Inheritance help

[Exitearly]

Hi there, we've come into some Inheritance (around 100k) and although we don't want to spend it yet, or put it into property etc. would ISA's be a better choice? I understand they're 20k tax free on savings but what about the rest? I'd rather keep it simple if possilbe, thanks.

[alscar]

Firstly should you decide to do nothing for up to 6 months other than put in a high interest bank or bs account you will be 100% covered up to that £100k from the compensation scheme.
I’m no expert but what to do with it depends on a number of things such as any plans in terms of capital expenditure and indeed what existing other savings etc you already have.
Keeping it simple might just be putting in said high interest account and then see how you feel / how your plans develop.

[ferret50]

Assuming 'we' means a couple,,,,

2 x £20k ISA, cash Isa's will earn around 4.5%, S and S ISA you may do better.

£50k into premium bonds, all winnings are tax free and you can get your capital back in a few days.

Then I'd ear mark the last £10k for a decent holiday.

[Hustle_]

ferret50 said:

S and S ISA you may do better

Usual caveats here, eyes wide open- it's been a stshow recently. Money at risk etc etc.

[Simpo Two]

ferret50 said:

£50k into premium bonds, all winnings are tax free and you can get your capital back in a few days.

This is why you're not an IFA Mr Ferret, you'd be off to FOS in a flash!

https://www.moneysavingexpert.com/savings/premium-...

Markets are down. They will go up when the tariffs get thrashed out, and that's where I'd be going.

[Exitearly]

Thanks for the replies, yes it's me and my partner. I can get on board with the separate ISA'S but the rest of it, well that's where I'd need help with.

[Bushi]

As others have said, if this is a large sum to you then play it safe for at least 6 -12 months.

Cash ISA, savings account with beat rates....maybe premium bonds... at least they are safe.

It might be a great time for s&s ISA...also might not be....

Let it settle down and then make plans during that time looking at extra pension in a sipp and other tax efficient investments based on needs.

No rush, get it locked away safe and at least earning.

[sugerbear]

You can only earn £1000 (or £500 if higher rate taxpayers) interest before sone of the interest is taxed outside an isa so that’s a max of £25,000 or 12,500 before the excess disappears at a rate of 20 or 40 assuming a rate if 4%

Assuming you only want to save it for six months £40k into two ISA’s and then 60k into two savings account makes sense if you are a lower rate tax payer.

You will only make £2000 in six months but it wont be impacted by the orange tariff monkey in the oval office

Personally, i would just buy a Mclaren 12C spyder and a cheapish boxster

[Steve H]

Exitearly said:

Thanks for the replies, yes it's me and my partner. I can get on board with the separate ISA'S but the rest of it, well that's where I'd need help with.

The answer is to just put it in the same investment but without the tax protection then next year add another lump in to the ISA when you get the next ISA allowance.

But you are concentrating on the wrong thing.

If you invest the £100k into stocks you could be 10-20% up a year from now (or, less likely, hopefully, 10-20% down).

Putting it into something fixed interest guarantees no losses but will probably only get around 4% growth.

So that’s the important decision because it’s a potential difference of +/- £15k whereas the tax you will be paying will most likely just be in the hundreds.

[Exitearly]

Thanks for the replies, perhaps I should have been clearer as I don't want maximum return just somewhere safe to put it. The ISA and premium bonds sound a good path.

[Steve H]

Average total returns on premium bonds are a little under 4% and that figure is skewed by the big wins so it would typically be a chunk lower than that for most.

Unless you fancy a dabble then boggo fixed interest would be the best risk free return, in or out of an ISA wrapper.

[Hoofy]

Hustle_ said:

Usual caveats here, eyes wide open- it's been a stshow recently. Money at risk etc etc.

Yeah, for some reason people talk about S&S ISA as if it's like a cash ISA but $$$$$ returns all tax-free. It's only tax-free if you know what you're doing. Otherwise, it's just loss. Which is also tax-free but not in the way that most people thought.

[Far Cough]

Exitearly said:

Thanks for the replies, perhaps I should have been clearer as I don't want maximum return just somewhere safe to put it. The ISA and premium bonds sound a good path.

£50k each into the premium bonds. Simple

[Phil.]

Steve H said:

Average total returns on premium bonds are a little under 4% and that figure is skewed by the big wins so it would typically be a chunk lower than that for most.

Unless you fancy a dabble then boggo fixed interest would be the best risk free return, in or out of an ISA wrapper.

Agreed. If you don’t want to invest then you can easily get 4+% on cash accounts. Have a look at Cynergy Bank. I’ve used them for years for my cash pot.

https://www.cynergybank.co.uk/personal/compare-acc...

Edited to add that you can use Cynergy for the full amount - £20k in two ISA’s and £60k in a joint cash account. Easy to set up online and all safe within the Financial Services Compensation Scheme. Sorted

Next April move another £20k from the cash account into the two ISA’s and you’re pretty close to tax free saving.

Edited by Phil. on Thursday 24th April 16:39