Some help please
Discussion
Hi,
A few weeks back my dad died, and now his work has paid out on a 'death in service' policy.
Its been split between me and my sister and brother. Now we were never rich and ive always just had about enough to survive, so what do i do with it? I only have one bank account and no savings.
Its not millions but it is a lot for me. I want to put some in an account for my boy of 3, that he cant have until hes 18 or so. Someones also said about an ISA but i dont know what they are?
A few weeks back my dad died, and now his work has paid out on a 'death in service' policy.
Its been split between me and my sister and brother. Now we were never rich and ive always just had about enough to survive, so what do i do with it? I only have one bank account and no savings.
Its not millions but it is a lot for me. I want to put some in an account for my boy of 3, that he cant have until hes 18 or so. Someones also said about an ISA but i dont know what they are?
Vipers said:
Go see your local bank manager for advice.
I think that in today's world a bank manager is the last person I would see!depending on how much it is, but ISA allowance is c. £20,000 so under that, drop it all in an ISA
above that - see a financial adviser - if you are wanting to potentially set up trusts etc. then you will need someone who specialises in that...
I'd suggest having a read of some sites like Money Saving Expert for reasonable background info and suggestions of decent accounts.
An ISA is basically a way of saving up to £20,000 per year without being taxed on the income, either as a Cash ISA, which pays interest like a normal bank account, or a Stocks and Shares ISA which will track the stock market and almost certainly earn more over a long period of time than a cash ISA.
There are specific accounts for children too, a quick google suggest 4.5% interest on childrens cash ISAs, which is probably about double what you can get as an adult.
ETA: Worth checking but I assume it is definitely a death in service payment you mean not a life insurance policy, as I believe you'd be taxed on the latter.
Sorry about your dad too.
An ISA is basically a way of saving up to £20,000 per year without being taxed on the income, either as a Cash ISA, which pays interest like a normal bank account, or a Stocks and Shares ISA which will track the stock market and almost certainly earn more over a long period of time than a cash ISA.
There are specific accounts for children too, a quick google suggest 4.5% interest on childrens cash ISAs, which is probably about double what you can get as an adult.
ETA: Worth checking but I assume it is definitely a death in service payment you mean not a life insurance policy, as I believe you'd be taxed on the latter.
Sorry about your dad too.
Edited by RizzoTheRat on Wednesday 25th April 14:37
t money in some branch somewhere.Rob197 said:
Thanks ill so some google-ing! Yes it was death in service as it came from Lotus and his life insurance is going to new partner.
As i said its not lots but 28k is a fortune to me
28k is a lot of money, easily squandered and so you are doing exactly the correct thing.As i said its not lots but 28k is a fortune to me
Despite my anti bank manager comment above.........Lloyds (who I bank with) have a Private Banking facility. You may well qualify for your banks equivalent? Those guys are pretty good and know their stuff AND are heavily regulated on the advice etc.
the ISA is a good bet though - usually until one maxes that allowance, I think the recommendation is that you fill that up.
The other thing you might want to consider if not wanting to spend it now, is pensions. I know they're boring but you get back tax you've already paid, so for a basic rate tax payer every £1000 you put in turns in to £1250 as the government pays in the tax you've already paid. It does mean you can't access it for a fair few years though.
Reddit's finance sub has a flowchart which has been posted here a couple of times, generally with pretty positive comments - it's here, and pretty useful for this kind of scenario:
https://i.imgur.com/BfHzwr9.png
https://i.imgur.com/BfHzwr9.png
The Selfish Gene said:
Despite my anti bank manager comment above.........Lloyds (who I bank with) have a Private Banking facility. You may well qualify for your banks equivalent? Those guys are pretty good and know their stuff AND are heavily regulated on the advice etc.
£28k in banking terms is very little (even though I agree it is a lot for the normal person!)it certainly won't get you through the door of the Private Banking facility...
at £28k I would max one ISA - wait until the next tax year - and add the remainder into another ISA - or if possible, split into more than one ISA this year... e.g. if for more than one child - I think the limit is per person...
akirk said:
The Selfish Gene said:
Despite my anti bank manager comment above.........Lloyds (who I bank with) have a Private Banking facility. You may well qualify for your banks equivalent? Those guys are pretty good and know their stuff AND are heavily regulated on the advice etc.
£28k in banking terms is very little (even though I agree it is a lot for the normal person!)it certainly won't get you through the door of the Private Banking facility...
at £28k I would max one ISA - wait until the next tax year - and add the remainder into another ISA - or if possible, split into more than one ISA this year... e.g. if for more than one child - I think the limit is per person...
ISA is definitely sound advice though - safe, easy to access etc
The Selfish Gene said:
akirk said:
The Selfish Gene said:
Despite my anti bank manager comment above.........Lloyds (who I bank with) have a Private Banking facility. You may well qualify for your banks equivalent? Those guys are pretty good and know their stuff AND are heavily regulated on the advice etc.
£28k in banking terms is very little (even though I agree it is a lot for the normal person!)it certainly won't get you through the door of the Private Banking facility...
at £28k I would max one ISA - wait until the next tax year - and add the remainder into another ISA - or if possible, split into more than one ISA this year... e.g. if for more than one child - I think the limit is per person...
ISA is definitely sound advice though - safe, easy to access etc
certainly nowhere near £28k one off...
banks will only advise on their own products, so someone independent will always be better...
Sorry to hear about your dad, I think with that sum just getting advice from here and anyone you know that you can trust and is savvy with these things is enough.
Isa is fine Premium bonds (google NS&I) also ok, I might be tempted to spread it into these two for the time being as sometimes you can be penalised for withdrawals on ISA's so can lose some of (what little) interest you actually get, premium bonds can be moved in/out.
Easy way is just see your current banks personal banker, get a savings account or just an isa (I'd get both) and transfer it there and then run your finances as they always were, knowing you can relax a bit with a buffer you never had before.
No easy way to grow the money significantly as if you aren't up to speed on this I can't see you are with slightly riskier, shares/funds/peer to peer lending etc, enjoy the peace of mind this should bring and like your dad nice to think you are thinking of the next generation too.
Isa is fine Premium bonds (google NS&I) also ok, I might be tempted to spread it into these two for the time being as sometimes you can be penalised for withdrawals on ISA's so can lose some of (what little) interest you actually get, premium bonds can be moved in/out.
Easy way is just see your current banks personal banker, get a savings account or just an isa (I'd get both) and transfer it there and then run your finances as they always were, knowing you can relax a bit with a buffer you never had before.
No easy way to grow the money significantly as if you aren't up to speed on this I can't see you are with slightly riskier, shares/funds/peer to peer lending etc, enjoy the peace of mind this should bring and like your dad nice to think you are thinking of the next generation too.
Rob197 said:
Hi,
A few weeks back my dad died, and now his work has paid out on a 'death in service' policy.
Its been split between me and my sister and brother. Now we were never rich and ive always just had about enough to survive, so what do i do with it? I only have one bank account and no savings.
Its not millions but it is a lot for me. I want to put some in an account for my boy of 3, that he cant have until hes 18 or so. Someones also said about an ISA but i dont know what they are?
Sorry to hear about your dad.A few weeks back my dad died, and now his work has paid out on a 'death in service' policy.
Its been split between me and my sister and brother. Now we were never rich and ive always just had about enough to survive, so what do i do with it? I only have one bank account and no savings.
Its not millions but it is a lot for me. I want to put some in an account for my boy of 3, that he cant have until hes 18 or so. Someones also said about an ISA but i dont know what they are?
Use a Junior ISA for your son. You want stocks and shares and to go quite adventurous and he has 15 years before he can access it at 18. You can put in £4,260 for him in this tax year.
An ISA would also be good for you, cash if you don't want to take risks and stocks and shares if you are going to use it as a long term investment (and draw tax free income in retirement from it, for example).
The balance you could keep in a deposit account as buffer/rainy day money that you don't fritter away, but know it is always there if something happens.
Another option instead of an ISA for you could be to make a mortgage overpayment with this money. This would help you pay off your mortgage quicker.
It obviously depends upon the interest rate you are paying on your mortgage and the tax free returns you might achieve from an ISA as to which would give you the overall highest returns, but paying a lump sum off the mortgages gives you a great degree of certainty.
Also, if you don't already have any, this experience shows you the difference having some form of life insurance can make to family (I know this was a death in service payout, but the principle is identical).
If you want to discuss further but not give personal detail here please feel free to PM me. I am not a financial adviser and have nothing to sell you!
All the best.
Me too, open two low cost (low fee) stocks and shares ISAs, one with you allowance and one with your kids (JISA). Then just forget about it for the next decade unless you can make a monthly top up contribution to each.
https://www.moneysavingexpert.com/savings/stocks-s...
It's really not rocket science don't be scared off by the jargon, a few hours or research could be worth £thousands over the next 10 years.
https://www.moneysavingexpert.com/savings/stocks-s...
It's really not rocket science don't be scared off by the jargon, a few hours or research could be worth £thousands over the next 10 years.
Some good ideas here but I would recommend getting some independent financial advice. There are a lot of options, and factors such as your situation, plans, risk appetite and so on are important to making the right choice. Despite best intentions, none of us here know those. eg. You don’t mention if you have debts or a mortgage. Paying some off may be the best thing to do. If not, then with that sum you have enough for a house deposit and few things are a better long term investment than property. It rather depends on your situation.
The government backed Money Advice Service has a website at moneyadviceservice.org.uk and you can also call them on 0800 138 7777.
The government backed Money Advice Service has a website at moneyadviceservice.org.uk and you can also call them on 0800 138 7777.
OP, you mention this is a fortune to you - this being the case how would you feel after investing it to see it drop by 10% in a week? I'd imagine there's something emotional attachment to the amount and seeing it drop might feel awful.
In your shoes, I would either try to use it to buy a property as a long term investment (whose value you won't see fluctuate day to day AND won't be able to easily step out of and crystalise the loss) or go for the highest return savings account you can find.
In your shoes, I would either try to use it to buy a property as a long term investment (whose value you won't see fluctuate day to day AND won't be able to easily step out of and crystalise the loss) or go for the highest return savings account you can find.
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