Lump sum inheritance - how to put to best use to achieve early retirement?

CFrog

Having read through the detail a couple of times, and in no particular order:

• Like some of the other posts, I too would be inclined to pay off the mortgage as this would at least give you both peace of mind, particularly with your OH being self employed.  If you decide not to, I wouldn't rush into fixing a new deal tho'. 
• Pay off the car loan but check there are no penalties for early repayment;
• Your emergency fund seems too low so I would increase this to c. £100k to give you a couple of years 'cover' should circumstances change.  I'd consider NS&I Income Bonds as it's easy to access the money if you need it and it generates c. £100 pm interest.  Premium Bonds could be used as an alternative but you obviously lose the monthly interest, but who knows, you may win every so often;
• Invest the balance of the inheritance and use this 'pot' to 'feed' both your and your OH's ISA contributions for as long as you can (have a look at the 'bed and ISA' info at Hargreaves Lansdown - https://www.hl.co.uk/investment-services/isa/bed-isa-sipp).  Personally I wouldn't go to an IFA for support on investing the pot as there are plenty of knowledgeable and willing people on this forum who can give you some great advice on how to invest the 'pot';
• Increase your salary sacrifice pension contributions as much as you can; 
• Set up the JISA's for your children;
• Despite his reservations, I'd suggest your husband sets up a SIPP and makes contributions out of his business;
• I'd speak to someone about rationalising the separate DC pension pots and maybe moving them into a SIPP if you can.  If you haven't done so already, have a good look at the Pensions forum on this web site.
• Although it's not mentioned, I'd have a look at your life insurance requirements.  There may be some opportunity to rethink your cover given your change in circumstances.