Unexpected inheritance - views ?

Daffodil1234

I am unexpectedly about to receive an inheritance which will be in the region of £120k.   This was not something I ever fed into my retirement planning.  Appreciating this is a "nice to have" problem in financial ways, though not in emotional terms re the bereavement.

I'm retired, not currently taking on paid work but I am doing volunteer work.  My spouse and I are living comfortably for us, on a combination of savings, pension income etc.  No debts / mortgage, house is well maintained as we focussed on that when first retired.  No kids or grandchildren.

I can of course pay the inheritance into various ISAs, savings accounts, GIAs, and a SIPP that I have.  I can't pay any more into my main pension pot as this was an occupational scheme that is now closed for further input as I'm not an employee.

I wondered if anyone has had a similar situation when unexpected money turned up, and whether there are any smart ideas about what people might do with it ?

Nearlyold

There is a myriad of things you could do with the money. In a way its only going to be "Unexpected Money" for a certain period of time, in our case an inheritance we received was not unexpected as such, however the amount was. We put the money in the best deposit account we could find as a stop gap to give us time to think about what we wanted to do with the money long term.

Marcon

I'm sorry about the bereavement. The sad nature of inheritances is that is the forerunner...

Be aware that you can only pay £2,880 into a pension scheme during any tax year in which you have no 'relevant earnings'. This is then topped up by the provider with basic rate tax relief, bringing the 'pot' up to £3,600. You can do that each tax year until you reach age 75.

Daffodil1234 said:

I wondered if anyone has had a similar situation when unexpected money turned up, and whether there are any smart ideas about what people might do with it ?

There will be others who have a 'similar situation' in terms of unexpected money, but that is likely to be where the similarities end. What is a 'smart idea' for someone else may be wholly unsuitable for you (eg 'buy a property in a cheap part of the country and let it out'). Maybe stick the cash into the highest interest savings account you can find while you ponder what to do with it? 

Spending some of the money is no bad option!

Albermarle

There is almost one thread every day on the topic of 'what shall I do with my inheritance' , but the answers are usually pretty specific to the circumstances.

The first thing you need to think about is what actually you would like the money to be used for, and when ?
If you just squirrel it away and you have no heirs, then it is sort of a waste.

Once you have an idea how you might like to spend it/give it away, and some timescales involved, then from that you can decide where best to save/invest.

One point is that as you are retired and presumably have no earned income, the max you can add to a SIPP is £2880, which will attract £720 tax relief, making £3600 gross per tax year.

Daffodil1234

Thanks for all who've given replies.  I was aware about the SIPP max per year but that's a useful point to bring out clearly.

I did also look back at the previous 5 - 6 pages of threads to see if others had mentioned a similar query, but I didn't see anything about inheritance in the titles of those threads. 

I can see of course this is a question which only I can answer, and that it will be specific to my situation - at present I'm just gathering ideas and so I'm still interested in hearing from anyone where something similar has happened to them.

Albermarle

Daffodil1234 said:

Thanks for all who've given replies.  I was aware about the SIPP max per year but that's a useful point to bring out clearly.

I did also look back at the previous 5 - 6 pages of threads to see if others had mentioned a similar query, but I didn't see anything about inheritance in the titles of those threads. 

I can see of course this is a question which only I can answer, and that it will be specific to my situation - at present I'm just gathering ideas and so I'm still interested in hearing from anyone where something similar has happened to them.

Most of the 'inheritance threads' are in the Savings & Investments forum. I just looked back and there is one very couple of days, but each are quite individual and often involve children for example. 

Cobbler_tone

We had this situation and bought a Charlie Mackesy original with some of it. We always wanted one and it is a nice item as a memory of the person who left the money. Not really an investment as we'd never plan to sell it.
The obvious answer is the best savings account you can find whilst you decide your plan of action, including potential ISA allowances, Premium Bonds etc if your motivation is to reduce any tax exposure.

tacpot12

Buying something really nice, and also valuable could be a good way to enjoy the money. A piece of very good art could appreciate in value as well as providing years of joy. 

sammyjammy

Holiday of a lifetime?  Try and enjoy it, you are obviously comfortable in financial terms, saving it indefinitely seems a waste in the circumstances.  What will happen to it when you die?

Cairnpapple

A friend of ours used an inheritance (much smaller than yours!) to buy lifetime membership of the National Trust and English Heritage, I thought it was a nice way to continue to remember the deceased. 

Daffodil1234

The ideas about original artwork are interesting - that hadn't actually occurred to me, not sure what !   Also good one to think about lifetime membership of anything I find really worthwhile.

I am also starting to list some charities that I particularly support, with the idea of supporting local / national / global in different ways.