Inheritance Money Advice

LondonColt

Hi all!
I was after some advice for a lump sum that I've just had come through from a relatives will. First, quick rundown of the finances as things stand:

Mortgage: £195k with 31yrs to run. We've made a couple of lump sum payments, as we have a 10% limit without penalty per year, and also overpay per month. Barclays treat the monthly overpayment and the lump sums over three times separately, so we can do both. Mortgage is 2.99% as we stretched everything to afford the place when we bought it, so most savings get nowhere close to this.

Savings: Around £12k, which is an emergency fund and the cash for the credit card balances, which are all on 0%. It's sat in a Marcus, but that's now down to 0.5% and I haven't bothered to move it yet.

We've just come into about £50k of inheritance and I was looking for some advice. On January 1st, we can make a 10% overpayment on the mortgage amount which seems like a no-brainer to start with, but then I don't know what to do with the remaining £30k-ish, plus the £12k in the Marcus. We could max out our monthly overpayment on the mortgage, as well as do the 10% and run it down that way.

In terms of investment aims, we probably have around £15k to put away for the long-term (10yrs+) and then the rest  we'll likely use to buy a new property inside the next 18 months so can't have that tied up. So in terms of Qs:

1) Is targeting the mortgage the right move, and just ploughing as much as possible into that?
2) What's the best option for the long-term £15k, in terms of someone with a relatively low/medium risk outlook. Basic tracker, or something more mixed global fund type.
3) Short term, what's going to be the best return for the rest of it!

Thanks!

Albermarle

The best option for very long term /retirement is usually to make extra contributions to your pension(s) due to the preferential tax treatment.
Are you both working/have workplace pensions ?

NottinghamKnight

How long do you have to run until you could look at remortgaging at a lower rate that would be a primary consideration as to when and how to make any overpayments. You say you are looking to buy another property in the near future is this to live in or rent as you imply you were stretched when you bought your current place. 
Premium bonds probably pay the highest for short notice on reasonable sums but you don't et anything for the first month. 
As albermarle says pensions are most efficient long term, isas offer more flexibility but you don;t get the tax uplift and equities are volatile in the short term at least meaning you have to look for a five or more probably ten year horizon for investments.

LondonColt

Thanks both. To answer those Qs:

1) Yes, I have a workplace pension scheme but my wife doesn't.

2) Our 5 year fixed is up in Jan 2022. We'll probably be at about 60% LTV by that point, based on the value of the flat and we're in much stronger financial position so expect we'd get a much, much better deal. Assume you're asking because as of next year we might get stronger ROI from saving the money, rather than paying off the mortgage?

3) The property would be for us to live in. We're likely to get rid of our current one when we move, much as we'd love to keep it!

Albermarle

 Yes, I have a workplace pension scheme but my wife doesn't

If you are only making minimum contributions ( say 5%) then you should consider increasing them and checking how the pension is invested . At your age you should be in higher growth/higher risk funds. The more you can build up the less likely you will have to continue working until you are 70.

Even if your wife is not earning at all she can still contribute to a pension and get tax relief up to a limit ( free money but not accessible for a long time )