Saving advice on £80,000 please

meggles88

Situation- I am about to receive some compensation to the tune of about £110,000 due to a misdiagnosis. I am not sure what to do with the money to maximise my interest earnings etc. It’s unlikely to be paid this side of the financial year. 

Married/ 35 years old

Mortgage- £270,000 left/ 30 year mortgage- currently overpaying mortgage £100 a month. Fixed until May 2026 at 4.8%

Employed- £53,934 per year

Wife £35,000 per year 

Current savings £14000- 3.79% interest

I pay into my work pension which is around 13% contribution my end at the moment. I am not keen to set up a private pension pot at this time. 

I will need access to some of the money for IVF which is unfortunately not chip- no children currently but trying! Will probably put £20,000 to one side for this.

We will be going on a holiday, putting about £10,000 aside for this. 

My emergency fund is the £14000 

This will leave me about £80,000 to decide what to do with. 

I am not sure whether both my wife and I should open cash ISAs and pop £20000 in each in the new year year. I am not clued up on stocks and shares but would be willing to read up a bit on it and invest. Maybe have one account at invest and the other as savings. 

Leave the emergency fund in the online savings account?

Purchase premium bonds £40,000?

Overpay mortgage to the maximum amount of £27,000 this year to reduce overall years/ monthly payment. Who knows where mortgage rates will be in a years time… or use interest earnings to keep topping it up… 

The other option is to see a financial advisor and gain their insight of course!!! Just thought I would bounce some ideas around you lovely people to see your thoughts?

Mark_d

I would put the £80k in to S&S ISAs.  With kids on the way you might need to access extra income (dividends) and capital growth before retirement. 

fisher66

I'd overpay the mortgage. A guaranteed return of 4.8%. Reduces your monthly outgoings for the total time you plan to have the mortgage and improves your cashflow.

You could mix and match though: 27K in mortgage 20k in ISA, 33K in Premium Bonds. Later on cash in some of the Premium Bonds and pay more off the mortgage.

xylophone

The money will arrive post 5/4/25?

You might consider s&s ISA for you and spouse - that will use £40,000.

Split the rest between the pair of you in high interest accounts (might be better to have more in the name of the lower rate tax payer) and

use  to overpay mortgage to the maximum - use balance as required?

El_Torro

Just on Premium Bonds, if you want some of your emergency fund there then go ahead. It shouldn’t be considered an investment though, more a place to hold cash. Over the long term it’s almost certain that investments will outperform Premium Bonds.

Beeblebr0x

Mark_d said:

I would put the £80k in to S&S ISAs.  With kids on the way you might need to access extra income (dividends) and capital growth before retirement. 

Wouldn't that be putting all one's eggs into one basket? 

Albermarle

A lot of it is about timing and peace of mind.
For saving for retirement - pension is best ( you can add more to your workplace pension)
For money likely needed in the longer term but before retirement - Stocks and Shares ISA ( so say between 8 and 25 years)
For money needed within 5 years - cash savings/PB's

With a mortgage deal at 4.8% there would also be some gain in probably overpaying it quicker.

Often the answer to these sort of questions, is do a bit of everything, and I think that probably applies here.

meggles88

Thanks all, think I’ll need to do a bit of research on stocks and shares ISA to get a good understanding. 

I am considering a lump sum off the mortgage to either reduce payments or reduce the years I have left! 

I can wack anything left into premium bonds and maybe look at regular savings to ensure I always have a bit of pocket money etc. 

Also thank you for pointing out to put more money in my partners accounts due to lower tax band I didn’t consider this! 

Dazed_and_C0nfused

meggles88 said:

Thanks all, think I’ll need to do a bit of research on stocks and shares ISA to get a good understanding. 

I am considering a lump sum off the mortgage to either reduce payments or reduce the years I have left! 

I can wack anything left into premium bonds and maybe look at regular savings to ensure I always have a bit of pocket money etc. 

Also thank you for pointing out to put more money in my partners accounts due to lower tax band I didn’t consider this! 

Just remember that is then their money.

If they spend it on a holiday, new car or put it all on the 2:30 at Cheltenham that's their choice.

Albermarle

meggles88 said:

Thanks all, think I’ll need to do a bit of research on stocks and shares ISA to get a good understanding. 

I am considering a lump sum off the mortgage to either reduce payments or reduce the years I have left! 

I can wack anything left into premium bonds and maybe look at regular savings to ensure I always have a bit of pocket money etc. 

Also thank you for pointing out to put more money in my partners accounts due to lower tax band I didn’t consider this! 

Reading through this forum can be quite informative about basic investing, and you will find suggested links in some threads to other useful sources.

ukbootlegs

Beeblebr0x said:

Mark_d said:

I would put the £80k in to S&S ISAs.  With kids on the way you might need to access extra income (dividends) and capital growth before retirement. 

Wouldn't that be putting all one's eggs into one basket? 

And you can’t…..

you can only do 20k a year