Where to put my inheritance?

chappellroan

Hi!

Bit of background... I'm 27 and have a 3-year old daughter, I live in a rented house, and I'm just going into my final year of a MSc Healthcare course. I come from a fairly low-income family and I've been pretty bad with money over the years, but finally getting better at managing my monthly income and not spending beyond my means. I receive Student Finance, and an NHS Training Grant, which is topped up by Universal Credit, a little during the academic year and more so during the summer months. I haven't been in touch with my biological father since I was extremely young, learned that he died in 2020, and last year his father died without a will. Myself and my brother are entitled to 25% each of his estate (by default, as would go to our dad if he was alive).
Long story short, it's ready to be paid and I'm due just under £60k in the coming weeks.

Essentially wondering what on earth I should do with this amount of money? I will likely never receive such an amount again so I just want to be sensible. I'm hoping to buy a house over the next few years (can't get a mortgage while still a student), so I think that would exclude any very long-term options. But beyond maxxing out my LISA and doing the same with a Cash ISA, where's the best place to keep the rest? Of course I'm sure it's all subjective but interested in the 'what would you do's of more financially savvy people tbh!

Albermarle

Maxing out the LISA is a good idea for starters.

Normally it is recommended to keep money in cash savings, if you are likely to need it in the next 5 years.
For the longer term ( >10 years) it is normally better to invest the money, to most likely get a better return than for cash savings. The risks of investing diminish the longer you hold them.
For 5 to 10 years then a mixture of cash and medium risk investments.

When saving you can earn some interest tax free in normal/non ISA accounts, which normally pay a bit better rate of interest than ISA's, especially as you seem to have no taxable income at present.

Not sure if the £60K will affect your UC ?

dawnybabes

The 60k will totally cancel your UC claim until you go below 16k - you might be able to get a mortgage with a big deposit ? I’d try a broker and check. 

chappellroan

Yes dawnybabes said:

The 60k will totally cancel your UC claim until you go below 16k - you might be able to get a mortgage with a big deposit ? I’d try a broker and check. 

Yes I believe UC claims are closed as soon as savings are >£16k, that's fine! Was just trying to give a full picture. I'm sure I can use some of this should I need a top up over the next year before starting full-time work.

Eyeful

1. Any money you will need within the next 5 years, should be in a savings account protected by the FSCS up to £85,000.
https://www.fscs.org.uk/check/

2. Best savings interest rates:
https://moneyfactscompare.co.uk/savings-accounts/