RECEIVED AN INHERITANCE, WINDFALL, OR PROCEEDS FROM A BUSINESS OR PROPERTY SALE? BUT WHAT NEXT?

Receiving a lump sum of money, whether from an inheritance, windfall, or proceeds from a business or property sale, can be exciting and overwhelming. Deciding where to invest this money is crucial, and with numerous options available, it can be challenging to determine the best course of action.

Knowing where to put a cash windfall can be difficult, particularly in times of market and economic uncertainty. We explore ways to invest your lump sum to help you make an informed decision and ensure you maximise your financial growth and security.

ASSESSING YOUR GOALS

The right decision for you will largely depend on what you want to do with your money and your needs and goals, which we can help you assess. In the meantime, here are some of the main options to consider.

CASH SAVINGS ACCOUNT

A cash savings account is a good choice if you want to use your lump sum to fund short-term goals – a holiday or new car, perhaps – or if you’re not quite sure what to do with it yet. By holding your lump sum in a cash savings account instead of investing it in the stock market, you won’t risk your money falling in value just before you need to access it.

If you don’t need your money for several months, you may wish to consider a notice or fixed-term savings account, as these may offer higher rates than easy-access savings accounts. It’s always worth shopping around to find the best rate on your savings, as a difference of only 0.5% could significantly impact large sums of money.

UK GOVERNMENT BONDS

UK government bonds (‘gilts’) could be an attractive choice if you want to use your windfall to fund a medium-term goal. Gilts are secure savings vehicles guaranteed by the government and listed on the London Stock Exchange.

If gilts are held inside an Individual Savings Account (ISA) or other tax-free wrapper, there is no Capital Gains or Income Tax to pay. If held outside of an ISA or similar, gilts are free from Capital Gains Tax when you profit from a trade, but any income you get is subject to Income Tax.

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THIS ARTICLE DOES NOT CONSTITUTE TAX, LEGAL OR FINANCIAL ADVICE AND SHOULD NOT BE RELIED UPON AS SUCH. TAX TREATMENT DEPENDS ON THE INDIVIDUAL CIRCUMSTANCES OF EACH CLIENT AND MAY BE SUBJECT TO CHANGE IN THE FUTURE. FOR GUIDANCE, SEEK PROFESSIONAL ADVICE.