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

deltrotter

Put it all in the cheapest S&P 500 tracker you can find, transferring £20k of it each year into an ISA until it is all in there.

Sit back and retire a millionaire at 60. Or earlier if you are also saving on top of this.

Keep_pedalling

uss_tish sai

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.

That would only be true if the house was transferred to the beneficiaries before it was sold. If, as they would be wise to do, the house is sold by the executor on behave of the estate and the proceeds distributed as cash then none of the beneficiaries will have ever owned the property, so would not lose their first time buyer status.

ColdIron

deltrotter said:

Put it all in the cheapest S&P 500 tracker you can find

Poor advice which the OP would do well to disregard

jaypers

A lot depends on your situation and there is no right/wrong answer. Following should be considered……..

1) Pay off any debts/loans and set yourself a goal never to have any credit card running balances. Don’t pay off student loans as there are reasons against doing this - read the MSE piece on this subject.
2) Have an emergency fund of cash savings set aside, maybe £20k. 

3) Deposit towards a property.
4) Treat yourself to something nice……..maybe a car? 

5) £20k in a Stocks and Shares ISA Fund. Read up in here on options and consider carefully. Look at it as a medium to long term investment. 

steampowered

Once you are settled and know where you want to live, use the money as a deposit on a property of your own.

Until then, you have a choice as to whether you let the money sit in a bank account where it will lose value every year due to inflation. Your £100k will lose £6.2k of value this year as inflation is currently at 6.2%. OR whether you invest in stocks and shares, where you would expect to keep pace with inflation and make a return on top - but accepting the risk that your investment will go up and down over time.

If you think you will keep this money for 3+ years, then a stock market tracker fund would be a good option. As much as possible into stocks & shares ISA.

This article gives a good explanation of the level of risk with stocks & shares. Over a 3 year time period, the statistical chance of making a loss is 80% and the chance of making a profit is 80%. The average return generated by stock markets historically is 7.5%. So obviously there is risk involved but it's a risk well worth taking. 

steampowered

ColdIron said:

Poor advice which the OP would do well to disregard

Cheapest S&P 500 tracker would be an excellent option for a young person with a lot of cash.

The only bad advice the Op has been getting on this thread is people suggesting premium bonds (where it will just lose money due to inflation) or bleating on about Lifetime ISAs (you can only put £4k a year into a Lifetime ISA, so that's not a pretty fringe suggestion for someone receiving £100k).

Albermarle

steampowered said:

ColdIron said:

Poor advice which the OP would do well to disregard

Cheapest S&P 500 tracker would be an excellent option for a young person with a lot of cash.

The only bad advice the Op has been getting on this thread is people suggesting premium bonds (where it will just lose money due to inflation) or bleating on about Lifetime ISAs (you can only put £4k a year into a Lifetime ISA, so that's not a pretty fringe suggestion for someone receiving £100k).

It was bad advice as all it said was 'Put it all in the cheapest S&P 500 tracker you can find'

With no caveats about possible short term gyrations , or any idea about the OP's risk tolerance, or keeping any back as savings .

xylophone

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. 

https://www.theguardian.com/money/2019/apr/22/if-i-inherit-my-mums-house-will-i-be-able-to-use-my-lifetime-isa


.........HM Treasury (HMT) has addressed the question of what happens if you inherit property while saving in a lifetime Isa. HMT says you can still be classed as a first-time buyer if you inherit a property but ownership of it is never formally transferred into your name – for example the property is sold after the death of its owner and the cash proceeds are passed to you rather than the title of the property. 

pjcox2005

Depends on what career you are expecting/have started at the age of 25 as that will probably change approach. Personally I'd do the following:

Without meaning to offend, if you've got this money but expect to be on low salaries for a large part of life where money will be tight then LISA for house deposit, pension and investments seem sensible to give security.

If you expect to earn more money than you spend to allow for monthly saving and comfortable retirement then I'd split the fund up into buckets now.

Perhaps into 1/3rds - first third keep for a house deposit, putting £4k into LISA each year (ideally first £4k before 6 April this year) with the rest in a savings account. 

Next 1/3rd I'd have as safety net/emergency funds - perhaps put £10k into a cash access account and the other into an stocks and shares ISA. Pick a fund (not individual shares) that's worldwide and spreads the risk so things like Vanguard lifestrategy is often talked about.

Final 1/3rd but in an easy access account. Write down what you get most fun out of - hobby, sporting events, travel, giving; once you've decided that think what would be top of that list, so sporting events is it a season ticket, world cup match, six nations etc. Use that money to treat yourself to those things over the next 10 years - you won't regret spending it rather than having an extra 4% interest coming in each year. Not everyone has that chance to spend slightly frivolously on things they enjoy but you may quickly get into the habit of not wanting to spend it otherwise and leave it in investments for years with little impact to your life.

Albermarle

Following all these mainly good comments , it would be nice of the OP to respond.......