Endowment payout - what to do with it

[hab1966]

I am due to receive £30k from an endowment policy in April. This policy was to provide a lump sum towards my (interest only) mortgage which is due to finish in 2022.

I currently have the maximum premium bond allowance. I have just started up a cash ISA which i will dump £15k into this tax year, but the interest is paltry. I have a Stocks & Shares ISA from a few years ago with £10k in it.

I'm looking for (sensible) suggestions on how to invest this money with minimal risk but to make as much back as possible in the 6 years before the mortgage ends.

[nyt]

my first thought would be to pay down the mortgage. I'd guess that you are paying more on that than you'll get anywhere in risk-free interest.

Many interest-only mortgages allow a pay down of 10% annually. Paying down more may invoke an early repayment fee.

[megaphone]

That's what I'd do, lump sum off the mortgage, if allowed.

[Ozzie Osmond]

1. Pay down debt, including mortgage.

2. Give up those hopeless cash investments, including the premium bonds, and expand your S&S ISA.

(Yes, you should hold a sufficient cash reserve for emergencies.)

[hab1966]

The mortgage the policy is in conjunction with a BofE tracker and currently costs me <£100/month, ignoring endowment contributions.

I own another property outright and rent this out. I took a BTL mortgage out on this and this is a higher monthly repayment but that mortgage isnt due to finish until way after the BofE one.

The BTL mortgage would make more sense to pay off (£10k/year), but it means the money to clear the other mortgage is then gone. But i have other savings to cover this if required.

The plan was to sell the BTL property, just before the BofE tracker is about to finish, which would make us mortgage free. However, im thinking to keep it as long as we can as its a good earner with what appears to be long term tenants.

My wife also has a property and i wonder whether i should put the money into that as i think she only has £40k to pay off, on a repayment mortgage.

I just cant settle on a course of action, every time i think i've found one, i find something else. I've just started a pension for my (4yr) daughter along with a Junior ISA.

[hab1966]

Ozzie Osmond said:

1. Pay down debt, including mortgage.

2. Give up those hopeless cash investments, including the premium bonds, and expand your S&S ISA.

(Yes, you should hold a sufficient cash reserve for emergencies.)

The only debt I have is my mortgage, the same with my wife.

What do you class as 'hopeless cash investments'? The cash ISA and PBs?

I opened the cash ISA to allow me to open a similar one for my daughter with a higher rate (Halifax), i don't need to put the full £15k in though. Expanding the S&S ISA was one of my options, but i didnt want to risk it not performing and giving me back less than i started with.

Ive got £40k in a savings account for a rainy day.