Investing Inheritence money

jab11

Hi .......My wife recently inherited some money following her mothers death. We are now in the fortunate position of being mortgage / debt free. We are seeing an IFA in the next couple of weeks and also a advisor from Legal and General about how to invest the remainder of the money. This amounts to about £150k and is currently held in easy access savings accounts (paying 1.5% interest approx). Would be really grateful for any advice from Forum members please ?
Further background ::
Me , Age 43, full time job, 40% tax payer in company pension scheme
My wife, Age 43, part-time job, 20% tax payer, about to be auto enrolled in a company pension (contributed very little to pensions in the past!)
- we have not used our ISA allowance this year.
Many thanks, John

talexuser

Take the advice from the Legal & General guy with a pinch of salt and research all other options for costs and performance before you sign anything with him.

innovate

If you haven't got any emergency fund (6-12 months living costs), you could fill your respective cash ISAs. Any other money that you plan to spend in the next 2-5 years should go into the best interest paying accounts (currently a number of current accounts) for now, and perhaps into cash ISAs next year.

The rest should get properly invested, in S&S ISAs and in pension schemes. The IFA will advise you on the S&S ISA and may be some SIPPs but they have no incentive to suggest you should put the money into company pension schemes. Have your companies any advisors you could consult about your company schemes?

I would cancel the appointment with the L&G salesman - he will have a limited range to sell and won't give you unbiased advice.

kidmugsy

Look at contributing enough to a pension for you to avoid the 40% tax. Fill ISAs.

"My wife ... contributed very little to pensions in the past!" If there's a good chance that her eventual State Pension won't use up her personal allowance for income tax then pension contributions for her make a lot of sense too.

Any investments or savings that are not sheltered from tax should be in her name.

jab11

I'm afraid my company don't provide advice on their pensions etc so would probably have to pay an IFA to look into this.

I guess the other option is to look at investing in property but not sure If we can bothered with the hassle to be honest !

Thank you very much everybody for your comments ...much appreciated!

atush

Drop the L&G appointment- if you want a second opinion, get another IFA (use unbiased.co.uk if you don't know 2).

AS said above, Cash ISAs or NSI for easy access cash 6-12 months overall spending, then S&S ISAs, and Pensions (for both of you) and perhaps look at things you have let slip like house maintenance/repairs/replacements and car replacement.

Perhaps a nice holiday is in order?

Totton

I'd ensure that I have 6 months salary in savings/easy access accounts, perhaps even consider cash ISA's but you aren't really getting much better int he way of interest rates for tying the money up. Next I would put the max into a Stocks & Shares ISA but for me that would mean buying Investment Trusts and/or funds. Doing this for both of you gets rid of a fair bit, perhaps 50k. With the remainder I would look to further the investment portfolio.

I would go ahead with the L&G meeting, why not listen to their advice and consider it against all your other options, you aren't losing anything but some time and L&G do offer some cheap low cost trackers.

The one that I didn't notice you mention was your attitudes to risk. Consider this carefully as the stock market may not be the place for you if you are likely to panic at the sight of a 40% short term loss as occurred not so long ago. Currently the UK is doing well for my investments but going for a diversified portfolio is the sensible way to things.

So, imho you need to consider your risk tolerance and invest accordingly.

HTH,
Mickey

djkyle

Dependant on where you are in the UK, I would recommend investing it into property. Around Yorkshire you can buy 3 properties for £150k at a combined rental of £1200-1500pcm.

Much better interest than the banks and sees a return of your original investment in around 8yrs.

Or better still you could mortgage 6 properties @ £25k each. Mortgage payments would be roughly £150pm each property.

£3000 income pcm, £900 outgoings = £2100 profit. = Return of investment in 6yrs and you'll outright own 6 properties that will have gained in value too.

Meaning in 6yrs you have £150k and 6 properties worth roughly £60k minimum each. = £500,000+

Have fun

Archi_Bald

Chor, not another newbie post that pushes property, without a single mention costs of owning such property (acquisition costs, maintenance, insurance, agency etc), or the risks of non-occupancy or non-paying tenants. It's getting as bad a the silver bugs.

Daniel54

just another schoolboy with a spreadsheet

atush

Who doesn't understand property bought at 25K needs 5-10K spending on it to get a good rent.

And that to put 100% of you cash into ANYTHING is too high a risk.

buying one inexpensive property could be a possible idea, but only if the OP had skills that could come to bear to keep costs down, and profits up. And until other things are taken care of, should not be considered.