How best to use my £273,500 inheritance?

Stubod

..I would certainly pay off the outstanding mortgage asap??

surreysaver

Stubod said:

..I would certainly pay off the outstanding mortgage asap??

Depends what interest rate the mortgage is, surely?

xylophone

What interest rate are you paying on the mortgage? Had you considered paying off the mortgage?


https://moneyfactscompare.co.uk/savings-accounts/

Are you and spouse using full ISA allowance for the current year?

Bostonerimus1

surreysaver said:

Stubod said:

..I would certainly pay off the outstanding mortgage asap??

Depends what interest rate the mortgage is, surely?

While current interest rate is a consideration there are many who feel that any debt is a financial hinderance limiting what you can do with your money. When you have paid off the mortgage you might feel able to take a bit more risk with your money etc. There is also the psychological benefit that many people experience; removing mortgage payments from your budget can be a big relief.

Bostonerimus1

Pay off all high interest debt, that might include a mortgage depending on its interest rate.

Put 6 months spending in the bank for emergencies, more if you have near term firm plans for the money. Use current and saving accounts appropriately.

Put money into your workplace pension in low cost multi-asset or index tracker funds. This is the best way to provide income for your retirement

Put money into an S&S ISA in low cost multi-asset or index tracker funds from companies like Vanguard, Fidelity, L&G etc. 

Put money into a general investment account in low cost multi-asset or index tracker funds from companies like Vanguard, Fidelity, L&G etc.

I would not buy any real estate beyond your own home without fully understanding that costs, potential pitfalls and responsibilities of being a landlord. I would not take on extra debt with the housing market where it is right now. Leave that risk to others.

leonard_455

I’d probably clear the mortgage first – it’s a guaranteed “return” and gives peace of mind. Then maybe split the rest so some’s in a safe easy-access savings account (even if the rate isn’t huge, it’s better than 0%), and some in a fixed-term or notice account for a bit more interest.

Yorkie1

I too would echo the comments about not getting into the rental market, despite your understandable desire to help your daughter out.

The rules around being a landlord are going to get more complex in the near future. If you don't charge your daughter full market rent, there will be issues around the payment of her UC as it risks being seen as a contrived tenancy. 

You will presumably have an idea how much a property for her would cost, but don't forget the extra stamp duty land tax (if in England) and the fact that you will not be able to quickly sell up to realise money for your own future move to a more expensive property.

BikingBud

Direct_talker said:

I’ve recently received an inheritance of £273,500, which is currently sitting in my current account earning zero interest.

My initial thought was to put it into an easy-access, high-interest account with monthly interest payouts. Unfortunately, such accounts don’t seem to exist. I’ve found a few online options (e.g. CHASE), but as they’re not high street names, I’m a bit nervous about them.

My situation:

·         I’m 55, married.

·         £47,000 outstanding on our mortgage.

·         House valued at around £600,000.

·         No other debts.

·         £50,000 in Premium Bonds.

·         £62,000 (current value) in inherited shares.

We’d like to keep the inheritance easily accessible, as we plan to move and may need to use some of it to top up for the type of property my husband wants (ideally with about 2 acres of land).

I’ve also thought about buying a property for my daughter to rent from us (using her Local Housing Allowance via Universal Credit), but I’m aware there are a lot of potential pitfalls with buy-to-let.

Given my family history — few living much beyond retirement age — I’m not keen to put it straight into my pension. I’d rather view our home as our retirement savings. Ideally, I’d like to invest the inheritance so that it generates a monthly income, which could allow me to cut down my working hours or even stop working altogether.

Any advice, ideas, or personal experiences would be much appreciated.

Why not pass straight onto your daughter? Give her a big boost to buy her own property and by doing it now as a deed of variation you should avoid any IHT downstream.

Cisco001

Stubod said:

..I would certainly pay off the outstanding mortgage asap??

Depends on if it has penalty if pay up early or the interest rate.

If there is penalty with paying off early in one lump sum, the usual alternative is do the overpayment every month until the mortgage term end and pay off in one go.

Cisco001

BikingBud said:

Direct_talker said:

I’ve recently received an inheritance of £273,500, which is currently sitting in my current account earning zero interest.

My initial thought was to put it into an easy-access, high-interest account with monthly interest payouts. Unfortunately, such accounts don’t seem to exist. I’ve found a few online options (e.g. CHASE), but as they’re not high street names, I’m a bit nervous about them.

My situation:

·         I’m 55, married.

·         £47,000 outstanding on our mortgage.

·         House valued at around £600,000.

·         No other debts.

·         £50,000 in Premium Bonds.

·         £62,000 (current value) in inherited shares.

We’d like to keep the inheritance easily accessible, as we plan to move and may need to use some of it to top up for the type of property my husband wants (ideally with about 2 acres of land).

I’ve also thought about buying a property for my daughter to rent from us (using her Local Housing Allowance via Universal Credit), but I’m aware there are a lot of potential pitfalls with buy-to-let.

Given my family history — few living much beyond retirement age — I’m not keen to put it straight into my pension. I’d rather view our home as our retirement savings. Ideally, I’d like to invest the inheritance so that it generates a monthly income, which could allow me to cut down my working hours or even stop working altogether.

Any advice, ideas, or personal experiences would be much appreciated.

Why not pass straight onto your daughter? Give her a big boost to buy her own property and by doing it now as a deed of variation you should avoid any IHT downstream.

Would that affect daughter's universal credit?