What to do with a large sum of money

[MrRee145]

I'm some assistance for my MIL, sadly her husband past away recently, she is going be getting what I would deem a large sum of money from various places. he had 26k stashed away in an account, with 100k+ coming from his Death in service benefit from work and we think around 200k from his life insurance. She has never been any good with money and is always getting herself in to trouble with debts etc. The MIL still works so has a regular income, while not large it is still there.

I have advised she settles all of her debts, loads up and ISA to its max, after that I'm a little out of my depth what else would you do? it needs to be potentially accessible if something bad happens, car breaks etc so not tied up for a long time but still working for her..

any thoughts or guidance appreciated.

[fat80b]

At that level and for the long term, I'd be looking to speak to a good financial adviser - how you find one is another matter. I'm not sure that the plan of instantly accessible makes sense for >£300K especially if she isn't that good with money.

That said, if instantly accessible is a requirement for the lot:

Premium bonds meet some of those requirements - you could put 50K in there for a non-guaranteed return with safety attached.

Other than that, pay off any debts (inc the mortgage) - Max out an ISA before the April deadline (even if you haven't got that cash yet) to get this year's allowance, then open another one using next year's allowance - that's ~30K. then spread the rest around the various financial institutions so that it's protected. The £1000 tax free interest amount for next year means that it's probably worth hunting for the best overall return. At that amount, you would have to spread it around at least 3 different institutions to keep it safe.

Bob

[MrRee145]

Bob,

thank you, I agree on not having it all instantly accessible however it would be handy to have some it available it required. there mortgage is already paid off so that doesn't need to be done.

[Ozzie Osmond]

fat80b said:

At that level and for the long term, I'd be looking to speak to a good financial adviser - how you find one is another matter. I'm not sure that the plan of instantly accessible makes sense for >£300K especially if she isn't that good with money.

Other than that, pay off any debts (inc the mortgage) -

Max out an ISA -

^^^ This, this and this. Especially the first one.

Financial advisers can't promise good performance but crucially should rule out the big mistakes which are easy to make. But don't "play safe" with all of it. That's the guaranteed route to lousy returns.

[Ginge R]

MrRee145 said:

I'm some assistance for my MIL, sadly her husband past away recently, she is going be getting what I would deem a large sum of money from various places. he had 26k stashed away in an account, with 100k+ coming from his Death in service benefit from work and we think around 200k from his life insurance. She has never been any good with money and is always getting herself in to trouble with debts etc. The MIL still works so has a regular income, while not large it is still there.

I have advised she settles all of her debts, loads up and ISA to its max, after that I'm a little out of my depth what else would you do? it needs to be potentially accessible if something bad happens, car breaks etc so not tied up for a long time but still working for her..

any thoughts or guidance appreciated.

I'd do nothing until she works out what life is going to look like after she gets over the shock. This isn't transactional planning, this is as much as anything, about how she sees life panning out, and using the money to support that.

This isn't about funds, wrappers (or any of that), this is about her having a clear idea of the directions she'll be taking. Then, she should be thinking about making the money allow her to achieve that.

My first instinct is to advise her to bank it safely, and to get over any grieving before she decides anything. That takes time, it isn't a race.

[audidoody]

Stick it all in NS&I for the time being until plans are drawn up. Only 1.1 per cent but totally secure.