Inherited £300k. No pension or investments. What split would you do?
37F, £330k mortgage (4.18% tracker), no kids.
I’m a recent and quite sudden HENRY on the lower end and I want to start securing my future, and am now very grateful to have a £300k inheritance to decide what to do with. I’m a creative freelancer so whilst I’m established, it’s not the most secure pathway and I don’t want to lock everything away in property and pension. I have a good appetite for risk and do want to maximise this opportunity. Should I:
Pay £100k off mortgage, £100k into a pension, £100k into a more high risk GIA, whilst maxing out a s&s ISA yearly out of my take-home and additionally overpaying mortgage where I can
or
£150k into a pension and £150k into a more high risk GIA, keeping the mortgage as is? Plus max out my s&s ISA and overpay the mortgage out of my take-home as well where I can. I can afford my mortgage fine but it’s a decent chunk of my monthly take-home and reducing it is somewhat appealing from a security sense (probably as much psychological as practical). I plan to start paying into my pension regularly from now on top of this whatever happens.
One factor is that I expect an inheritance from my dad in my 50s or so that would probably be a comfortable but not lavish amount to retire on. However, I don’t want to bet on this too heavily as you never know what could happen (what if he has to go into care? etc). But it’s maybe a factor in not just sticking the whole £300k in a sensible pension right now and using some of it to grow more.
Any thoughts? Should I focus on maximising investments right now so they have maximum time to compound or would it be sensible to also knock a chunk off my mortgage and spread everything evenly? Some other plan? £200k high risk GIA £100k more stable pension and keep the mortgage, and up my pension contributions out of my take-home?
Or basically pay off my whole mortgage (no overpayment penalties), save the interest and start investments from scratch with almost no financial burdens and max flexibility in my work? This is new territory for me so the options are spinning around in my head a bit. Thanks in advance!