Advice on what to do with an inherited lump sum

Jadds_2

Hi all,

Apologies if there's a better place to put this or a megathread somewhere that I've missed.

Basically the thread title explains why I'm here. My grandad passed away and his estate is being split between his three children, but my sister and I inherit my mum's share as my grandad outlived her. Execution of the will is still ongoing but I've been told my share will be around £40k-£50k, which is much more than I'd anticipated and therefore why I'm here!

Any suggestions on how/where I should invest/save would be much appreciated. I assume knowledge of me and my current financial situation is helpful for that so it's roughly as follows:

I'm 29, no kids or other dependents (except my cat!).

I have just remortgaged to an 18yr, £65k mortgage at 2.49% until 31/5/17 when it reverts to 3.99%

I have no other debt apart from my student loan and have £7k in ISAs and £14k that's been in a Cofunds thing for 10 years.

My initial thought was that I'd pay off another £6k of my mortgage since I can overpay up to 10% of the balance. Aside from that I don't really have any ideas, probably look at a pension fund, so if anyone wants to offer some suggestions it would be much appreciated!

Oh, I am planning on going back to uni in 2017, so will need some money for tuition fees then, but have no other future expenses planned.

G_M

Jadds wrote: »

Hi all,

...My grandad passed away and his estate is being split between his three children, but my sister and I inherit my mum's share as my grandad outlived her. Execution of the will is still ongoing but I've been told my share will be around £40-£50, which is much more than I'd anticipated and therefore why I'm here!

I'd recommend you take your partner out for a meal. If there's any left over (doubtful unless you choose Macdonalds), go and see a good film.

Jadds_2

G_M wrote: »

I'd recommend you take your partner out for a meal. If there's any left over (doubtful unless you choose Macdonalds), go and see a good film.

Thanks, edited now!

DiggerUK

Paying down on your mortgage is a sound plan. You only need to calculate what gross rate you would need, to get 2.49 or 3.99% net, to see how sound that plan is. Try to pay off more as and when you can.

You ask about a pension, as you will need funds in retirement you should consider gold as a part of your retirement plans. Prices have tanked recently, and are the lowest for an age. The advantage is that you can get your hands on the gold before 55 if needs must. Unlike a pension were it is locked away.
..._

noggin1980

gold is still nearly 3 times as high as it was 10 years ago, doesn't provide an income and has expenses to hold it, it's terrible advise to be suggesting gold to him in this way.

atush

Do not consider gold. I consider it only when it is very cheap and that isnt now. Last time it was cheap enought for me was sub $700 an ounce.

You can use your S&S isa allowance, you can keep 6 months outgoings in cash (look at current accts) and you can start up or boost your current pension.

Tlg1991

You could get a nice second hand Nissan GT-R ....

xylophone

Pay off part of the mortgage.

Consider a stocks and shares ISA.

Consider a contribution to your pension fund.

For money you wish to keep in cash, (emergency/uni fees), consider high interest current accounts.

bowlhead99

Tlg1991 wrote: »

You could get a nice second hand Nissan GT-R ....

With £40-50k you could get a cheaper car and a nice personalised registration plate for it - the top one so far at this morning's DVLA auction has been AL15TER for £17k (plus £5k of auction fees and VAT).

But xylophone and atush's suggestions are probably a better use of funds.

noggin1980

This is a decent read

http://www.reddit.com/r/ukpersonalfinance/wiki/lumpsuminvestment

we should have our own I have a lump sum what shall I do with it faq as the question is asked daily.

Jadds_2

Thanks for all the replies and suggestions.

Gonna do some more investigations into ISAs and high interest savings accounts. And the DVLA website!

A megathread or faq probably would be useful, not least so you don't all have to keep repeating yourselves!