Where would you put proceeds of a house sale

longwalks1

Topic started at work and been bouncing back and forth all week.  

If you had £500k from the sale of a property, and wasn’t going to buy another property, how/where would you save it?  If you was a non earner

medium attitude to risk, I wasn’t sure how you would distribute the money, as even if the sale finalised in March, that’s only £40k you could put into a stocks and shares ISA (if allowance for current year hadn’t been used)

genuinely interested as to what you would do

Baldytyke88

Premium Bonds: You can place up to £50,000 here for tax-free monthly prize draws instead of traditional interest. The Premium Bonds "interest rate" is a variable Annual Prize Fund Rate, currently 3.60% (as of late 2025)

ISAs: You can put £20,000 per tax year into a Stocks and Shares(global index trackers) ISA to shield all future gains and dividends from tax. Couples can shelter £40,000 combined.
Pensions (SIPP): You can contribute up to £60,000 (or 100% of your earnings) per year into a Self-Invested Personal Pension and receive significant tax relief.

Yorkie1

If the money is transferred to a bank account initially, its high balance will be covered for up to six months, so you don't need to immediately worry about getting it down to under £120K per banking institution.

If there is any debt, I would look to pay that off.

If there isn't much in savings, I would look to bolster that.

As a complete non-earner, you could earn up to £18570 (one way or another) from cash interest without paying tax on it, although a tax return would be needed if the amount was over £10K.

I would put £50K into premium bonds, where the returns are tax free and easily accessible (so a bit of a rainy day fund).

I would check whether my state pension forecast was as much as is possible. If some years are still needed, then I would see if buying some missing years would be possible.

As for investing, that is really for the longer term (minimum 5 years, probably nearer 10). If you are likely to need to draw upon the funds for specific purposes and/or at specific times in that period, best to keep in cash or similar within an ISA of some sort.

If interested in investing then it depends on attitude to risk.

Bear in mind that if the plan is to put it in a S&S ISA and then gradually draw down as cash in the future, then after April 2027 you can't move money from a S&S ISA to a cash ISA if you are under 65. It would have to be withdrawn as cash.

eskbanker

longwalks1 said:

Topic started at work and been bouncing back and forth all week.  

If you had £500k from the sale of a property, and wasn’t going to buy another property, how/where would you save it?  If you was a non earner

medium attitude to risk, I wasn’t sure how you would distribute the money, as even if the sale finalised in March, that’s only £40k you could put into a stocks and shares ISA (if allowance for current year hadn’t been used)

genuinely interested as to what you would do

When the money would be needed is very much a critical piece of data for deciding its allocation - does the reference to being a non-earner signify an expectation of having to live off the money and if so, for how long?  Would that be viable with expected/required lifestyle?  

itsthelittlethings

Some in a pension?

Albermarle

The answer will be different for different people. As said when the money might be needed is a critical point.
Then someone's age, any debts, pension provision, life plan etc will all affect the best way to deal with it.

Section62

Baldytyke88 said:

...
Pensions (SIPP): You can contribute up to £60,000 (or 100% of your earnings) per year into a Self-Invested Personal Pension and receive significant tax relief.

SIPP contributions would be limited to £3600 (gross) for a non-earner.

ppp123

I’d think in layers rather than one pot.

Short term: keep a decent chunk in high-interest savings and/or Premium Bonds for access and tax simplicity.
Medium term: drip-feed into ISAs each tax year to gradually shelter growth.
Long term: only invest what genuinely isn’t needed for many years, and match that to risk tolerance.

Timing of withdrawals and expected spending matters more than the headline £500k figure.

PropertyGuru_Wannabe

This is what I would do.

1.  Max £20k into stocks and shares isa with investments in a passive low cost global equity tracker fund.

2. Make sure your max state pension is achievable and top up missing years if possible.

3. Put £2880 into a SIPP personal pension for a total of £3600. Invest the money for long term.

4.  Open a high interest rate easy access savings account such as Chase 4.5% or Revolut 4.5% with £50k into those accounts. This should earn you £2k+ a year tax free income.

5.  Put the rest into a General trading account platform such as invest engine with no transaction fees. Invest the money into a passive low cost global equity etf. This should give you a drawdown of approximately £16k a year.

This is of course not taking into account the facts about you, your age, what skills you have, when do you want to retire, and your ultimate goals whether you want to start a family or have any family etc. Good Luck!

Albermarle

PropertyGuru_Wannabe said:

This is what I would do.

1.  Max £20k into stocks and shares isa with investments in a passive low cost global equity tracker fund.

2. Make sure your max state pension is achievable and top up missing years if possible.

3. Put £2880 into a SIPP personal pension for a total of £3600. Invest the money for long term.

4.  Open a high interest rate easy access savings account such as Chase 4.5% or Revolut 4.5% with £50k into those accounts. This should earn you £2k+ a year tax free income.

5.  Put the rest into a General trading account platform such as invest engine with no transaction fees. Invest the money into a passive low cost global equity etf. This should give you a drawdown of approximately £16k a year.

This is of course not taking into account the facts about you, your age, what skills you have, when do you want to retire, and your ultimate goals whether you want to start a family or have any family etc. Good Luck!

We also do not know anything about their risk tolerance, or knowledge of investing , which would be very important if planning to put £400K into a volatile  investment fund that within two weeks could have lost > £100K in a crash.