Moving forward after Inheritance

ossie48

My wife received an inheritance last September.

We lodged £100k into a Santander account at 5% and £125k into NS&I at 6%, wholly sensible in my opinion.

Looking forward I'm wondering what to do and when to do it bearing in mind the Santander is still at its original rate (obviously the NS&I is fixed for 12 months)

We have £160k in a mixture of VLS60/80 so should I start drip feeding the Santander money into it now or leave and see what happens with interest rates.

Background : both retired, mid late 50's, pensions sorted, mortgage paid off, this is simply spending money on holidays, new car every now and then, helping the kids etc.

xylophone

Are both accounts in your wife's sole name?

Advise HMRC of interest in excess of £10,000?

Are you both using your ISA allowances?

ossie48

xylophone said:

Are both accounts in your wife's sole name?

Advise HMRC of interest in excess of £10,000?

Are you both using your ISA allowances?

Yes both accounts are in my wifes name, as a non earner she can an earn up to £18k in interest so will advise HMRC of interest in excess of £10k.

We haven't used our ISA allowances this year so am wondering if we should start drip feeding the £100k in Santander to our Vanguard ISA's now or keep it earning 5%.  

Albermarle

We haven't used our ISA allowances this year so am wondering if we should start drip feeding the £100k in Santander to our Vanguard ISA's now or keep it earning 5%.  

If all your other finances are sorted, then whether to invest or save is up to you.
Normally savings are better for the short term, and investments for the long term, so it depends on when you might want to spend it .
The current good savings rates are a temptation to keep it all in savings but this quite a short term outlook.

EthicsGradient

ossie48 said:

My wife received an inheritance last September.

We lodged £100k into a Santander account at 5% and £125k into NS&I at 6%, wholly sensible in my opinion.

Looking forward I'm wondering what to do and when to do it bearing in mind the Santander is still at its original rate (obviously the NS&I is fixed for 12 months)

We have £160k in a mixture of VLS60/80 so should I start drip feeding the Santander money into it now or leave and see what happens with interest rates.

Background : both retired, mid late 50's, pensions sorted, mortgage paid off, this is simply spending money on holidays, new car every now and then, helping the kids etc.

I'd think that may depend on what "helping the kids" may be within the next 5-10 years. If a substantial amount might be given to them (how many? 2? 3? More?) to help with house deposits, you might want to keep it in savings accounts, variable or fixed.

xylophone

It seems sensible to me for a married couple to use their ISA allowances in view of the treatment of such allowances in the case of the death of one party before the other.   A gloomy thought I know, but thinking of the circumstances of one couple I know where the spouse is a higher rate tax payer, not having to pay tax on ISA allowance inherited from his spouse would be helpful,

ossie48

Albermarle said:

We haven't used our ISA allowances this year so am wondering if we should start drip feeding the £100k in Santander to our Vanguard ISA's now or keep it earning 5%.  

If all your other finances are sorted, then whether to invest or save is up to you.
Normally savings are better for the short term, and investments for the long term, so it depends on when you might want to spend it .
The current good savings rates are a temptation to keep it all in savings but this quite a short term outlook.

I think we'll probably start moving some of the cash into Vanguard but it seems counter productive with 5/6% interest rates. Perhaps do it and forget it, which was my previous tactic. There well may come a time late next year when NS&I adjust down and likewise Santander and we're only left with next years allowance to swallow it up.

Any thoughts on an IFA considering we're talking £385k (£400k with savings elsewhere) or is VLS still a decent strategy going forward which I can manage myself.  

ossie48

EthicsGradient said:

ossie48 said:

My wife received an inheritance last September.

We lodged £100k into a Santander account at 5% and £125k into NS&I at 6%, wholly sensible in my opinion.

Looking forward I'm wondering what to do and when to do it bearing in mind the Santander is still at its original rate (obviously the NS&I is fixed for 12 months)

We have £160k in a mixture of VLS60/80 so should I start drip feeding the Santander money into it now or leave and see what happens with interest rates.

Background : both retired, mid late 50's, pensions sorted, mortgage paid off, this is simply spending money on holidays, new car every now and then, helping the kids etc.

I'd think that may depend on what "helping the kids" may be within the next 5-10 years. If a substantial amount might be given to them (how many? 2? 3? More?) to help with house deposits, you might want to keep it in savings accounts, variable or fixed.

Two of three are lodged nicely (helped with deposits back then) and we gave them a decent lump each from the Inheritance. We're still helping with things like car insurance etc and there's a possibility of two weddings at some point I guess. We can still withdraw from our Investments I guess if needed. 

xylophone

https://monevator.com/low-cost-index-trackers/ might be worth a read.

https://monevator.com/best-sp-500-etfs-and-index-funds-how-to-choose/

https://monevator.com/passive-fund-of-funds-the-rivals/

boingy

Definitely max your ISAs for the next few years. You'll save a whole chunk of tax in the longer term.