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

[Deleted User]

Albermarle said:

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

It's only been one day. I would personally recommend 75k for a house deposit, 20k in a S&S ISA plus 5k for discretionary spending on things like living expenses and maybe a few days away.

theoretica

One thing about a 'treat'/spend now budget is deciding a long term plan for that too - the inheritance only happens once, but I like treats every year.  You need to decide if you value an extra £100 a month on small stuff, or £1000 a year on a holiday for 5 years, or £5k one off on a car - and not fall into the trap of the house deposit shrinking before you want to buy a house.

bostonerimus

xylophone said:

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. 

Reading the Grauniad article I think there is a mistake (OMG) as the paragraph you quote is contradicted in the conclusion. It pains me to say it, but maybe this FT article is more clearly reported.

https://www.ft.com/lisa_questions

"What happens if I’m saving up for a property through the Lifetime Isa, and then my mother dies and I inherit her house?

The Treasury says: If you have or had an ongoing beneficial interest in a residential property via a trust, (including a trust created by a will or divorce), then you are not a first-time buyer. However, you may be a first-time buyer if: (a) you are named as a beneficiary of residential property in the will of a person who is still living; or, (b) if the trust to which you are or were a beneficiary was only created for the purpose of selling the property and other assets following a death or divorce, and the title of the residential property was never transferred to your name or to a trust which you are an ongoing beneficiary; or (c) if you are only acting in a trustee role and will not be entitled as a beneficiary in the future (and do not have any other interests in residential property)."

tunde10

At that age, you're still young and it important to enjoy the money as well as saving or investing. You still have many years to earn and save. So i like the idea of 3 pots.

I'd put 60K away to invest in one of those All World trackers. This should grow over time and maybe the the time you're 30, you'll be more settled and ready to buy. Obviously the advice of putting 4k into LISA and shift 20k of this into ISA each year stand.

Then a budget of £10-20k to really just enjoy yourself and supplement your income. New hobbies, holidays, sports just things you couldn't afford or weren't willing to spend on. This may last 1-3 years.

The rest i'd just leave in a savings account as and when you need it. If your income increases and you save more than you earn, You can transfer some of this to the investment.

The great thing about this is that the world is your oyster at your age and with that kind of money. You even have the flexibility to move or travel abroad for a significant period of time with no pressure on finances.

With sensible decisions, you'll should never have any money issues going forward.

Jami74

I think if I had been asking this question at 24 I'd have been hoping for a simple answer like 'Put it in X savings account'. For someone who has not experienced having more money than is needed for living on, all the talk of world trackers, premium bonds, emergency funds bigger than a years outgoings, S&S ISAs, LISAs, pensions, moving £4k every year etc could be overwhelming. 

How about for simplicity; when the money drops into your current account, move £85,000 into the highest interest paying savings account you can find so that it is 'safe' for now. Yes I know that over time it will 'lose value' due to inflation but over the next few months you will have chance to think about your future and consider things like buying a home, investing, retiring early etc.

Move the other £15,000 into a savings account attached to your current account. Maybe you would like to go travelling for a year, or do a masters, or party non-stop like a rockstar, or own a car out of your price range, or drink costa coffee every day for the next five years. We all want to live and die in comfort, but when you are the last one left your memories will be important. Don't be someone who looks back and thinks 'I wish I had done .... when I was younger'.

sabretoothtigger

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/

24 has the advantage of going that route, Im too old to get that bonus.  Seems the most applicable and easily used later on.  Housing is very valid use of inheritance for security and long term you will end up better off.   
The other place would be a SIPP or similar pension where you also would get a bonus  to anything contributed.  Depends if you already save etc.   house route seems best for most 


Today is the last day of the tax year, to use up your otherwise unused allowance with some sum even if small seems reasonable.

Albermarle

Deleted_User said:

Albermarle said:

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

It's only been one day. I would personally recommend 75k for a house deposit, 20k in a S&S ISA plus 5k for discretionary spending on things like living expenses and maybe a few days away.

Now nearly two weeks ..........