Inheritance while on benefits

MikeJO

Not sure if this is the right place to post this as it covers more than one area but here goes.
My mum died earlier in the year so I'm soon to come into an inheritance of just under £100,000. However my wife and I currently live on benefits (have done for about fifteen years) due to her disability; realise that as soon as the money comes through we'll lose Income Support and Housing Benefit (we rent privately) which amounts to about £1100pm so the capital will dwindle fairly quickly over the next six or seven years.
My question is what is the best place to put the bulk of the money to get the best return over those years? Savings account interest rates are so dismal at the moment I just wondered if there was a better alternative. Any advice appreciated.

Keep_pedalling

What are property prices like in your area?

Torry_Quine

I don't know the answer but just wanted to say your post was a breath of fresh air. You aren't trying to retain your benefits with a large inheritance.

MikeJO

Keep_pedalling wrote: »

What are property prices like in your area?

Not an option sadly, we live in Devon and there's really nothing in our range. I appreciate there are areas of the country where buying a property would be an option but given my wife's health there's no way we could relocate away from all our family and her support network.

MikeJO

Torry_Quine wrote: »

I don't know the answer but just wanted to say your post was a breath of fresh air. You aren't trying to retain your benefits with a large inheritance.

Several people have told me to do that ("you'll never get caught") but I wouldn't be able to sleep at night, was never an option.

atush

Ok, first thing.

Start a pension for each of you. Even if you have no earned income, you can put in 2880 which becomes 3600 once tax relief is added. Keep doing this while you have the money to do so.

Second, you need cash savings to live on so put 12 months of the money into easy access savings. put the rest into a series/ladder of bonds, each one maturing when you need it. So 1, 2, 3 years etc.

If you have things that need repairing/replacing do so now esp if will make your/her life easier.

Consider moving to a cheaper or better equipped home now that you have access to cash for a security deposit?

bigadaj

I guess one of the first things to do is run through your current income and determine what is means tested and what is not, the difference will be what you're looking to finance from your inheritance and consequently give you a timespan for the money.

With some effort you could set up a range of current accounts and regular savers with your wife that would accommodate most of the money, maybe an average of 2.5% interest, though you would have to set up direct debits, using tesco savers accounts generally and organise standing orders to rotate the money around.

The traditional option for this over say six years would be to split the money into year blocks and invest them in fixed term savers, the longer the term the higher the rate generally, and you'd then have say £15000 a year coming out every year to live off.

Timespan would be too short for equity investment, if you did accept risk then p2p lending would give higher returns, though your capital is at risk, certainly possible to get around 1% a month on several platforms before defaults, and default rates are low on many platforms.

xylophone

Would you be able to use the money to buy in care for your wife so that you would be able to work part time?

Glen_Clark

atush wrote: »

Ok, first thing.

put the rest into a series/ladder of bonds, each one maturing when you need it. So 1, 2, 3 years etc.

Doubt if that will do better than best buy retail savings accounts, and sounds awful complicated for an amateur investor on the offchance of making a few quid that will go on loss of benefits anyway.
I agree with the rest of your reply though.

teddysmum

£7500 in 3 Nationwide Flexdirect accounts is a must, at 5% interest with no direct debits required.

Sillym00

If your wife is claiming PIP this can continue completely legitimately since it's not means tested.