Many people receive an inheritance later in life, typically when they’re 55- 65. Many are unsure of what to do with it, and if they don’t pass it on to the next generation, they leave it languishing in their bank account, generating little or no return. So what should you do?
Should you save, invest or pay off debts with your inheritance?
If you’re one of those people who have left their inheritance in cash you’re not alone. 35% of people deposit it in their bank account or in a cash Isa (13%). This is despite the negligible returns available that could see cash lose its real value over time as a result of inflation.
Another 31% spent the money, whilst 15% took a longer term view and invested it in the stock market. Others (18%) preferred to pay off debts. This could be a sensible option as the interest you pay on any outstanding debt is usually a lot higher than any interest you earn on a savings account.
Our advice is to seek advice
However before you commit yourself to spending, investing, giving up your job or giving it all away, it makes sense to discuss your options with a qualified financial adviser.
Working out how much you need, or whether you can afford to give some or all of it to loved ones - without damaging your own financial plans - can be a challenge.
However by speaking to a financial adviser, you’ll be able to put your inheritance to much better use than just leaving it in your bank account. What’s more, you’ll also be able to find out what options are available to you; and decide which are right for you – now and in the future.