Where to invest an inheritance that I don't immediately need

pyrrhus80

I've recently inherited around £20k.
I'm a low wage earner with no other savings or investments - but I'm fortunate enough to have no immediate need for the money. Where would be the best place for me to put it?

• Main goal is simply have it earning more than it would do in my regular savings account.
  
• I'm happy to have no access to it for a year or two.
• I'd prefer the process to be as quick and painless as possible. If I need to jump through all sorts of hoops, I'll likely lose interest (pun intended!) and it'll end up sitting in my regular savings account for the foreseeable future.
  

tacpot12

I'd recommend Coventry Building Society, just because I had an ISA with them a few years ago and they were good, and their rate is competative at the moment if you go for their Triple Access Saver (Online) account. Interest rate is 5.2%. This is variable, but should only change if the BoE base rate changes.

The allow allows upto three withdrawals per year which might be useful to you.  

wmb194

pyrrhus80 said:

I've recently inherited around £20k.
I'm a low wage earner with no other savings or investments - but I'm fortunate enough to have no immediate need for the money. Where would be the best place for me to put it?

• Main goal is simply have it earning more than it would do in my regular savings account.
  
• I'm happy to have no access to it for a year or two.
• I'd prefer the process to be as quick and painless as possible. If I need to jump through all sorts of hoops, I'll likely lose interest (pun intended!) and it'll end up sitting in my regular savings account for the foreseeable future.
  

https://moneyfactscompare.co.uk/savings-accounts/

It isn't all or nothing, though. You could do a combination of things.

p00hsticks

pyrrhus80 said:

• I'm happy to have no access to it for a year or two.

You need a longer timeframe that a year or two to be considering investments - think five to ten years minimum, to allow for fluctuations in the markets - so I'd say your choices are really limited to the best rate savings account you can find.

Brie

I went for a Santander account that is giving me 5.2% with instant access despite me not expecting to need any of it for some time.  I splintered off a relatively tiddly amount (£2k) to put in premium bonds which I expect to leave much longer just for the fun of it.  

Albermarle

I'm a low wage earner with no other savings or investments 

No workplace pension ( which contains investments)?

Linton

The best place to put  your wealth depends on when in the future you will need it.  You say you are happy to have no access to it for a year or two.  So are you saying you expect to have need of your inheritance in 2 years time?  All of it??  Or would you be hapy to have half in a year or two and the rest in say 5 years?

The point of this is that the longer you can leave the money the greater the return you will get.  It is not just a matter that if the money is saved fior 2 years rather than 1 you get the interest for twice the time..   In addition, the longer the time period you save for the more access you get to better returning options. 

If you are talking putting the money aside for up 5 years then the best option is a savings account.  Generally the longer the period for which the money is inaccessible the better the interest rates you will get.

Beyond say 5 years (or preferaby 10)  you run significantly into the problem of inflation.  Savings accounts often return less than inflation, so your wealth in £s is increasing but what you can buy with those £s is decreasing.  At that point investing in shares starts to become worthwhile.

The good thing about shares is that over the long term they should beat inflation.  The down side is that over the short term the price can fall.  So if your time period is small you run the risk of ending up with less than you started.

Sadly there is no short term way of getting significantly more than from a savings account.

ColdIron

Who do you bank with at the moment?

If you don't pay tax an ISA won't do you much good. Perhaps look at 50/50 easy access and a fixed term account

https://www.moneysavingexpert.com/savings/savings-accounts-best-interest

Robin9

Have you any debt?

pyrrhus80

Linton said:

So are you saying you expect to have need of your inheritance in 2 years time?  All of it??  Or would you be hapy to have half in a year or two and the rest in say 5 years?

No, I only said one or two years arbitrarily. There's nothing that I expect to need it for in the foreseeable future.

Linton said:

If you are talking putting the money aside for up 5 years then the best option is a savings account.  Generally the longer the period for which the money is inaccessible the better the interest rates you will get.

Sadly there is no short term way of getting significantly more than from a savings account.

That's fine. It's currently in a Starling arrount and I'm quite happy to leave it there if there's no significant benefit to moving it elsewhere. I just find all the terminology very confusing,

For example, Starling (who I'm currently with) claim to offer a "Fixed Saver" account where you can "lock away savings for a year and earn 5.53% AER (fixed) interest on balances from £2,000 up to £1,000,000."

What happens after the year is up?

pyrrhus80

Robin9 said:

Have you any debt?

no