What to do with my inheritance ?

kidmugsy

HardCoreProgrammer wrote: »

budget cuts (and thanks to that, moped gangs aka highway robbers are totally out of control).

In extremis I suppose the police could divert their efforts from harassing people for various un-PC posts online and turn their attention to proper crime.

justme111

Why pensions are being recommended- because your wife's retirement age would be 67+ in her teacher's scheme. Surely she would not want to work for that long let alone in teaching. So the private pension that you would contribute to now could be used to help to fund your family from the moment she stops working ( after 58 I believe subject to being fiddled with by future governments) to her TPS retirement age.
I would split the inheritance indeed into :
-repaying debt -10
- emergency fund ( either santander or other smaller accounts)-20
- S&S ISAs -40
- chunk of mortgage paid when you can -60
- pensions for you two- 40
-childrens ISAs -20
Then use the funds you got freed from debt repayment for a year to spend on something your family would enjoy and tell children it was a gift from their grandfather..

Audaxer

kidmugsy wrote: »

You can each save up to £50k in premium bonds - they are offered by ns&i so your capital has a Treasury guarantee. They'd pay you the equivalent of about 1% p.a. tax-free in the usual £25 or £50 monthly prizes with the remote chance of winning a bigger prize. If your new mortgage loan costs you about 1% p.a. it's roughly all square but with the PBs giving you far more flexibility and liquidity than overpaying. And you could tease your wife about gambling with PBs.

Premium Bonds may pay out an average of 1% on the whole, but there is no guarantee that all individuals will get prizes amounting to 1% per annum. I had £10k in Premium Bonds for 10 years and certainly didn't have winnings anything near the equivalent of 1% per year.

atush

kidmugsy wrote: »

Why would the fact that an investor is a novice make the least difference at to whether some gold sovereigns proved to be a good or bad investment? The universe doesn't give a hoot about how experienced an investor I am.

Because novice investors starting out dont have a large amount of money. So if they put half or more in sovereigns, that would not be a diversifed approach. And gold rampers tell them to put the lot in gold, not 2% or so.

Gold should not be a large part of a diversifed portfolio.

I really thought you were not a gibbering idiot. Shouild I re assess?

atush

HardCoreProgrammer wrote: »

The usual pension enthusiasts come out of the woodwork in droves again. Just to warn you:
1. You are both basic tax payers. Remember that while you get 20% tax credit paying in, this will be clawed back when you come to withdraw from it. I would bet that tax would be higher at that point (e.g. some are campaigning to merge income tax and NI, and if they succeed, tax would become 32%), so you may even be making a net loss.
2. Your money is locked until a time which can be changed at a whim by the government in power. When I started my pension 15 years ago, I could draw on it at 50, now it is 58. I start to wonder if I will ever live long enough to draw it ...
3. There is no legal way to get it out before 58, so it is sitting duck to tax raids.

I would just pay down the mortgage, if it makes you sleep better at night. This is exactly what I did. Not having to worry about how to pay the bills when I lost my job during the financial crisis is worth every penny of the theoretical gain I forfeited.

Rubbish. No one can give an opinion that takes into account things that might not come to pass.

bcfclee27

Thanks for everyone's advice I really appreciate it.

So thanks to this board I have completely changed my original thinking. My plan was to pay nearly all of it in into my mortgage but having read people's reasoning on here, I will probably pay little if any into the mortgage.

My father in law has used a IFA for many many years who he knows and trusts and has done well with in accordance to their expectations and risk levels.

I am going to see this IFA with a view to using him as my knowledge on financial matters is very limited as you can tell.

However my aim is to pay some into S&S isas and possibly some into pensions depending on the advice we are given.

What are people's feelings on IFAs I imagine opinions will vary and massively dependent on their ability. However I feel I need one due to my lack of knowledge and feel that my father in law trusts his after many steady years.
At least this is better than me using a total stranger etc...

Audaxer

Probably okay to have an initial meeting with the trusted IFA that your father-in-law uses to get an idea of what he can do for you and his costs. As you sound as you now have a good idea of what you want to to with the inheritance, I would be tempted to DIY it unless you are very impressed after your initial meeting with the IFA and you don't consider the costs excessive.

It would be interesting to know after your meeting what costs you are quoted by the IFA, and whether his proposed advice/strategy would be much different to what you are already thinking of doing with the money.

HardCoreProgrammer

Rubbish. No one can give an opinion that takes into account things that might not come to pass.

Is this the best you can come up with? No rational argument so go for the ad hominem heh?

So you are saying in effect: trust the government not to screw with the pension pension system, like they did since time immemorial, for the next 2x years. Do you really mean it?

If OP wants to retire early, there are plenty of other ways to save. They can put 40k into ISAs per year (with their income probably cannot save that much per year anyway) and they can get the money out the moment the government does something silly.

Advising a basic rate taxpayer with no employer contribution to pay into a pension is irresponsible.

By the way, my last post did not name names. But you cannot keep yourself from taking the bait can you?

kidmugsy

Audaxer wrote: »

Premium Bonds may pay out an average of 1% on the whole, but there is no guarantee that all individuals will get prizes amounting to 1% per annum. I had £10k in Premium Bonds for 10 years and certainly didn't have winnings anything near the equivalent of 1% per year.

Of course there's no guarantee, it's a lottery for heaven's sake. But the bigger their holding (up to £100k between them) the likelier it is that their returns will approximate 1% p.a.

kidmugsy

atush wrote: »

Because novice investors starting out dont have a large amount of money.

What are you on about, atush? Our OP is about to have £190k.

atush wrote: »

So if they put half or more in sovereigns,

Nobody here suggested any such thing. You've just made it up.

atush wrote: »

Gold should not be a large part of a diversifed portfolio.

Says who? Why not? Harry Browne recommended 25%. I've seen people recommend 15%, 10%, 5%. Nobody can know what will prove best with hindsight. 2% seems trifling to me, but each to their own.