How to use Inheritance

jonniedey7t7 · 18 July at 3:34PM

I am Male, 25 years old, no dependents, unmarried. I have been fortunate to inherit £150,000 and am looking for advice on how best to deploy it.
I attended university (£70,000 outstanding debt) and have a good job currently earning £75,000 with strong career trajectory. I have taken out a mortgage recently to buy my first home (£300,000 oustanding approx.)
My question is how best to use the money ? I have no ambitions to massively expand my lifestyle as I already live very comfortably. I have no dependents as mentioned and do not plan to begin a family for a few years.
I am considering paying off mortgage, paying off student loan, investing the money (in a mixture of financial assets), commencing a rental property portfolio, or anything else.

Any advice much appreciated.

MX5huggy · 18 July at 3:43PM

I would up my pension contributions so I was not paying any 40% tax, hopefully you’re able to do this via Salary sacrifice then you’ll save the NI and Student Loan payments as well on the contributions.

Then use some of the cash to top up your income if you need to.

I would put £20k in a Stocks and Shares ISA (probably £4k in a Lifetime ISA).

I wouldn’t rush to pay off the mortgage or the student loan.

DE_612183 · 18 July at 3:45PM

I would (probably) put a largish sum into a pension and ply at least 1/4 off the mortgage and some into more accessible savings

Not sure about the student loan - I'd be tempted to leave that as it is being paid monthly via deductions.

I say probably because I'd be tempted to blow a big chunk on livestyle...

Brie · 18 July at 4:49PM

Not going to argue with the good advice already given. But.

If the money has come from someone significant to you why not do/buy something as a remembrance. Doesn't have to be a biggie but something that you can look at or think about in future years and remind of this someone. I bought a hebe bush from Aldi (ok, so I'm cheap) to plant in the garden after my dad died. I've put in another when we moved house. My MiL loved opera and Strauss in particular. So OH booked us to see Ariadne auf Naxos in Dresden.

singhini · 18 July at 9:33PM

I'm guessing your paying around £17,500 in Income Tax and £3,500 in NI and £4,000 off your student loan (assuming you dont salary sacrifice and are on either plan 1 or 2 or 4)

1 - Salary Sacrifice as much as you can / the scheme allows you to
2 - if your still paying Income T after salary sacrfce then pay into a SIPP to reclaim the outstanding Income Tax)
3 - look into Pension "carry forward" rules and if applicable to you do that (personally i don't understand it)
3 - £20,000 into ISA (consider doing this for multiple years)
4) - pay some off the mortgage
5 - consider one of the following:
a) a classic car
b) a pet
c) Learn to grow food -----> food security -----> too many people can't even grow a carrot -----> bonkers!
d) take up cookery / baking course ------> too many people killing themselves with ultra processed food
e) get a treadmill and put your name down to run a marathon
f) plant some fruit trees in your garden (in remembrance of the deceased)

Scrap those thoughts

1 - pay down debt
2 - invest for retirement
3 - create a savings account
4 - create an emergency fund
5 - charity
6 - plant some fruit trees in your garden (in remembrance of the deceased)

As "brie" mentioned, doing something in remembrance of the deceased is a nice thought (ive planted 4 trees in the last few years: apple, plum, pear, walnut)

Try not to waste it would be my advice

badmemory · 18 July at 10:56PM

Definitely try not to waste it as "singhini" says. A friend of my sister's got £125k & had a £125k mortgage. They basically threw the money away & then whinged about the £125k morgage. My sister was definitely not amused.