£100K inheritance - what to do?

Luckyboy · 29 October 2018 at 3:46PM

El_Torro wrote: »

Based on what you've said it looks like the best course of action is to increase your pension contributions (preferably by salary sacrifice) so that you are no longer paying higher rate tax.

Since you've already got £175k equity in your house and your next house is going to be worth about £600k that means you'll have roughly 29% equity in your new place. Getting this above 40% will reduce your interest rate, though I still think that upping your pension payments will be of more benefit to you for now. Especially if your current pensions aren't worth much.

I currently pay 3% into my pension each month (only £149) and my employer adds £99. I also have deductions of £124 for childcare vouchers each month. To reduce my income below the higher rate tax bracket, how much would I need to add to my pension pot?

Monthly gross income = £5k, plus £475 car allowance.

Luckyboy · 29 October 2018 at 3:51PM

xylophone wrote: »

You plan to move to a larger and much more expensive property within a couple of years?

Your wife expects to stay at home with the children for the next couple of years?

You might consider making the maximum allowable mortgage capital repayments and holding the balance of the cash in your wife's name in accounts earning as much interest as possible.

Yes - my wife expects to stay at home for a while longer. Most likely the next couple of years.

I'm definitely looking at overpaying my mortgage to the maximum non-chargeable 10%.