where to put inheritence while i decide what to do

Geranium27

Hi everyone

in approx. 6wks I am going to inherit somewhere between £50k & £100k
I've never had more than a few hundred pounds in savings so it's come as a very nice but rather large shock. :eek::)
I will obviously need to get independent financial advice to help me decide what to do with it but it was a major bereavement & I don't want to make any big decisions while I am still grieving heavily.
So I want to just stash it somewhere safe for a few months while I decide what to do with it.
But I'm not well & feel completely overwhelmed by all the different bank accounts & choices.:undecided

I have an ISA with £400 in so I know I will put up to the £15k limit straight into that. But other than that I just have a couple of standard current accounts with HSBC & 1st Direct.
I cant open one of those high interest current accounts as I only have around £400mnth income.
It would need to be relatively 'easy access' as I do intend to move things around, make some investments etc probably in the spring. But I don't just want to have it paid in to my standard accounts as it wont earn any interest.

Can anyone point me in the direction of the type of account i'm looking for/any ideas on specifics, i'd be really grateful as at the moment I feel overwhelmed and confused, I just want somewhere safe & simple to put the money where it can earn a bit of interest while I recover my health & can then decide what to do with it.

Thanks for reading

Mojisola

Geranium27 wrote: »

I cant open one of those high interest current accounts as I only have around £400mnth income.

You don't need to have any income at all to have one of these accounts - all you need to do is pay in the minimum amount each month. Lots of people just recycle an amount from one account to another.

Shmo

They're a terrible long-term investment, but I put inheritance money into premium bonds for a while when my dad died. It was quite a nice distraction checking if I had won anything each month. Certainly didn't get a good return on it but I went in expecting nothing so a couple of £25 presents appearing in my current account every now and again made me disproportionately happy. The maximum you can put in is £50,000.

I'm now heavily invested in shares and enjoy receiving dividends in the same way, though my expectations for the returns has increased somewhat.

ColdIron

If you want to maximise your interest then multiple current accounts are the way to go. Saving accounts pay less interest but you need to be sure you don't have more than £75,000 (from 2016) with any one banking group

But if you have more than £75,000 and just want somewhere safe & simple to put the money until you are better placed to decide, one of the Treasury backed NS&I accounts could fit the bill, see

http://www.nsandi.com/direct-saver
http://www.nsandi.com/income-bonds

Geranium27

Thank you all for replying, that has given me some interesting things to think about


cheers

summersetsheep

I am sorry for your loss.

I agree with the previous posters about putting into high interest current accounts. It is easy to set up automatic standing orders to ferry money between them to meet income requirements. I suggest a few things to think about:

a) Keep the money out of your mind. You probably already know this and are already thinking about this but I feel I have to say it anyway. This money, while a nice chunk, it should be considered precious and kept out of all your budgets and affordability calculations. This money is not enough to be wealthy - it can trick you into thinking you are wealthy or that you can 'afford things'.

Do not let the amount to inflate your lifestyle - lifestyle inflation is a wealth killer. Make sure the money is working for you and keep it out of mind. People really do this - they receive an unexpected windfall and then go on holiday - then they wonder where the money went.

b) Take the time to think about all your options. Do not make a hasty decision. Sometimes the quick decisions - while they seem intuitive - are the worst.

c) Do not be afraid to think against the grain either. Some people will not think twice about buying a new car or putting the lot on a deposit for a house immediately because that is the normal thing to do. Think carefully about your long term aspirations, any debts that you have, an emergency fund before committing it. I would want it to be as diverse as possible to mitigate risks. Like, I would not put the entire amount into premium bonds for example - I have only the minimum because I do not consider it an all-or-nothing and I think there are better options than premium bonds.


Good luck.

racing_blue

Don't overthink this yet. Find a savings account which is protected by the FSCS guarantee. Some suggestions are here

Then take your time to work out what you will do with the money. If you are going to invest some of it, look here or here for inspiration

Sorry that someone who cares about you has died.

missbiggles1

Are you claimimg any means tested benefits?

jamesd

Geranium27 wrote: »

I am going to inherit somewhere between £50k & £100k... I only have around £400mnth income.

I just want somewhere safe & simple to put the money where it can earn a bit of interest while I recover my health & can then decide what to do with it.

Any current or savings account will do for a while. The FSCS protects up to a million Pounds of inheritance money for six months from the day the money arrives in the account so you don't need to worry about the £85,000 falling to £75,000 in January normal limit for the moment.

Looking longer term, you can easily more than double your current income with only £50,000 using investing in a range of peer to peer firms. Places like Ablrate, MoneyThing and SavingStream provide rates in the 10-19% range and the investments are secured on physical property, from houses and land through pawned items and planes. Don't stick all of the money in one place or one loan, it's vital to diversify across P2P sites and loans, just as basic investment protection. With £50,000 allocated to this you might say put £10,000 into five different P2P places.

To give you some idea, much of my recent money has been invested at 19%, 14% and 12%. 8-10% is also readily available. An even split of £50,000 between five different places at 19, 14, 12, 10 and 8% would generate £6,300 a year, £525 a month, of interest. You'd need to set aside some of that to cover inflation so your inflation-adjusted income could stay the same over time. All at 19% would produce £9,500 a year but that's too much concentration in one place to be wise. You could, though, avoid the lowest paying places and try to keep more in the higher paying ones, to achieve a different balance between concentration and income.

The biggest problem with P2P like this at the moment is finding advisers who have any clue at all about it. Most will either know nothing or think it's all high risk like crowdfunding (which is peer to peer investing in startup businesses) not the secured lending I'm describing. At a minimum you could ask them if they have asked the FCA to extend their investment permissions to include P2P. They are all allowed to do it on request but the ones that do at least might have some clue.

The place to learn about P2P loan-based investing at the moment is the P2P Independent Forum. If you stick to the mainstream press all you'll find out about is the low interest rate options like Zopa and Wellesley that pay no more than 4-6% or so.

Geranium27

summersetsheep Thank you so much for your kind & wise words, you think exactly as I do. I am MASSIVELY cautious, risk averse & if anything am over cautious/unwilling to spend. I have guarded against lifestyle infiltration (I didn't know it was called that!) & the other pitfalls you mentioned & am essentially pretending I don't have it. I haven't even told anyone about it as they would all consider me to be 'loaded & I know i'm not, despite it being more money than I ever dreamed of having.


really appreciate your care, your words of warning about not frittering it away & using wisdom are just what I would say to a friend so thanks for that.

Geranium27

jamesd.
gosh i'm massively risk averse so i'm not sure i'd dare, but I will certainly consider this for the future. Thank you for your long detailed post its much appreciated I will definitely investigate.