24 y/o looking for advice on what to do with a 100k inheritance

Darclaus

A family member passed away last year and named me and my sibling the sole benefactors of her will when we turn 25. Including a house we plan to sell this will total around 100k each and I will turn 25 in the coming months. I have quite simply no idea what to do with so much money - I currently earn 21k p/a, live in a shared flat in the south west and have no outstanding debts apart from student loans. I've looked into various saving and investment options but have been honestly left clueless as to what the best option is! Seeking advice from family members hasn't yielded much either. I'm not particularly interested in buying a house yet and want to sit on it currently, any advice would be appreciated.

Albermarle

What is the situation with the house ? Normally the house is sold as soon as possible after the death , unless someone is living there , or plans to live there ?  Who is the legal owner , paying the bills etc ? The Executor of the estate ?

Otherwise before looking at investment options etc you need to think ahead about what you might use the money for .Having your own property is usually seen as a good thing . OK you do not want that now but probably at some point you will . If so you can start to plan around that . So for example you could say have a plan like this 

Put £60K somewhere reasonably safe to put towards a house deposit in 5 years time 
Invest £20K in a pension/Stocks and shares ISA for the long term 
Keep £20K to spend ( not necessarily all at once ) Maybe a gift to other family members .

Basically you need to have some idea what you are aiming for before getting into the details .

Daliah

Some of the money should gradually go into a LISA if you are planning to buy a place at some stage https://www.moneysavingexpert.com/savings/lifetime-isas/

Keep_pedalling

How old are your siblings? If you are the youngest then the age clause should not be an issue, but even if you have younger siblings it is highly likely they will still be able to claim their share now as age clauses in most wills are no more than wishes. To be enforceable the will needs additional clauses that deal with a beneficiary not reaching the age specified or sets up a discretionary trust.

easy

Daliah said:

Some of the money should gradually go into a LISA if you are planning to buy a place at some stage https://www.moneysavingexpert.com/savings/lifetime-isas/

Definitely this unless you are planning to buy a property straight away.  You can only put in a maximum of £4k per year,  but that turns into 5k -  so you would be daft not to use this investment vehicle.

Get the house sold first,  and get the money in your bank account,  and then   I would advise you to find a financial advisor who can go through the options with you.  It will be worth your while to pay someone a couple of hundred quid for a consultation session. Personally I would avoid anyone offering free advice sessions -  they are being paid by someone,  and I always feel that their advice will be biased towards whoever they get their commission from.

If you know someone who has money/property ask them who they use.  If you don't know anyone,  or want to keep this matter to yourself,  then you can look on the list here.https://www.unbiased.co.uk/campaigns/p/financial-advisers?gclid=CjwKCAjwiuuRBhBvEiwAFXKaNPEa5GwQR37wZkX8cvnduUJNRFWAtlcc7L-o1p6GL4Y4HAeXwOhVIhoC7ioQAvD_BwE

or here https://www.financialadvisorbureau.co.uk

Albermarle

 then   I would advise you to find a financial advisor who can go through the options with you.  It will be worth your while to pay someone a couple of hundred quid for a consultation session.

If you can find a financial advisor who only charges £200 then probably it will be a wrong'un .

Probably minimum charge for an IFA would be  probably 2% . An FA tied to a firm might charge less, maybe 1% .

Personally I would avoid anyone offering free advice sessions -  they are being paid by someone,  and I always feel that their advice will be biased towards whoever they get their commission from.

Paying for 'free ' advice via commission was banned many years ago .

bostonerimus

Put 20k in the bank as an emergency fund.
Do a detailed budget so you can see where you spend your money and look for areas where you can save. Read some books on personal finance and investing.
Then open a cash LISA, with the goal of contributing the max of 4k a year, to get the 25% government match.

Then come up with a plan to use the rest of your inheritance to make extra pension payments to get the max match from your employer and also open a stocks and shares ISA. For both the pension and S&S ISA I would contribute to a single multi-asset fund with a high equity percentage something like VLS100 or VLS80. It will take you a few years to get the 100k into these accounts and I would just hold the money in a saving account until it's all contributed.

Don't think of this money as spendable or that you are now rich. Do not change how you live other than to maybe consider your finances more carefully and start saving a bit more. Don't buy cars or go on holidays - 100k is a great foundation for your financial future so don't blow it on things today.

xylophone

A family member passed away last year and named me and my sibling the sole benefactors of her will when we turn 25.

"Beneficiaries"....

Assuming that the bequests have "indefeasibly vested" in you and your sibling, the age clause may be irrelevant.

https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem1563

If the bequests have indefeasibly vested, then the trust created by the will  is a bare trust - the beneficiaries of a bare trust have the right to call for access and control at age 18 (16 in Scotland).

Assuming that you will shortly have £100,000 in your bank account, you need to consider your long term aims.

If you anticipate that you will wish to buy a property at some point in the future, you might wish to consider the Lifetime ISA. (£4000),

https://www.moneysavingexpert.com/savings/lifetime-isas/

You might then consider a stocks and shares ISA - perhaps Vanguard would suit. If you had opened a LISA, you would be able to invest up to £16,000.

https://monevator.com/vanguard-lifestrategy/

You might wish to increase your contributions to your workplace pension.

With regard to the balance, assuming that you would prefer only to  dip a toe into investment waters (rather than open a General Investment Account),

 you would look for the best paying account(s) you could find - unfortunately interest rates are low and inflation is high.

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

You could also consider premium bonds.

MX5huggy

Not disagreeing with previous posts LISA, Pension, S&S ISA, Premium Bonds all solid options. But look at investing in yourself, do some professional qualifications, a masters or simply a driving test. Look at becoming a commercial pilot etc. You have the opportunity to drastically improve future earnings if you find the right opportunity. 

P1Fanatic

If the LISA option sounds good (and you will buy a house at some point) and you have £4k now, then get one opened right now (before April 6th) and get the £1k bonus for this tax year and then you can stick another £4k in on/after April 6th and get another £1k bonus for doing nowt.

uss_tish

LISA not an option for house buying if you have inherited directly the relatives property, as you will deemed to have ‘owned’ property even if you never live there and sell it. 

Lifetime ISAs (LISAs)

If a person inherits a house however, or is left one on trust, funds from their LISA cannot then be used to purchase a home, as they are not technically buying their 'first home'. Upon inheriting a home, they can lose their first-time buyer status.