29 Apr 2018

A question about : Inheritance Help

I'm about to inherit c 250,000. I don't want to complain, but this is making me very anxious as I've never had much money up to now.
Could I have some feedback on the list below to see if it makes sense, or if there's anything that looks like it's a daft idea.
I can't take risks with any money as I may be around for the next 30 years going on the age all my relatives get to, plus I still have dependents at home who may go to college. I will also be in receipt of state pension in a couple of months.

I'm divorced and owe my ex husband a 25% Charge on my property (I have no mortgage) by 2021 at the latest. I'm not sure how wise it is to wait until that time and get the interest, or whether it's wiser to pay him earlier whilst property prices are stagnant where I live.

Ј40,000 split between 2 Santander 123 accounts(one single and one joint with one of my adult children) @ 3%
Max HSBC Loyalty Cash ISA's for this tax year and then max again when new tax year starts. Total 41,500 at 1.75%
Max Premium Bonds Ј40,000
Harrods 2 year fixed rate 85,000 @2.25%
This leaves Ј43,500 possibly to go into an easy access savings account at 1.4%.

I don't need a lot of cash as easy access, but am reticent to tie a lot of it up for long as interest rates may change (hope springs eternal).

No proposals thanks title=Smile

Best answers:

  • What's your house worth?
    Consider deferring your state pension. That's "consider" as in 'do it!'
    If you really expect to live for 30 years, you should consider (customary meaning) putting some of your lucre into equities e.g. a Vanguard fund in an S&S ISA.
    What about contributing to a pension, this year, next year .....?
    Look into making a contribution to 3A NICs - what is your income tax position?
    P.S. You are probably about to receive some detailed advice on how to earn more interest by using current accounts. Pay heed! Cash isn't necessarily a lousy investment if you are able to earn a post-tax interest rate that exceeds your inflation rate.
  • Seren77 living on 8k and a withdrawl rate of 4% (10k) per year is a really good living to make I feel over the 30 years... Obviously you will have random expenses but you will also generate money from that 250k - say 2.5% average... So you should retire comfortably.... Well I think it's comfortable!
  • In your situation, I would pay off the ex now and have done with it.

    Re deferring state pension and living on some of the capital (rather than crystallised PP) and interest for a few years.
    https://www.express.co.uk/news/uk/549...nds-to-the-pot
    https://www.gov.uk/deferring-state-p...at-you-may-get
    See https://www.gov.uk/government/upload..._10__tax_9.pdf
    Consider contributing Ј2800 into a SIPP for a few years and get the tax relief added even though you are a non earner.
    https://www.hl.co.uk/pensions/sipp/how-much-can-i-invest
    You should be able to get 1x TSB Classic Plus, 1x Nationwide Flexdirect, 2x Tesco current accounts, 1X LLoyds Club account, 3 x BOS Vantage accounts as well as a Santander 123- so over Ј50,000
    earning interest between 3 and 5%, cycling round money as required to meet the monthly deposit requirements - read T&Cs carefully.
    Consider using your ISA allowance in a stocks and shares ISA - you might choose the Acc version of a Distribution Fund for a few years then switch to Inc.
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Savings & Investments
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