Surprise 'inheritance' (IHT insurance paying out early)

MarzipanCrumble

Not everybody finds it easy to spend - I don't and I am a widowed single with an estate which is more than IHT taxable.  It is not so easy to spend as a single in the UK.  This is my problem but I suspect that many share it.  

I save.  Always have, brought up by grandparents who massively scrimped and bargin hunted so the habit stuck.  I feel very uncomfortable spending just for me.  However if external house needs doing - no problem!

So OP - would your mother spend?  If not, then expect her savings to grow.

Albermarle

I don't like 'gambling' with things like the lottery; crypto; or premium bonds. I understand I will still have access to the original capital, but I just don't understand the point of them. There have been numerous studies that demonstrate how they even don't keep pace with inflation overall. You have to be very lucky to do better. The only benefit seems to be if you do think you can profit, that profit is hidden from tax.

Most people see PB's as more like an easy access savings account. The average payout rate is a bit less than the best easy access accounts, but you have to remember a lot of people do not shop around and even leave tens of Thousands of Pounds in current accounts. Plus the fact that prizes are not taxable can be an advantage.

Also friends and family often share their results each month, so it is a bit of fun for them and an excuse to have a chat. It is form of gambling I suppose, but in its mildest form The British do like a flutter, and there is a very small chance that you might win a decent prize one day.

Not for everybody, and there are probably better places to put your money from a purely financial point of view, but also a lot of worse places.

Skwizz

I'm an IDIOT!

Haven't stopped thinking about this and now have a much better idea of what to do with it!
Not really for everyone but it seems like a perfect solution for my circumstances.

So, £86k:-
£20k into this year's ISA allowance.
£20k into next year's on April 6th, = £40k and £2,880 into next year's SIPP allowance.
Will leave approx £43k unprotected.

Instead of drawing £16,760 (my £12,750 allowance, plus 25%) from my already invested SIPP next year and then topping up from my ISA for my pension withdrawal and being unable to replace either, I can just use the remainder of this cash instead.
I have a very small cost footprint, so I can dump whatever's left into Premium Bonds for twelve months, then do the same again next year.


I would've been planning to leave my SIPP alone from 2025 anyway, so this way I get to leave it alone early and keep more of it growing for my eventual heirs.
If I do need to take the capital out of ISA's later on, at least it will have had a chance to grow until then (believing I will stand a better chance of making more from it through stocks and shares than the NS & I).


Edit: Marzipan; Yep my family's the same, as am I. My Mother would've found it easier to spend when she was younger and my Father was healthier (and alive!). But they did all the travelling-the-world bit and bought everything they wanted back then. Now she's ninety she eats like a sparrow, won't ever travel again, and has made all her big spends (apart from 'emergencies').