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  • FIRST POST
    • erb66
    • By erb66 9th Jan 19, 9:29 PM
    • 8Posts
    • 1Thanks
    erb66
    Inheritance advice
    • #1
    • 9th Jan 19, 9:29 PM
    Inheritance advice 9th Jan 19 at 9:29 PM
    My first posting on this site so go easy on me please! 😊

    There are similar questions to mine elsewhere on the forum but my circumstances are a bit different to the examples I found so I thought I'd give it a go.

    My dear Mum sadly passed away last August and I am about to inherit approx 220k. My current personal/financial situation (its a sorry tale!) is as follows.

    I'm 52 and the wife is 50. Im self employed and earn about 35k net of expenses (but before tax). She earns approx 19k. She has virtually no pension savings and my pension arrangement is an Investment Platform with a decent sum in that I'm paying about 100 a month into at present (not enough I know, I'd like to increase this ideally when finances permit).

    Now for the gory bit. We rent our property (yes I know what you're thinking, AT YOUR AGE??). We also have no savings and joint credit card debt of about 40k. Long story!

    We live in Kent, my wife is Cornish and we want to use this life changing sum of money to move back down there for a fresh start, get debt/mortgage/rent free and be near to her parents again. This will obviously mean getting new jobs down there too either in advance of moving or once we're down there. So at this stage I've no idea what our income would be at that point but let's say for arguments sake, our joint income would be around 35-40k.

    So my thoughts are that with the inheritance we'd go along these lines:

    1 Pay off all Card debt
    2 Put 20k in a rainy day ISA
    3 Use the rest to cash buy a house outright. We've looked at houses in certain areas of Cornwall and can get the kind of place we'd be happy with for around 150k

    That's our thoughts anyway, be interested to hear input plus recommendations on where to put the money until we use it. From what I've seen on here already, a mix of filling an ISA and then splitting the rest across easy access savings accounts seems to be the way forward.

    OK, go!
Page 1
    • kidmugsy
    • By kidmugsy 9th Jan 19, 11:24 PM
    • 12,480 Posts
    • 8,846 Thanks
    kidmugsy
    • #2
    • 9th Jan 19, 11:24 PM
    • #2
    • 9th Jan 19, 11:24 PM
    I am about to inherit approx 220k.

    I'm 52 and the wife is 50. Im self employed and earn about 35k net of expenses (but before tax). She earns approx 19k. She has virtually no pension savings and my pension arrangement is an Investment Platform with a decent sum in that I'm paying about 100 a month into at present.

    We rent our property We also have no savings and joint credit card debt of about 40k.
    Originally posted by erb66

    So far so easy. Pay off the debt, leaving you 180k. Aim to buy a property so that in retirement you won't be paying rent. Then save like billy-oh to get yourselves some pension income to supplement your State Retirement Pensions. Only question: have you got official predictions of the size of your SRPs?

    ... 2 Put 20k in a rainy day ISA
    3 Use the rest to cash buy a house outright. We've looked at houses in certain areas of Cornwall and can get the kind of place we'd be happy with for around 150k
    Originally posted by erb66
    You'd get better interest outside an ISA than in, but that's a second order consideration: getting yourselves an emergency cash fund is exactly right.

    So the big worry is whether you can get yourselves jobs in Cornwall. As long as you start by renting in Cornwall until the jobs are fixed up, and then buy the house once you are happy in the jobs, it all seems pretty reasonable to me.

    Remember that when the money arrives you want immediately to hold it across more than one account: only 85k per person is protected per bank - or, strictly, per banking licence. Or keep it at ns&i: they have a Treasury guarantee.

    In your shoes I think I'd open my new bank/building society/ns&i accounts while I still have a permanent address in Kent.

    Good luck with it all.
    Free the dunston one next time too.
    • eskbanker
    • By eskbanker 10th Jan 19, 12:08 AM
    • 9,779 Posts
    • 11,635 Thanks
    eskbanker
    • #3
    • 10th Jan 19, 12:08 AM
    • #3
    • 10th Jan 19, 12:08 AM
    Remember that when the money arrives you want immediately to hold it across more than one account: only 85k per person is protected per bank - or, strictly, per banking licence.
    Originally posted by kidmugsy
    Inheritance qualifies under the FSCS's temporary high balance arrangement for up to six months so there's no rush to spread it for protection reasons (although doing so for interest purposes is a different story):
    FSCS protects temporary high balances in your bank account of up to 1million for up to six months.

    Certain life events could have caused a temporary high balance in your bank account, including:

    [...]
    • Inheritance.
    • Proceeds of a deceased's estate held by their personal representative.
    • badger09
    • By badger09 10th Jan 19, 1:05 PM
    • 6,704 Posts
    • 6,242 Thanks
    badger09
    • #4
    • 10th Jan 19, 1:05 PM
    • #4
    • 10th Jan 19, 1:05 PM
    Pretty much agree with kidmugsy's suggestions. Don't buy in Cornwall until you know you can find work there. As you're self employed, can you work anywhere?

    If OP &/or his wife have never owned a property, HTB ISA(s) would be a good idea though.
    • kidmugsy
    • By kidmugsy 10th Jan 19, 2:04 PM
    • 12,480 Posts
    • 8,846 Thanks
    kidmugsy
    • #5
    • 10th Jan 19, 2:04 PM
    • #5
    • 10th Jan 19, 2:04 PM
    Inheritance qualifies under the FSCS's temporary high balance arrangement for up to six months so there's no rush to spread it for protection reasons (although doing so for interest purposes is a different story):
    Originally posted by eskbanker
    A most useful reminder, but ... I'd hate to have to wrestle with a bank/FSCS about an inheritance exception, and I'd hate to risk missing the six month deadline. Indeed, I'd hate to have all my moolah tied up with the FSCS at all, so for that reason alone I'd spread the money a bit, or use ns&i.
    Free the dunston one next time too.
    • erb66
    • By erb66 11th Jan 19, 1:57 PM
    • 8 Posts
    • 1 Thanks
    erb66
    • #6
    • 11th Jan 19, 1:57 PM
    • #6
    • 11th Jan 19, 1:57 PM
    Thank you for your replies, much appreciated. To address the various points raised:

    1. Understand the advice that ISA would be a lower interest rate but given its tax free would that not offset that?

    2. I'm self employed but I'm a London cabbie and that's not a job I can continue with in Cornwall and not the kind of job I'd look to pursue in a different guise down there either. Had enough of that now!

    3. A couple of you advised me to rent before buying somewhere until I find a job. Would that not be more expensive though given we'd be paying rent opposed to paying nothing if we buy a house outright? Sorry if I'm missing something here.

    Thanks again and just out of interest is there a way of getting a notification from the forum when you get a reply to a posting, I can't find it anywhere?
    • erb66
    • By erb66 11th Jan 19, 2:02 PM
    • 8 Posts
    • 1 Thanks
    erb66
    • #7
    • 11th Jan 19, 2:02 PM
    • #7
    • 11th Jan 19, 2:02 PM
    Apologies, ignore that last question, I've found the notification settings now!
    • eskbanker
    • By eskbanker 11th Jan 19, 2:41 PM
    • 9,779 Posts
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    eskbanker
    • #8
    • 11th Jan 19, 2:41 PM
    • #8
    • 11th Jan 19, 2:41 PM
    1. Understand the advice that ISA would be a lower interest rate but given its tax free would that not offset that?
    Originally posted by erb66
    No, not any more - most people don't pay tax on non-ISA savings because of the personal savings allowance introduced in 2016, which means that the first 1,000 of savings interest income (for basic rate taxpayers) doesn't attract tax. In the current low-rate climate, your 20K won't come anywhere near to earning 1,000 in annual interest for the foreseeable future....

    So, compare accounts at a gross interest rate level, at https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/
    • erb66
    • By erb66 11th Jan 19, 2:51 PM
    • 8 Posts
    • 1 Thanks
    erb66
    • #9
    • 11th Jan 19, 2:51 PM
    • #9
    • 11th Jan 19, 2:51 PM
    I see, thank you for that, very useful advice 👍
    • Herbalus
    • By Herbalus 11th Jan 19, 2:52 PM
    • 2,290 Posts
    • 1,964 Thanks
    Herbalus
    The background to renting before buying is presumably making sure you can get work and like the area before buying. Otherwise you’d have to sell again and transaction costs are high.

    It minimises some risk, but if your wife knows the area and you move close to her parents, you may be happy with the risk of not like it.
    • erb66
    • By erb66 11th Jan 19, 2:56 PM
    • 8 Posts
    • 1 Thanks
    erb66
    The background to renting before buying is presumably making sure you can get work and like the area before buying. Otherwise you’d have to sell again and transaction costs are high.

    It minimises some risk, but if your wife knows the area and you move close to her parents, you may be happy with the risk of not like it.
    OK that makes sense. We are both very acquainted with the area, particularly the wife, and we are aware of its good and bad! So I'd like to think that risk would be extremely low. Appreciate your input though ��
    • Voyager2002
    • By Voyager2002 11th Jan 19, 3:16 PM
    • 12,862 Posts
    • 8,816 Thanks
    Voyager2002
    Hope this does not confuse things, but there is very generous tax relief on money that you put into a personal pension pot (SIPP or Stakeholder pension). That should be something else for you to consider.
    • ColdIron
    • By ColdIron 11th Jan 19, 3:45 PM
    • 5,012 Posts
    • 6,723 Thanks
    ColdIron
    Thanks again and just out of interest is there a way of getting a notification from the forum when you get a reply to a posting, I can't find it anywhere?
    Originally posted by erb66
    Yes, click User CP at the top of the main board then ...
    Edit Options in the Settings & Options section, then Default Thread Subscription Mode in the Messaging & Notification section
    There you can select Instant email notification from the drop down list

    That's when using the Green skin anyway
    • kidmugsy
    • By kidmugsy 11th Jan 19, 4:52 PM
    • 12,480 Posts
    • 8,846 Thanks
    kidmugsy
    It minimises some risk
    Originally posted by Herbalus
    It minimises the major risks of failing to find a job or hating the jobs you've found.
    Free the dunston one next time too.
    • atush
    • By atush 11th Jan 19, 6:19 PM
    • 17,553 Posts
    • 11,063 Thanks
    atush
    What does your wife do? How easy will it be for her to get a job? Could your living eexpenses be low enough thst she could cover them w/o a mtg or rent to pay?

    She could go on ahead of you, move in with her parents and get job hunting. Looking at houses in her spare time. Then once she's working and you find a house you like, pull the plug. That would leave you only paying rent for a short period? or even no period if she/you find a house around the same time shen gets a job?
    • erb66
    • By erb66 13th Jan 19, 9:45 AM
    • 8 Posts
    • 1 Thanks
    erb66
    What does your wife do? How easy will it be for her to get a job? Could your living eexpenses be low enough thst she could cover them w/o a mtg or rent to pay?

    She could go on ahead of you, move in with her parents and get job hunting. Looking at houses in her spare time. Then once she's working and you find a house you like, pull the plug. That would leave you only paying rent for a short period? or even no period if she/you find a house around the same time shen gets a job?
    Originally posted by atush

    In many respects, given my particular circumstances, ie age, out of date skillsets, it will probably be easier for my wife to find a job as her skills/experience are still current. However, moving in with her parents is sadly not an option for reasons I won't go into here, although I appreciate the suggestion as, on paper, it could be the answer. As you alluded, given our outgoings will be relatively low, we wouldn't need to earn particularly high salaries, at least to start with while we get established, so I'd be open to pretty much anything!
    • AnotherJoe
    • By AnotherJoe 13th Jan 19, 10:17 AM
    • 12,875 Posts
    • 15,123 Thanks
    AnotherJoe
    I agree with everyone else, jobs is the issue and you do need to be relatively close to them given roads there so don't buy unless you either have got jobs fixed up or are very confident about getting them.
    If you time your move down there right you might be able to get a deal on holiday accommodation out of season instead of a full blown 12 month rental ?
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • atush
    • By atush 13th Jan 19, 5:11 PM
    • 17,553 Posts
    • 11,063 Thanks
    atush
    In many respects, given my particular circumstances, ie age, out of date skillsets, it will probably be easier for my wife to find a job as her skills/experience are still current. However, moving in with her parents is sadly not an option for reasons I won't go into here, although I appreciate the suggestion as, on paper, it could be the answer. As you alluded, given our outgoings will be relatively low, we wouldn't need to earn particularly high salaries, at least to start with while we get established, so I'd be open to pretty much anything!
    Originally posted by erb66
    I realised both of you moving in could be a trial, but thought they could fit her in on a limited time basis. Whatever.
    • atush
    • By atush 13th Jan 19, 5:13 PM
    • 17,553 Posts
    • 11,063 Thanks
    atush
    I agree with everyone else, jobs is the issue and you do need to be relatively close to them given roads there so don't buy unless you either have got jobs fixed up or are very confident about getting them.
    If you time your move down there right you might be able to get a deal on holiday accommodation out of season instead of a full blown 12 month rental ?
    Originally posted by AnotherJoe
    This was my htought for pulling the plug sooner. Holiday lets are empty this time of year and you might find a deal. But have to be out before June
    • erb66
    • By erb66 13th Jan 19, 5:21 PM
    • 8 Posts
    • 1 Thanks
    erb66
    This was my htought for pulling the plug sooner. Holiday lets are empty this time of year and you might find a deal. But have to be out before June
    Originally posted by atush
    Yes, this could certainly be an option 👍
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