Inheritance

helsmynes

My 1st post so not sure really if I have selected the correct category as it's a bit of a mixed bag all round!

My siblings and I lost our beloved Mum at the beginning of the year rather unexpectedly. We are in the process of clearing her house and marketing it for sale. But this means we will be coming into our inheritance, a bitter sweet thought but I want to do the right thing with the money!
It'll be what I feel is a considerable amount - not life changing by any standard but could make a difference to us if I can do the right thing! It'll be approx £57,000 each.
Am I best to over pay my mortgage by the maximum for a couple of years (approx £40k) - despite the real possibility or moving in the next few years to a larger property.
Or am I best to invest it? Part in a normal ISA and part in an investments ISA? And then use it as hopefully a larger deposit in a few years when purchasing a new property.
We have minimal debts other than our £200k mortgage - maybe £500 max on credit cards + a car on PCP. I would obvs pay off the credit cards but the car is pointless paying it off as we would never want to own it as we change too regularly. Any conflicting advice on this welcome?!
I'd like to save some of it for a rainy day as we currently have no savings! Again am I best to just put it in an ISA? 
It is unexpected money so I am willing to take a risk on some of it but most of it I would like to see some benefit but just so unsure whats best to do?! Should I go speak to an independent financial advisor? Is it enough to see someone like that?! I have no clue as I've never ever had that sort of money! Or should I just what I feel best for us (husband and daughter).
All a bit rambly sorry but I am in a bit of a pickle with it all! Helpppppp!!!
TIA 
H x

xylophone

But this means we will be coming into our inheritance, a bitter sweet thought but I want to do the right thing with the money!

Look on it as a last present from your mother - she would want you to get the best out of it.

I'd like to save some of it for a rainy day as we currently have no savings!

Then an emergency fund for some of the cash is very sensible.

https://www.thisismoney.co.uk/money/article-1583859/Best-savings-rates-General-savings-Internet-branch.html

What interest rate are you paying on your mortgage? If more than you can achieve on savings income, then overpayments could be worth consideration.

Investments are for the long term - you might consider starting a stocks and shares ISA with a lump sum and then making regular monthly contributions - if you paid a lump sum off the mortgage then you might use the savings to contribute to the ISA. Example

https://www.vanguardinvestor.co.uk/investing-explained/stocks-shares-isa?cmpgn=PS0617UKPABIS0001&gclid=EAIaIQobChMI9uz2vvDG5wIVhLHtCh39XgyDEAAYASAAEgLIzPD_BwE&gclsrc=aw.ds

https://monevator.com/using-vanguard-lifestrategy-funds-life/

And what about a holiday/other treat for you and the family to celebrate your dear mother's life?

Malthusian

helsmynes said:

We have minimal debts other than our £200k mortgage - maybe £500 max on credit cards + a car on PCP. I would obvs pay off the credit cards but the car is pointless paying it off as we would never want to own it as we change too regularly. Any conflicting advice on this welcome?!

Around these parts, the advice would probably be "change your car less regularly and stop buying other people's cars for them" . Unless of course you are in the kind of job where a new car is part of the uniform.

Should I go speak to an independent financial advisor?

Even if you did decide to invest some of the money for the long term, IFAs wouldn't be able to justify fees on an investment of £57k minus however much you need as an emergency fund. So you would be looking at a DIY solution. If you are thinking of using the money to move to a larger property it doesn't sound as if you have a long-term outlook at present.

What is your pension position?

helsmynes

Sorry both responses went into junk and there’s been a lot going on! 

We’ve have booked a holiday for August as mum always lived travelling & sunshine :-) 
mortgage rate is 2.39% fixed for 2 years, 10% max over payment per 12 months. 

Moving is long term plan or a good few years away - just know here is not forever home as I think we with outgrow it. Our little miss is 4.5 but as she gets older our current spare room will be her room leaving only a small box room for guests (which are regular as family don’t live locally) 
pension wise I have 2 former pensions from previous employment not totalling much and then a standard compulsory pension with my current employer. I currently work 24hrs a week so it’s not much. 

Still in a total quandary as to afar to do for the best... hence I thought I’d better check up on any advice - thank you both for your responses x

Albermarle

As mentioned, if you need the money to be accessible ( for emergency cash; moving to a bigger property) then you should forget about investing , as it is a long term option ( 10 years +) to get the best results/reduce risk of losses.
If you think a portion could be invested long term , then probably adding extra to your current employer pension would be a good option, as you get tax relief ( free money ) when you invest in a pension. However there will be some limits depending on how much you earn.
Maybe you could add to your partners pension as well .

DairyQueen

How old are you? Are you married? 

Some of the options are obvious and others will depend on your circumstances (of which we know very little).

The obvious bits:
- Pay off misc debt (credit cards, personal loans)
- Create an emergency fund in an instant access savings account. Typically this should be around 6 months expenses.

Other options (favoured):
- Make additional pension contribution. This is always suggested because you will receive tax relief (an additional 25% of your net contribution). Your future self will thank you.
- S&S ISA for money that you wish to stash for 10+ years. This is also a long term investment but will allow access before (currently) age 55. If you are in your 20s/30s this option may carry additional weight and may be a method worth considering to build a fund for upgrading your house in 10+ years.

In times of low interest rates investing is considered a better use of a lump sum over the long term than paying off the mortgage.

Money that you wish to access within 5 years should be saved in cash. Cash is best avoided other than this (plus emergency fund) as rates aren't even matching inflation. Cash will therefore lose value over time. That's a certainty.

Also, perhaps buy something special in memory of your mum. Maybe jewellery for you and/or your daughter? Artwork that reminds you of her? My mum bought rings for herself and me with some of my grandmother's legacy. 35 years on and I still treasure it. Just a thought.

helsmynes

hi Dairy Queen - thank you for your response. 

I’m 42, recently married with a little girl 4.5yo. 

Agreed debts and emergency fund for sure. 

My pensions (2 frozen from previous employment and I’ve current) I need to take some advice, as they r spread all over and not sure on returns or anything - irresponsibly I’ve never paid any attention to them as I’ve never understood how they work or values or anything?! Mum always said as long as u have property that can be your pension... now I know that’s incorrect! She struggled living on a very basic pension which is not what I want to do. So I need some professional advice there for sure! 

Am going to buy jewellery Not sure what yet tho as yet to sort mums jewellery to know what she had and what will compliment what she had etc. 

Thanks again for your response x

xylophone

I have 2 former pensions from previous employment not totalling much 

Do you know what  type of pensions these were?

https://www.gov.uk/pension-types

helsmynes

xylophone said:

I have 2 former pensions from previous employment not totalling much 

Do you know what  type of pensions these were?

Xylophone - as I mentioned I have no idea?! I think one is a investment based pension now deferred as large company sold out and made us all redundant. Now managed by Heineken  transfer value is £26k? 

This is what the other 2 say.. both standard life n basic compulsory work place pensions - one says god Nike retirement plan, one says group flexible retirement plan. One worth £680 again is a former employer and is now frozen. And the other is my current employer of 4 years and has a current value of £1858 - that’s as much as I know .... dreadful I realise not knowing and look to b the most basic pensions but I will get some advice and get it sorted! 

Thank you H x

helsmynes

God Nike? Sorry that should say flexible.... no idea how it changed to that?! :-o

Socajam

I think you are still in mourning and everything is just too fresh.
Deposit the money in a savings account for the time being and mourn the passing our your mom.
When your head is cleared maybe later in the year or year's end, then decide what to do with the money.  Now is not the right time to be deciding on this whilst your emotions are all over the place.