£40k inheritence - best returns for the risk averse.

CuttySark12

My wife is due to inherit circa £40k.
Being the uber cautious type excessive risk is not an option.
Looking for the safest option for locking away/reviewing every couple of years or so - no need for regular quick access.
Obviously had a brief look at ISA options for £20k but also wondering if topping up of work Pension is a good route - (shes 58  & currently on target with state pension forecast) and how this competes with likes of ISA's etc...
All thoughts most welcome - apologies if anything reads as excessively stupid.

MeteredOut

If you don't need access to the money*, and if you're happy with the level of risk in her pension investment funds, you'll be unlikely to beat the tax benefits of adding as much as she can to her pension (or you might be able to select a different fund for this portion of her pension). How much she can invest will depend on her salary and how much she's added over the past few years.

A fixed rate ISA is probably the best risk-free choice - there are posts on this board with the latest best rates.

(*) Since she's over 55 (changing to 57), she'll be able to access 25% tax free out of her pension.

Brie

And there's always premium bonds!!

Mark_d

Since you mention locking it away, I assume you have no plans to access the money before retirement.  Your wife can only get a tax rebate on pension contributions up to the level of her earnings, so let's assume she's earning 30k and paying into a work pension scheme already.

Assuming you have a comfortable level of cash available to cater for any planned & unplanned expenses, I would suggest your wife puts as much into her pension scheme as she can.  The rest can go in to a S&S ISA.  The Vanguard website guides to to finding a fund based on your attitude to risk...but I''m sure there are a number of other providers who provide something similar.