What to do with £80,000 from inheritance?

reacon84

I'm due to shortly receive £80,000 from inheritance and have no idea what to do with it. It's a crazy amount of money. I feel a bit guilty receiving it. There was more but i've managed to pay my mortgage off with that and am now left with the £80,000.

I feel this amount of money could be used to generate extra income and was initially thinking of investing in property and renting to students?

I just want to use it in a way where i'm not involved too much, so the thought of being phoned up at midnight and being told the boiler is broken doesn't really appeal to me!

Apart from that i've seen Virgin Money do a decent(ish) fixed bond so was thinking of splitting the £80,000 in half, putting some in a 2 year and the rest in a 1 year bond then once they mature, withdraw it all in put it into another bond with the best rates at the time.

Any advice?

TCA

You'd need to provide a whole lot more details about your personal circumstances before anyone could offer an option. Employment, income, tax status, age, pension, other investments, attitude to risk, etc...

Kernow666

if your a bloke i know what i would do with it especially with the euro rate so strong

reacon84

Employment: Trainee accountant
Age: 30
Income: £25,000
Other investments: £30,000 premium bond (from other inheritance)
Risk attitude: Extremely low risk

TCA

Personal or employer pension?

JohnRo

Personally I'd ditch the premium bonds and look at creating a diversified equity income investment portfolio, if extra income is what you really want, with the 80K and the 30K added. Perhaps leave £100 in PB's if you like the thought of being in with a chance of the big win.

That's not extremely low risk though but then few things are in these days of politburo dictat and market manipulation with asset bubbles everywhere.

Otherwise just look at filling as many high interest current/savings accounts as you can, starting with the highest rate first.

enthusiasticsaver

I agree with JohnRo and you should ditch the premium bonds and fill up current accounts (Santander 123 will take the most at £20k and if you are married or have a partner you can have one sole and one joint).

Personally I would look at stocks and shares isas and extra contributions to your pension with at least half of the rest unless you are going to need it in the next 5-10 years so if you really intend buying a property you might be better off using the high interest current accounts and the Virgin fixed term bonds. Coventry BS also do a fixed rate isa at 2.25% so that would be tax free but it is 4 years which might be too long a term for you.

Congratulations anyway and use it wisely

jimjames

reacon84 wrote: »

Employment: Trainee accountant
Age: 30
Income: £25,000
Other investments: £30,000 premium bond (from other inheritance)
Risk attitude: Extremely low risk

Age 30, if you are looking to make this money work well long term you will need to reconsider your attitude to risk. There are so many risk elements to consider and long term inflation is important yet invisible compared to seeing stock market fluctuations.

Ryan_Futuristics

Does anyone know how safe those Virgin Money bonds are?

I'm not a big bond investor, but I'd be nervous about a single £40k bond (unless it's government protected) - there are always unknown unknowns ... If there weren't I'd say you could quite happily move it all into RateSetter and FundingCircle and be earning a risk-free £6000/year from it immediately (before tax)

I'd echo the advice to construct a conservative, well diversified portfolio, and I think it's good to have at least £10-15k easily accessible in cash ... and a portfolio's something you can feed money into over many years, as you get more comfortable with it, and it begins to earn money for you

jimjames

They're not bonds but savings accounts so full fscs protection.

Other thing I'd say is that investing in property doesn't match the stated very low risk profile.

atush

I agree. A BTL is fairly high risk, and means most of your omeny would be in a single asset (property) with is itself high risk. Doesn't anyone remember a few years back when property crashed?

You need to give details of your pension, I'd be adding more there. Esp as a trainee acct, once your exams are over and you have qualified you'll go up to over 40K and be in higher rate tax territory.

I'd move the PB money onto current accts as your emergency fund, i'd max out this year and next years ISAs, and top up pension by a substantial amt.