What to do with inheritance money...?

hanb

Hi all,

I'm after some advice if possible. I inherited some money a couple of years ago and it's currently just sat in a couple of different accounts. It's about 70k and split almost 50/50 between an ISA paying 1.6% and another account paying less.

I currently live in a rented flat which I'm tied to until September. I had thought about buying a place but I live in Bristol and being on my own I can't get enough of a mortgage to get a property I'd like in the area I want to be so I'm thinking about all my options either short term and then buy somewhere smaller or not where u want to be in the hope the market helps make a profit or something a little more long term until I'm in a position to buy what I really I want. This is all of my savings so don't want to go taking crazy risks.

Not sure if this is the best place to post but any opinions would be appreciated.

Thanks in advance

PeacefulWaters

Pay off debt.

Play the interest from current accounts game.

http://www.moneysavingexpert.com/savings/savings-accounts-best-interest?_ga=1.180715239.1116300417.1393518509

hanb

Sorry, should have added that I don't have any debt, thankfully!

I've been reading a lot about the different accounts which certainly seems the most straightforward way, just always feel I'm missing something else! Thank you

xylophone

Help to buy? http://www.bristol.gov.uk/page/housing/other-housing-options

supersadie

Here's what I'd do:
Split between
1 Premium bonds - worth a punt and safe
2 fixed rate bond if you're going to wait
3 savings account or ISA with instant access
4 stocks and shares ISA - pick one with low charges; not risk free, but if the investment has a good record of tracking an index, it's less risky than trying to pick winners - not for a quick win but if you can wait
If you put your money in regularly you can also take advantage of pound cost averaging, again keeping risk down

It still holds true that if you can buy a shoe box in a good area, it's better than buying something bigger somewhere less desirable..

Good luck

kidmugsy

Given that you hope to spend the money in the next few (5?) years, I'd avoid investing. For savings you could go for , say, £5k at a Lloyds Club current account (4% p.a. gross), £2k at TSB high interest C/A (5%), £2.5k at Nationwide Flexdirect (5%), and £20k at Santander 123 (3%), which you could also use as the account from which to pay your bills. That's about £30k looked after. For the rest consider even more messing around with current accounts, or using your ISA, or Premium Bonds - you're allowed up to £40k at the moment. Then if a house price slump comes along, you're ready.

hanb

Thanks all. Already filled my ISA for the year (from the other, lower rate savings Acc).. With the current accounts they need a certain amount paying in each month don't they? I'll have to think about how to work that. And will definitely have a look at premium bonds.. Thanks again!

kangoora

hanb wrote: »

Thanks all. Already filled my ISA for the year (from the other, lower rate savings Acc).. With the current accounts they need a certain amount paying in each month don't they? I'll have to think about how to work that. And will definitely have a look at premium bonds.. Thanks again!

When you say this year, do you mean since April 5th? Or do you mean from the 2014-15 tax year (before April 5th)?

Don't forget that if the conservatives get re-elected they are going to bring in a Help to Buy ISA, start with £100 and add up to £200/month - then after 5 years you can get up to a £3k bonus (so 25% bonus on top) if you use it to buy a house for the first time. You could draw out of the lowest paid interest account and fund the HTB ISA with it.

I'd strongly suggest looking at opening one of these if/when they become available if you are looking at a 1st time house purchase in the near future.

hanb

Thanks Kangoora! I've put in the 15/16 allowance this month. Due to the amount of savings I have I was offered a premier account with HSBC that offers 1.6% on their loyalty ISA which is much higher than my savings account so it's the first thing I did on April 6th.


I've decided I really need to be a grown up about all this now instead of leaving it in account, not thinking about it and putting off any decisions I need to make... about time really!

macman

Santander 123 account will account for £40K if you open two, one sole and one joint account. You need to finance it by £500pm, but this is easily done simply by SO-ing that amount back and forward from the feeder account each month.
Plus 2 DD's on each account, use these for your water/CT/gas/elec/phone/broadband providers and the cashback will easily cancel out the £2pm fee.
3% after tax is much better than the current ISA market will pay you.

numbers123

kangoora wrote: »

Don't forget that if the conservatives get re-elected they are going to bring in a Help to Buy ISA, start with £100 and add up to £200/month - then after 5 years you can get up to a £3k bonus (so 25% bonus on top) if you use it to buy a house for the first time. You could draw out of the lowest paid interest account and fund the HTB ISA with it.

I believe that Labour have also said they will do the same. Of course, whichever government is in place after the election can introduce an emergency budget which can be different to what was announced recently.