Another what to do with lump sum thread

[TheLurker]

Firstly, many thanks in advance for all the help, advice and thoughts. I know there have been a lot of similar threads in the past, but everyone's situation is different.

I'm about to receive a reasonable lump sum of cash (~£100k) from inheritance which I wasn't expecting. I therefore haven't budgeted / planned for it and am trying to work out what best to do with it.

A little about my situation; I'm comfortably off. Not by some standards on PH, but I own my own home (with mortgage) which I'm able to overpay each month, am able to go on holiday when I want and have a few expensive hobbies which I can afford. A few months salary in cash in savings accounts, and a reasonable amount in investments. I have a reasonable work pension, although may be worth investing more into. My concern with this is the inability to touch the money for a while and what could happen to it in this time as it is out of my control so to speak. Quite possibly irrational, and could be sorted by investing into a SIPP?

I'm in my early 30s, currently have ~60% mortgage with 2yrs fixed rate remaining at 1.9%APR. Will want to move at some point in the future, but realistically not for another 5-10yrs. I can overpay by just over 20k a year without penalty, which I currently do to around £8k per year.

My current thoughts are;

Overpay the max amount allowed this year on the mortgage. Perhaps not the most financially savvy move at 1.9%, but a safe one. 15k. Then pay what I would have overpaid each month into a pension.

5k for some additional toys. Not sure what yet, will probably just sit in a savings account, but not the worst thing to have some additional easy access money.

Which leaves 80k to invest. I've got some world trackers, and was thinking of adding to these. Seems a lot of eggs in one basket though, but again, could be me being irrational.

So the main question (I think - poke holes in the rest of my logic) is where / how would you invest the 80k?

[DonkeyApple]

Maybe a blend? Steer some over the next 24 months into the pension, steer an other amount into ISAs but still plan to have a block of cash at the point your mortgage debt rolls over so that you can get the best possible terms, then continue steering the balance into wrappers at a rate and split that you're personally comfortable with?

[VR99]

Op, I am in a similar-ish situation, this may or may not be useful.
Maxed out the wrappers this year ( LISA & S&SISA), already pushing hard on salary sac into pension so decided against putting more in for this tax year.
The rest is in Marcus and a few others ...I am now looking into PB's....not exactly setting the world alight but not much else out there. I have been considering a GIA to go alongside my S&SISA but not sure I can be bothered with the additional admin of tracking all my transactions for HMRC purposes but it's tempting....

[Burwood]

Lurker- I picked up on your concerns with a pension 'can't touch and outside your control'. It is under your control. Your provider will have default funds plus many others. You can switch to something suitable to your risk profile. Have you looked?

[beresd]

I am also looking at a lump sum to invest, but finding info is complicated! hence why I came on here...You know what they say about a fool and his money...

(Don't want to hijack the OP thread, just adding to the conversation - People in other threads have talked of good returns from Fundsmith and Smithson Investment. Long term with monthly / bi-annual returns? Or just sticking it in S&P500 (then, what is the best method to do this?)

[Jawls]

TheLurker said:

I have a reasonable work pension, although may be worth investing more into. My concern with this is the inability to touch the money for a while and what could happen to it in this time as it is out of my control so to speak. Quite possibly irrational, and could be sorted by investing into a SIPP?

On this specific point, obviously we don’t know the precise terms of your work pension, but there are also significant rules on ability to access for SIPPs. So, unless your work pension is one that you can’t take early without ruinous reductions, there’s not likely to be an advantage of a SIPP over your work pension with respect to access.

[toon10]

beresd said:

I am also looking at a lump sum to invest, but finding info is complicated! hence why I came on here...You know what they say about a fool and his money...

(Don't want to hijack the OP thread, just adding to the conversation - People in other threads have talked of good returns from Fundsmith and Smithson Investment. Long term with monthly / bi-annual returns? Or just sticking it in S&P500 (then, what is the best method to do this?)

Same as you, don't want to hijack this thread but I've a healthy emergency fund which leaves me with £60k to invest. Current thinking is to top up my pension contributions and stick £20k in an SS ISA and then another £20k in next years allowance. Keeping an eye on this thread to see what others suggest to the OP (and thus confirming my thoughts or making me think I'm an idiot and shouldn't be allowed near money.) Either way, good luck OP!

[xeny]

TheLurker said:

Which leaves 80k to invest. I've got some world trackers, and was thinking of adding to these. Seems a lot of eggs in one basket though, but again, could be me being irrational.

Pretty much the biggest broadest basket you can buy though.