. If you haven't done so, you really should. I wanted to ensure my son wouldn't come into a lot of money hitting 18/21 if anything happened to me, so I put my wishes down to pay %'s to him on certain birthdays. I don't think this is truely legal, he could contest, however I hope he would respect my wishes in any tragic circumstances.

Lastly, I know you won't feel like it, but maybe look towards a treat for you all. I certainly didn't feel like it and still don't really, but I love to see my little boy smile and that helps slightly!

Good luck. I hope your boys are coping as well as possible.

Many thanks for your advice. May have to swallow my pride and ask a competent person.

I know what you mean about giving a large amount of cash to a young person. I can only imagine what I would have done if i had access to cash when I was 18!!

I think short term I will split the money into 85,000 lots and stick them into instant access savings accounts until I've got it sorted out.