Newspaper article The Evening Standard (London, England)

How Should I Play Safe with My Inheritance?; THIS IS MONEY

Newspaper article The Evening Standard (London, England)

How Should I Play Safe with My Inheritance?; THIS IS MONEY

Article excerpt

A CAREER in teaching needs to be a labour of love, particularly if you live and work in the capital. With London teachers' salaries starting at little more than u20,000, staying out of debt can be a struggle.

Business studies teacher Elizabeth Merrick, however, has coped reasonably well so far. She says: "I have a Lloyds TSB and Coop Bank credit card but I pay them off every month. I don't like being in debt."

One of the biggest challenges facing Londoners is getting a foothold on the property ladder, now that prices are so high. Fortunately, Elizabeth bought a two-bedroom terraced house in Hanworth fouranda-half years ago. She says: "I bought it for u87,000 and I think it's now worth more than u120,000. It would be much more difficult for me to afford that kind of property now, so I'm glad I bought my home when I did."

The problem

Elizabeth has just come into an inheritance but does not know what she should do with this money. She says: "I have inherited just over u30,000 in shares and u8,000 in cash. I'm quite a cautious investor and not really keen on the stock market, so I was thinking of putting the money in a C&G Tracker account. I was also wondering whether I should pay off some of my mortgage."

Elizabeth is thinking of remortgaging her house. When she bought the property, she took out a cashback mortgage with C&G and so is paying the standard variable rate. She says: "The redemption penalties on this mortgage only last for another six months so I am wondering whether I should switch to a better deal."

THE SOLUTION

Despite her reservations, Elizabeth should put some of her inheritance into the stock market, says Nikki Foster of Chase de Vere, an independent financial adviser. She adds: "Elizabeth has a reasonable amount of money on deposit but she could top that up a little. She should make sure she has made full use of this year's cash Isa allowance of u3,000 and perhaps keep some money aside for next year's Isa allowance, which she will be able to invest now.

"But once she has done that, Elizabeth should put some money into equities.

The stock market can be scary for cautious investors but makes sense in the long term. …

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