My inheritance - what to do with it? HELP!

jim8888

Personally, I'd pay off the 9k debt, put aside an "emergency fund" equating to 3 months net earnings (but topping it back up when you dip it), look at putting extra into your pensions and putting the rest into a Vanguard Global tracking fund, wrapped in an ISA.
And treat yourself to a nice family holiday - hardly any family regrets doing Disney at Florida....

kidmugsy

Iwanttosave75 wrote: »

I have inherited £120k and I’m not sure what to do with it. I’m not sure whether to pay off all my debt, including my mortgage or pay half of the mortgage and save/invest the rest.

I have £103k outstanding in my mortgage and around £9k unsecured credit card/loan debt.

Out of tidy-mindedness, in your shoes I'd probably pay off the £9k debt.

Iwanttosave75 wrote: »

My mortgage is 2% interest. I can overpay 10% per year but if I pay it off in full it will cost me £547. (0.5% of the balance).

That's a pretty small penalty for clearing the mortgage. I'd be tempted to clear it. This would leave you with about £8k capital. I suggest you use it as an emergency cash fund, sticking it into current accounts that pay 5% AER. The mortgage payments freed up every month I'd put into regular savers likewise paying 5% AER.

As a regular saver matures every year you can decide whether there's an expenditure you'd like to make, or another savings tactic you'd like to use, or an investment you'd like to make. That latter could be in a pension of some sort, or a LISA, or an S&S ISA.

This strategy would generally be seen as distinctly conservative - i.e. low risk - which may well be sensible while the US stock market looks so expensive.

If you think that you're a natural risk-taker you may like to consider something else. For example, bung £10k into the mortgage, £50k into the Marcus savings account (or even into Premium Bonds) and £20k each into cash ISAs. That £40k would be up your sleeve for investing in equities when the US stock market crashes. All you'd need to do is transfer the cash ISAs into S&S ISAs and invest the loot. Then in tax year 19/20 you could transfer more money into the mortgage, and so on. Just be sure to keep an ample emergency cash reserve to hand. And also, I suggest, put some of your ISA money specifically into LISAs.

You are spoilt for choice. The thing to keep an eye on, I suggest, is the US stock market, as represented by the S&P500 index. The thing to assess is your appetite for risk. Don't pile all, or almost all, the money into equities if the thought of a 50% bear market causes horror. Remember that many of the commenters here take a sunny - and in my opinion an absurdly uncritical - view of the outcome of equity investing.