Where to put inheritence?

~FlowerPot~

We have a dilema, a nice one, but it is beginning to be a concern. We have just exchanged contracts on an inherited property and should complete next Wednesday. We have various payments to make and it will be split two ways, but we will have a significant amount of money to put somewhere!
We need to put it somewhere short term, while to work out the long term plan! But as its over £80 000 even if its short term should we put it in more than 1 account?
I would love any advice on this and also with regards to the long term option. We are hoping to spend some on the house, poss some on the mortgage and invest the rest ~ but never having a pot of money to invest before we have no idea where to begin! Property, savings, stocks and shares? (prob not the latter, but will still look into it as an option)
Its a marvellous position to be in and we are very grateful and really want to make the money work, not flit it away on this and that!
Thank you for any advice, thoughts

jimjames

~FlowerPot~ wrote: »

I would love any advice on this and also with regards to the long term option. We are hoping to spend some on the house, poss some on the mortgage and invest the rest ~ but never having a pot of money to invest before we have no idea where to begin! Property, savings, stocks and shares? (prob not the latter, but will still look into it as an option)

Any reason you say "probably not stocks and shares" as that would probably make the most sense if you're looking to invest for the long term and don't need immediate access to the money. You also have the option of tax benefits which you don't get with property.

Suggestions will really depend on your age and plans - without those it's very hard to make any suggestions

Linton

For the short term have a look at NS&I Direct Saver where any amount of money is guaranteed by the government. The interest isnt great but it's better than the standard bank offerings.

Do you have an emergency fund in cash? Perhaps 6 months living expenses. If not this is a good opportunity to set one up. Then decide what you want the rest of the money for and when. Unless you are being charged a high interest rate paying off part of the mortgage may not be the best option. Knowing what and when will help determine the best place to save/invest it.

~FlowerPot~

jimjames wrote: »

Any reason you say "probably not stocks and shares" as that would probably make the most sense if you're looking to invest for the long term and don't need immediate access to the money. You also have the option of tax benefits which you don't get with property.

Suggestions will really depend on your age and plans - without those it's very hard to make any suggestions

Simply because I know nothing about them, other than its risky!
I appreciate its hard to give advice without many details! We are 48 and 44. Moved a year and a half ago, now have a massive mortgage which we are struggling with at the moment due to my working less (still building a new business) and tax code changes taking more than we expected! So need to address the short term shortfall first. Plus house repairs / new boiler and radiator system and lots more! But after all that want to look at all the long term options

~FlowerPot~

Linton wrote: »

For the short term have a look at NS&I Direct Saver where any amount of money is guaranteed by the government. The interest isnt great but it's better than the standard bank offerings.

Do you have an emergency fund in cash? Perhaps 6 months living expenses. If not this is a good opportunity to set one up. Then decide what you want the rest of the money for and when. Unless you are being charged a high interest rate paying off part of the mortgage may not be the best option.
Knowing what and when will help determine the best place to save/invest it.

Thanks for that will look at NS& I direct saver, that sounds like a good option short term.
And also having an emergency 6 month fund, we do have a bit stashed for emergencies, but I wonder how long it would actually last if we were living off it. I will work that out and ensure we have that covered, That's really helpful, thanks.
I appreciate the mortgage rates are quite low but we might cope better if we pay off some of the capital and keep the term and have a lower monthly rate ~ need to investigate this option.

kidmugsy

It might be worth paying off a bit of mortgage if it gets you a low enough loan-to-value to give you access to lower interest rates. But if not be careful: paying down the mortgage could be irreversible which might vex you if you ever need the money quickly.

Eco_Miser

~FlowerPot~ wrote: »

Simply because I know nothing about them, other than its risky!

There's a wide range of risk under the stocks and shares banner, and neither stocks nor shares individually are low risk, but collective investments ("funds") spread your money (and that of thousands of other investors) over a wide range, and are much less risky. See the Monevator blog for lots of useful info. Look at the links along the top and side for explanations at your level of understanding.
Personally, I consider domestic property other than one's main residence a higher risk than s&s, especially if you're already paying a massive mortgage.

~FlowerPot~ wrote: »

now have a massive mortgage which we are struggling with at the moment due to my working less (still building a new business) and tax code changes taking more than we expected! So need to address the short term shortfall first.

You could just make up your monthly shortfall by taking the interest and a bit of the capital as needed, rather than losing access to the capital by paying down the mortgage.

~FlowerPot~ wrote: »

Plus house repairs / new boiler and radiator system and lots more! But after all that want to look at all the long term options

Don't forget to keep your emergency fund where it's earning a good interest rate (3-5% is possible with current accounts and regular savers).

~FlowerPot~

thank you eco miser ~ will take a look at Monevator page, very helpful

butterflymum

As you mentioned 'short term', also consider that:

People with some types of temporary high balances will have FSCS protection up to £1m for up to six months. Things like the proceeds from a house sale or a redundancy payment qualify for this new protection limit.

See https://www.fscs.org.uk/what-we-cover/questions-and-answers/qas-about-temporary-high-balances/ for more details.

atush

After your short term, once yo have deducted the amount for home repairs-

Make sure you have emergency cash of at least 3 months outgoings (6 is even better). Add tot hi money for upcoming known expenses such as car, holiday etc.

Top up your pension (if you dont have one, get one)

Use your S&S isa allowance

steampowered

Now would be a good time to properly evaluate your retirement plan.

Put some numbers into a pension calculator to see how much you might expect to get if you both retire at the state retirement age. If you have undersaved so far, it may be that the best thing to do would be to put your money into a pension.

Private pensions are simply stocks and shares investments, in a pension wrapper.

If you are saving long-term stocks and shares are probably where you should be putting the money. When you are saving for the long term, the short term ups and downs associated with shares don't really matter - but the inflation that erodes the value of bank savings does.