Kids have received an inheritence

Weedavey72

Hi everyone. First time poster. 

My kids aged 20 (student), 16 ( college) and 15 (at school gets his money in April) have all received and inheritance of approx £42,000 and we are at a bit of a loss to help them look after the money,

We are looking at Junior ISA’s and topping up Child Trust Fund for the two younger ones and an adult ISA for the eldest one plus a good savings account. 

Ultimately it’s their money but we’d like to be able to offer the best advice we can.

Any advice would be appreciated  

thanks 

DE_612183

is it £42k each or £14k each?

Weedavey72

hi there, it’s £42k each 

amanda1024

Depends when they’re likely to need/want to access the money. Lifetime ISA could be a good bet to save for a house. Otherwise ISAs are only really needed if income is high enough to be paying tax on interest.

Weedavey72

amanda1024 said:

Depends when they’re likely to need/want to access the money. Lifetime ISA could be a good bet to save for a house. Otherwise ISAs are only really needed if income is high enough to be paying tax on interest.

Thanks Amanda, that’s a good point. I think the two youngest will wait till after school/college to buy a car and then the eldest will probably wait till after university to decide what he’s doing. Thankfully none are keen to blow it on a summer in Ibiza 😂, appreciate the answer 

Albermarle

Weedavey72 said:

amanda1024 said:

Depends when they’re likely to need/want to access the money. Lifetime ISA could be a good bet to save for a house. Otherwise ISAs are only really needed if income is high enough to be paying tax on interest.

Thanks Amanda, that’s a good point. I think the two youngest will wait till after school/college to buy a car and then the eldest will probably wait till after university to decide what he’s doing. Thankfully none are keen to blow it on a summer in Ibiza 😂, appreciate the answer 

So probably some fixed term savings account, where the interest rate and the money is locked in for a fixed period, could be useful with the fixed term length in line with when the money will be needed. Plus a smaller amount in easy access accounts ( or Premium Bonds maybe) , in case the urge to go to Ibiza ( maybe with new  boyfriend/girlfriend) does overtake them.

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jlfrs01

when my 2 daughters were left £40k each by my father in his Will, I put half into Premium Bonds and the other half into Junior ISAs. When they turned 18 I handed over the paperwork for both and left them to do with them what they wanted which was to leave the money where it was but ultimately it's their choice.

penners324

They could have a great start for a house deposit.... so fixing a big chunk for 2 to 3 years for eldest and longer for the younger would be advantageous.

Fixed rate savings accounts I mean....

Not convinced by premium bonds. Returns look sporadic and quite low, going off other posts

infj

wow - what a fab start for them - while you will want to have  a mixture of options, money you can get at immediately, money for near/mid future, my one piece of advice ( at 35-40 years older than your children) is to consider putting at least a small amount into a stocks and shares ISA ( a passive world tracker fund). I didn't learn about the value of this until I was in my late 20s and while I've certainly done alright by starting then, starting 10 years earlier would likely see me much  better off now.

Roger175

Lucky kids!

Assuming this will be great opportunity for them to get an early foot on the hosing ladder, I would defiantly recommend they start contributing to a LISA as soon as they are able, but they need to be 18 to do this. Whilst you can only put in a max of £4k per year, this will instantly get a bonus of £1k. Your eldest could stick in 4k now and another £4k in April.

Exodi

Weedavey72 said:
Thankfully none are keen to blow it on a summer in Ibiza 😂

For now, but I'd still ensure they stay on the straight and narrow.

This forum has had countless threads, and I have personal experience of people receiving an inheritance and absolutely racing through it.

Takeaways every day, nights out every weekend, luxury designer goods, expensive car on finance, etc. 

They say 70% of lottery winners end up broke, and a third go on to declare bankruptcy. The fundamental reason is that they do not have respect for the money. How can they?

Most people work day and night for money. They're unlikely to drop £15k on a Rolex because they know that much money might take over half a decade of working a full-time job to save. Someone that has had the money given to them does not feel that burden or appreciate it.

My aunt (who had generally otherwise had a life on benefits) received a sizable inheritance (I believe it was around £180k) and unfortunately squandered all of it within 2 years. She paid off some debts (for the record - I think this is a very good idea), but then after went on fancy holidays (for example, a 4 week trip to Barbados), used HelloFresh + Takeaways for all meals, privately rented a gorgeous 5 bedroom house in a posh area (for 2 people) and paid a years rent in advance for her daughter, and these are the things we knew about. I think just over 2 years later she had moved back into subsidised accommodation, being unable to afford the rent. Easy come, easy go as they say.

With £42k, it gives them all a house deposit and the ability to take driving lessons, buy a car and insure it. It really is an incredible gift. I'm sure they are sensible children, but they are still children - I would not take my eye off them! Kids can be a bit brand obsessed, especially in today's social media era where personal image is everything to kids.