Inheritance, what to do with it

kempiejon

jaylockwood1978 said:

Thanks for all of the comments, I didn’t receive any notifications so am sorry for not replying earlier.
im 46 and work in the NHS so have the NHS pension. 

As for goals, its all very sudden so wasn’t expecting to inherit the money. 

I’ve maxed out an ISA and plan to max out my partners ISA too. Also fill an ISA this year for my son. 

As for mortgage, so it’s not worth overpaying until the fixed rate ends? 

You can get a return greater than the mortgage is costing you.
So it makes financial sense to park the money elsewhere for now. However it feels good to take a lump off your mortgage and that reduces your term or monthly bill. Even though I have a good rate for my mortgage too I added a lump sum and do over pay each month. Watch out for fees for overpayment. 
If your savings interest is too much there will be a tax bill.
You can have NHS pension and pay a private pensions, just need to work out your limits.  Remember you cannot access pension funds until you're 67/68; funds invested get a tax rebate.
With ISAs filled perhaps £50k into premium bonds is a good place to park cash as winnings - which with £50k will be most months - are not interest and not taxed.
Rough numbers 2 x £20k to ISAs now, more in April and £50k to PBs and something for the kid and £40k in a savings account until next tax year for a new ISA, provided you don't have masses already then you might stay under the allowance for interest tax.

Linton

jaylockwood1978 said:

Thanks for all of the comments, I didn’t receive any notifications so am sorry for not replying earlier.
im 46 and work in the NHS so have the NHS pension. 

As for goals, its all very sudden so wasn’t expecting to inherit the money. 

I’ve maxed out an ISA and plan to max out my partners ISA too. Also fill an ISA this year for my son. 

As for mortgage, so it’s not worth overpaying until the fixed rate ends? 

Look at it this way, by saving the money rather than overpaying your mortgage you are beffectively borrowing money at 1.94% from your mortgage supplier and lending the same money to the bank by putting it into a savings account at around 4%.  So if the mortgage rates go above savings rate in 2 years time you will be able to pay off more of your mortgage than if you had paid it off earler.

Bostonerimus1

1) Pay off all high interest debt like credit cards and car loans.
2) Put 6 months' to a year's spending in the bank for emergencies.
3) Make extra pension contributions into a low cost index fund, if you have a long time horizon use a global equity fund.
4) Same as 3) but for your ISA.
5) Same as 4) but for General Investment Account
6) Make extra mortgage payments.

wjr4

kempiejon said:

jaylockwood1978 said:

Thanks for all of the comments, I didn’t receive any notifications so am sorry for not replying earlier.
im 46 and work in the NHS so have the NHS pension. 

As for goals, its all very sudden so wasn’t expecting to inherit the money. 

I’ve maxed out an ISA and plan to max out my partners ISA too. Also fill an ISA this year for my son. 

As for mortgage, so it’s not worth overpaying until the fixed rate ends? 

 Remember you cannot access pension funds until you're 67/68; funds invested get a tax rebate.

The minimum pension age is 55/57.

Ocelot

I believe you only get 40% pension tax relief on the proportion of the income that exceeds the higher rate bracket.

kempiejon

wjr4 said:

kempiejon said:

jaylockwood1978 said:

Thanks for all of the comments, I didn’t receive any notifications so am sorry for not replying earlier.
im 46 and work in the NHS so have the NHS pension. 

As for goals, its all very sudden so wasn’t expecting to inherit the money. 

I’ve maxed out an ISA and plan to max out my partners ISA too. Also fill an ISA this year for my son. 

As for mortgage, so it’s not worth overpaying until the fixed rate ends? 

 Remember you cannot access pension funds until you're 67/68; funds invested get a tax rebate.

The minimum pension age is 55/57.

Quite right. Must have been at the sherry.

aroominyork

jaylockwood1978 said:

Thanks for all of the comments, I didn’t receive any notifications so am sorry for not replying earlier.
im 46 and work in the NHS so have the NHS pension. 

As for goals, its all very sudden so wasn’t expecting to inherit the money. 

I’ve maxed out an ISA and plan to max out my partners ISA too. Also fill an ISA this year for my son. 

As for mortgage, so it’s not worth overpaying until the fixed rate ends? 

That's probably correct. You could plan to pay off the mortgage when your 1.94% term ends, and in the meantime earn a greater amount in interest. We can provide more info if you tell us what rate you pay income tax at (and, if at basic rate, how close you are to higher rate), how much is outstanding on your mortgage, and exactly when your 1.94% mortgage ends.

Dazed_and_C0nfused

Ocelot said:

I believe you only get 40% pension tax relief on the proportion of the income that exceeds the higher rate bracket.

And is actually due to be taxed at higher rates.

Interest (or dividends) falling into the higher rate bracket that are taxed at 0% won't generate may higher rate tax saving.