Im getting £250,000 Inheritance ,,, benefits will stop .. Best way to invest it ?

Bostonerimus1

Lots of people are inheriting significant amounts... but the basics remain the same.

Do a budget so you can see where to save and how much you need, although people on low incomes and benefits are usually pretty good at budgeting by necessity.

I'd put 6 months spending in the bank or maybe a cash ISA for emergencies.

Then pay off any high interest debt you have.

When that is done your priority should be tax advantages accounts, ie workplace pensions, ISAs and SIPPs. if you don't have a workplace pension open a SIPP and your full ISA allowance. To understand how you should invest your money inside your pensions, ISAs etc educate yourself about investment funds...for drawdown over what might be 30 years I'd probably use a balanced fund or a target retirement fund that started with a high equity allocation. I would try to avoid tying up money in houses or rentals.

moneytree999

Bostonerimus1 said:

Lots of people are inheriting significant amounts... but the basics remain the same.

Do a budget so you can see where to save and how much you need, although people on low incomes and benefits are usually pretty good at budgeting by necessity.

I'd put 6 months spending in the bank or maybe a cash ISA for emergencies.

Then pay off any high interest debt you have.

When that is done your priority should be tax advantages accounts, ie workplace pensions, ISAs and SIPPs. if you don't have a workplace pension open a SIPP and your full ISA allowance. To understand how you should invest your money inside your pensions, ISAs etc educate yourself about investment funds...for drawdown over what might be 30 years I'd probably use a balanced fund or a target retirement fund that started with a high equity allocation. I would try to avoid tying up money in houses or rentals.

I have NO Debts ... No Private Pension ( Only State Pension, when i reach 67 in 6 years ) I look into your advice, Thanks

RAS

moneytree999 said:

Keep_pedalling said:

Could you buy your own place with that? 

Not a Bad idea,But it wouldnt buy a Phone box round my area ! + Ill have no money to pay Bills, and Eat !!

I believe that purchasing your own home is permitted. 

Do you absolutely have to live in the area where you are currently? As elsewhere £250k would set you up nicely. With scope for a second bedroom and possible income?

Bostonerimus1

moneytree999 said:

Bostonerimus1 said:

Lots of people are inheriting significant amounts... but the basics remain the same.

Do a budget so you can see where to save and how much you need, although people on low incomes and benefits are usually pretty good at budgeting by necessity.

I'd put 6 months spending in the bank or maybe a cash ISA for emergencies.

Then pay off any high interest debt you have.

When that is done your priority should be tax advantages accounts, ie workplace pensions, ISAs and SIPPs. if you don't have a workplace pension open a SIPP and your full ISA allowance. To understand how you should invest your money inside your pensions, ISAs etc educate yourself about investment funds...for drawdown over what might be 30 years I'd probably use a balanced fund or a target retirement fund that started with a high equity allocation. I would try to avoid tying up money in houses or rentals.

I have NO Debts ... No Private Pension ( Only State Pension, when i reach 67 in 6 years ) I look into your advice, Thanks

Consider annuities and investment bond ladders if you want guaranteed income.

Grumpy_chap

aroominyork said:

If you are serious that you would prefer not to receive the money, I think you could authorise the executors to sign a deed of variation to give your inheritance to one of the other beneficiaries or to charity. I don't know however whether that would affect your benefits, if HMRC somehow became aware of it. 

That would be Deprivation of Assets.

friolento

Would Shared Ownership be an option for you to buy a place to live in? 

 https://www.gov.uk/shared-ownership-scheme/who-can-applyShared ownership homes: buying, improving and selling: Who can apply - GOV.UK

Eco_Miser

How did you arrive at that  £25,000 a year to live figure?  I live on much less than that.

moneytree999

Eco_Miser said:

How did you arrive at that  £25,000 a year to live figure?  I live on much less than that.

Rent £300 +  Council Tax, Gas / Electric, Service Charge ..... Bills + Food etc etc...I might need even MORE than £25,000 pa !

masonic

moneytree999 said:

Eco_Miser said:

How did you arrive at that  £25,000 a year to live figure?  I live on much less than that.

Rent £300 +  Council Tax, Gas / Electric, Service Charge ..... Bills + Food etc etc...I might need even MORE than £25,000 pa !

With rent at £300pm, I think your earlier estimate of £15k looks more reasonable. That's almost £1000pm for bills, food etc.

Given that you are content to fall back on benefits if you need to, to complement the low risk gilt / income strategy discussed earlier, you could go for the high risk strategy. This is to keep back a couple of years spending (~£30k) in cash and invest the rest in a low cost global equity index fund. This has a reasonable chance (>50%) of growing by more than 8% per year. Even if you need to draw down 6.5% per year, then there's a pretty good chance of it lasting longer than you do, perhaps even being worth more when you die if you are lucky. If you are unlucky, then the money will run down to the level where you can claim pension credit to top your income up to about £12kpa + housing benefit + council tax reduction etc, which doesn't look like it will be a problem for you and would allow you to continue at the same standard of living. Even in that fairly unlikely scenario, you'll probably be at an age where you'll be spending less.

kimwp

moneytree999 said:

Eco_Miser said:

How did you arrive at that  £25,000 a year to live figure?  I live on much less than that.

Rent £300 +  Council Tax, Gas / Electric, Service Charge ..... Bills + Food etc etc...I might need even MORE than £25,000 pa !

I (with a cat, car and house) live comfortably on £12k a year not including mortgage/rent/service charge. Organic food, fancy cat food. There are couples on this board living happily on about the same.