Been left money and don't know what to do.

OriolaW

Dave Ramsey is American it would be American currency he references 1,000 is the minimum and is not for all people ideally it would be 3-6months of salary. Idk what the things you mentioned are but then I'm poor the steps are working for myself and many other people

enthusiasticsaver

What interest rate are you paying on your mortgage? It might be worth paying it off early then keeping the endowment when it pays out. Looking at your pension is another option especially if you are a higher rate tax payer. I would say paying into a cash isa is probably not going to give you a good return. You could look at stocks and shares isas, high interest current accounts or regular savers/fixed rate savers.

Do you have other savings/pensions? Do you know how much you are aiming for as income in retirement. You are a year older than me so I think your state pension age is probably 66 so if you want to retire at 60 you have a 6 year gap to bridge.

jamesd

TERRYGL wrote: »

I've been left £95,000 in my late mothers will... I then have a Mortgage of £40,000 which is on an endowment and at the moment is on track to payout in 2024, i have no other debts. ... I would love to be able to put the money away to provide me with an income in my later years but where and who with? ... Oh i'm 58 and still working with Royal mail and looking to hopefully retire when i'm 60.

A few thoughts:

1. Don't make the mistake of paying off your mortgage. It's easy to make more than normal mortgage interest rates these days with investments so that just makes you worse off. Some people just want it gone and are willing to take the loss. Since you already have an investment set up to pay it off and it's on track that doesn't seem to fit your inclinations.

2. I gave a list of seven different peer to peer lending places that combined as I described would pay an average of 7% after allowing for bad debt, before tax. You can scale down from the amounts I gave there.

3. A fair number of P2P lending places offer ISAs. You can fund their type of innovative finance ISA in the same tax year as you fund other types because the rule is only one of each type having current year money at once. No problem to have several of different types. You could also transfer money from past years, no restrictions at all on how you split that money between ISAs. A useful way to generate the ongoing income you're looking for.

4. Make contributions to a personal pension. You're 55 or older so after a couple of months you can take out 25% of what you paid in plus the tax relief you got on it. So do: it's free money for you from your friends at HMRC. If you want to do something else with it, first pay into the pension, then use the 25% for that something else. There are limits:

4a. You are allowed to pay up to your gross pay into personal pensions each tax year, the tax relief you get counts towards this. See 4b.
4b. There is also a limit of £40,000 a year. You can carry forward unused allowance from the last three years to go over this. Unlike 4a, this includes the increase in value of your work final or average salary pension. Likely that you have so much unused from the last three years that this limit doesn't matter.
4c. If you take taxable income using the flexible rules, including by the UFPLS 25% tax free, 75% taxable lump sum, your annual contribution limit is reduced to £4,000 a year. So stick to taking out the 25% tax free lump sum until you're ready to stay within that.
4d. It's easy money, risk free if you leave it uninvested in the pension.
4e. Even a non-working spouse can pay in up to £2880 a year and take out the £3,600 after tax relief. If you have one who's 55 and not yet doing this, let them know about it, it's an extra £720 a year tax free from the kind HMRC folk.

Interest income like that from P2P can be tax free up to around £17,000 a year if a person has no other income, courtesy of the personal savings allowance and starter rate for savings. On top of the tax free bit from anything in an ISA.

Your income in later life plan is a good one and you should be able to bump the capital amount up nicely via the pension contributions then get a nice 7% or so from a broad P2P mixture.

You also probably have the option to retire now if you want to. depends on how much income you need. Not normally a good move to take a work final or average salary pension before it's normal pension age, though, that's where using the lump to live on could come into play.

Eco_Miser

OriolaW wrote: »

Dave Ramsey is American it would be American currency he references 1,000 is the minimum and is not for all people ideally it would be 3-6months of salary. Idk what the things you mentioned are but then I'm poor the steps are working for myself and many other people

But totally inappropriate for dealing with a lump sum inheritance.