What to do with unexpected inheritance monies from late brother?

Pangolin76

Hi All, hoping someone can help with this as its all so sudden and unexpected.

Wasn't entirely sure where to post this as it crosses several forums. I will becoming (subject to probate) into an inheritance from a recent bereavement. The combined amount of money will be circa £550K and a 2 bed flat in Surrey valued at £350k after IHT paid. I already have a flat in London with a £160k mortgage, 50% of which is offset to the tune of £83.5k. I'm lucky enough to work in the public sector, mid- forties with no children or partner, at the moment I will be able to collect the bulk of my pension at 67 (subject to SPA not increasing) with a smaller public sector pension, currently worth around £10k a year, able to be collected at age 60. I would like to retire after 59 when I've completed 30 years in the NHS. If I retire at 60 I need to be able to boost the smaller pension with any investments until I can collect my larger pension (if the country isn't bankrupt by then) at 67. What do people suggest please, my thoughts below...

Surrey flat has no mortgage so will be rented approx £1k a month gross (ex maintenance, voids, management costs etc)

Add money to the offset account until mortgage fully offset (current interest rat is 1.89% for the next 2 years), then becomes an interest free loan until its paid off in 19yrs time.

What do people suggest I do with the £550k cash? I have no savings other than the offset and £20k in a stocks & shares ISA though currently held in cash. I thought I could split the money in half, invest in stocks and shares with one half and potentially buy another flat or two though I'm not entirely sold on the idea of BTL, recent events have shown the dangers of the stockmarket too...
My intention is eventually to move back to Norfolk where I'm currently based due to family reasons, but keep the two flats (mine and my late brothers) for rental purposes and to offset any money I put into the stockmarket, hoping if one fails the other will at least bring some income in...My ideal situation would be to be able to live for 6 months (to avoid the UK winter) in New Zealand each year once retired so buying a property over there at some point would be perfect, depends on how well the savings are doing...

I'm currently able to save approx £2k a month though how long we all have jobs for is anyone's guess, yup, I'm a pessimist, so if all goes well will be able to add another £350k(ish) in savings up to age 60.

Thanks in advance to anyone who can give me other ideas or tell me I'm an idiot for the above....

tiengomar

maybe consult three separate ifa advisers.
do you like your job? will you be able to keep motivated in an average salary job whilst having nearly one million quid assets? the reason I am asking is that with that sort of money you may wish to make lifestyle changes you may not have thought would be possible up to now.
out of curiosity how much did you have to pay in iht?

Pangolin76

No, don't like my job anymore but the pension has trapped me, I won't be able to make a pension up which equals what I can gain from the NHS one (though I feel guilty the public sector pensions are so much better than private ones). 
IHT was approx £245k though my brother had an ISA with Fidelity which was valued at £205k but has dropped so will attempt to reclaim some of the IHT as the ISA can't be transferred, will need to sell so might as well hold off of the re-purchase for two months.
Motivation for anything is a problem right now, my mum passed way just before Christmas, my brother took his own life this year (which is where the bulk of the money and flat come from) and my dad was diagnosed with dementia, so although it looks great to have money I don't feel real lucky and have responsibilities I've never had before...I take your point re lifestyle changes but right now can't see a clear path anymore...

tiengomar

sorry for your losses, I have a patent with dementia and this disease is draining our lives.
with that sort of money I am not sure I would let a pension trap me but that is must me. 
maybe if you consult an independent fa they may be able to advise how investing your ih might outclass working more years in a job you do not like.

Pangolin76

Thanks, my dad has an IFA but I've always been suspicious of them, the IFA always seems to be the one who makes the money regardless...
Good luck with your parent, my gran and now my dad....hoping it skips a generation

adam06_2

Sorry to hear about your losses. 
I think you should quit your job if you don't like it and find something new or even retire. I'm sure your brother would want you to use the money and enjoy life rather than store it away somewhere and carry on in a job you don't enjoy.

If the country goes bankrupt we are all screwed, but at least you would have enjoyed the years leading up to it rather than doing a job you hate.

DiggerUK

Hi Pangolin. Bittersweet time for you, best of fortune going forwards.

Your financial situation shows you are sorted for the rest of your life from were I'm sitting. All you need to do for now is get all monies in a safe space to give you time to think things through. NSI products will see you right for now and they're safe.

With so many years in the LGPS you will most likely not get maximum SP, but that needn't worry you. Maybe consider when time comes not taking tax free lump sum from LGPS and go for bigger pension, if an available option at that time.

I think tax advice is what you really need, more than financial. From what you have posted you seem level headed on the financial side. But with  a budding property empire you will need to be mindful of tax implications.

Keep posting back as you move forward, not everyone here is a shark, rogue or idiot. It seems you need a time out more than anything else, but keep working on till you wake up one morning, look in the mirror and say "sod this for a game of cricket, I'm off"..._

tiengomar

adam06_2 said:

Sorry to hear about your losses. 
I think you should quit your job if you don't like it and find something new or even retire. I'm sure your brother would want you to use the money and enjoy life rather than store it away somewhere and carry on in a job you don't enjoy.

If the country goes bankrupt we are all screwed, but at least you would have enjoyed the years leading up to it rather than doing a job you hate.

I agree with the view above.

I would also add that with the current climate it may be that the pension will not pay out till one is 82 anyway. so if there is an alternative to said pension maybe it is better to pursue that, especially if the OP is not motivated by his job.

Seeking tax advice is also crucial as another poster mentioned, particularly if the government starts thinking about wealth taxes which imho will be inevitable.

Keep_pedalling

You already have a good chunk of your wealth tied up in property so I would not be looking to put more eggs in that basket. We were in a similar situation 10 years ago when my wife inherited a life changing amount. and we did take advise from an IFA, who we still use. 

Whatever you do make use of some of that money to enjoy life, you can’t take it with with you. If you don’t already have one get a will drawn up.

dunstonh

Pangolin76 said:

Thanks, my dad has an IFA but I've always been suspicious of them, the IFA always seems to be the one who makes the money regardless...
Good luck with your parent, my gran and now my dad....hoping it skips a generation

You would hope the IFA makes money as they would be a pretty poor adviser if they cannot remain solvent.    An employee IFA would be paid by the employer.   So, much the same as any other employee.  An owner/director IFA is paid via their business.  Much the same as any other owner/director of any business.       You pay the adviser fee.  No-one else.
The type of adviser to avoid is an FA.   Do not mix the types up.

maisie_cat

tiengomar said:

sorry for your losses, I have a patent with dementia and this disease is draining our lives.
with that sort of money I am not sure I would let a pension trap me but that is must me. 
maybe if you consult an independent fa they may be able to advise how investing your ih might outclass working more years in a job you do not like.

I wouldn't allow a pension to trap me either, we retired early on a low income because hubby took his TFL pension early.
My civil service pensions will keep unless we decide we need them, but it's amazing how simply you can live when you are content with life.