What to do with £125,000 ?

Advice please. I'm 56, unemployed, homeless and have no pension. However, as of today, I have 125,000 in the bank (from sale of a house).

My name is Mr Asim Bleawirngo. I am from Nigeria, and I think we can do business

too late, he's has not checked his account today.

It really depends on what you want to do next, and what sort of income you have (you don't say whether you're receiving any benefits, or any income from any other source).

Putting the whole £125k into anything probably isn't the best idea. If you spend it all, and then don't manage to get any income for the next few months you're going to be pretty stuffed.

I suspect you may have recently gone through some sort of life- changing event. (I apologise for making assumptions, but if somebody is homeless with £125k in the bank it's not that unusual for them to be either divorced or recently bereaved). If that's the case, you might want to be wary about making any permanent decisions about where you'll live for a while, just until the shock has worn off a bit.

It might not be completely impossible for you to get a small mortgage, depending on your income. The loan to value would be fine. If you want to go down that route, speak to a mortgage broker and see what they say.

Some other things you might want to think about:

• What will be the effect on any benefits you are claiming (might be able to claim) if you do (or do not) buy a house?

• Are you sure that buying a house is what you want to do? (If I lost my job and had £125k, I'd be travelling the world for a bit rather than settling down)

• Might you need to move elsewhere in the UK / the world at short notice if you managed to find a job?

• Is there anything else you might need capital for in the near future? A new car? Some sort of training course to help you get a job?

• Assuming you can't find a lodger (they're never guaranteed!) would you have enough money to live if you bought a house? If not, renting for a while and spending your capital until you get back on your feet might be a much better bet.

• Do you have any debts? It might be better to pay them off rather than spend money on a house.

• What do you think is going to happen to house prices? (If you think they're going to fall again, you might as well rent for a bit first)

• How are you living at the moment? Sleeping in hotels? On friends' sofas? (Making assumptions again, but with £125k in the bank I'm guessing not a park bench - but if you are, find yourself a cheap hotel pronto).

• If you've just stuck £125k into a bank account, your bank is likely to be interested in selling you something. Don't agree to whatever it is they try to flog you unless you are *absolutely* certain that you fully understand it and that you want it.

Thanks for the helpful reply. You are right about the life changing event. I sold my house 2 years ago and moved in with my mother who was elderly and in failing health. She died 8 months ago. Then my sibling (executor of the will) railroaded me out of the house so he could sell it. I wasn't ready to move and didn;t know where I wanted to go, so I bought a camper van and have been living in that for several months.

Yes, I could book into a hotel or lodgings, but I'll put that off as long as possible, because of the expense. What you said about waiting a full year before making any big decisions was exactly what a friend of mine recommended also. Perhaps I'll do that. Meanwhile, I am almost completely sure about where I'd like to live and am looking out for property coming on the market. It's only a small town and there isn;t a vast amount of choice. I think I'd feel safer with my money in property than in the bank where I can fritter it away. Yes, I can afford to run a house.

Don;t have any income. Haven't been claiming welfare because of my savings.

What you said about travelling is also appealing. It would probably cost me less to travel to a warm part of Europe and continue sleeping in the van, than it would to take lodgings in the UK. I wonder which European country is warm, has a coast, is cheap tp live in, not full of robbers, and isn;t heavily taxed (in case I decide to settle there).

Regards

JD

Thanks for the helpful reply. You are right about the life changing event. I sold my house 2 years ago and moved in with my mother who was elderly and in failing health. She died 8 months ago. Then my sibling (executor of the will) railroaded me out of the house so he could sell it. I wasn't ready to move and didn;t know where I wanted to go, so I bought a camper van and have been living in that for several months.

Yes, I could book into a hotel or lodgings, but I'll put that off as long as possible, because of the expense. What you said about waiting a full year before making any big decisions was exactly what a friend of mine recommended also. Perhaps I'll do that. Meanwhile, I am almost completely sure about where I'd like to live and am looking out for property coming on the market. It's only a small town and there isn;t a vast amount of choice. I think I'd feel safer with my money in property than in the bank where I can fritter it away. Yes, I can afford to run a house.

Don;t have any income. Haven't been claiming welfare because of my savings.

What you said about travelling is also appealing. It would probably cost me less to travel to a warm part of Europe and continue sleeping in the van, than it would to take lodgings in the UK. I wonder which European country is warm, has a coast, is cheap tp live in, not full of robbers, and isn;t heavily taxed (in case I decide to settle there)!

Regards

JD

Thanks for the helpful reply. You are right about the life changing event. I sold my house 2 years ago and moved in with my mother who was elderly and in failing health. She died 8 months ago. Then my sibling (executor of the will) railroaded me out of the house so he could sell it. I wasn't ready to move and didn;t know where I wanted to go, so I bought a camper van and have been living in that for several months.

Yes, I could book into a hotel or lodgings, but I'll put that off as long as possible, because of the expense. What you said about waiting a full year before making any big decisions was exactly what a friend of mine recommended also. Perhaps I'll do that. Meanwhile, I am almost completely sure about where I'd like to live and am looking out for property coming on the market. It's only a small town and there isn;t a vast amount of choice. I think I'd feel safer with my money in property than in the bank where I can fritter it away. Yes, I can afford to run a house.

Don;t have any income. Haven't been claiming welfare because of my savings.

What you said about travelling is also appealing. It would probably cost me less to travel to a warm part of Europe and continue sleeping in the van, than it would to take lodgings in the UK. I wonder which European country is warm, has a coast, is cheap tp live in, not full of robbers, and isn;t heavily taxed (in case I decide to settle there).

A lot of retired people with campervans seem to spend substantial parts of the winter abroad. Spain and Portugal are favourites. Some places appear to encourage it and people can overnight either for nothing or for a small fee.

Google for a motorhome forum and read up on it. You will get lots of advice. There are some pitfalls. One you may have already hit is that it is very difficult to get insurance for a vehicle if you don't also have a UK address.

Neb

A benefit of being in a permanent address for a while would be building up a credit history. That would make it easier to get a mortgage when you decide to go for a property.

You might want to consider that house prices may still have some way to fall. If you wait a year that three-bedroom house could be more affordable than it is now.

Have you thought of putting the majority of it in a fixed-rate bond that you can't get at for one or two years? That might reduce the temptation to fritter it away.

Good luck, I hope you get something sorted out.

Tony

As a carer living in your mothers house and providing free care, you had higher than average rights. I recall helping someone on uk.legal successfully challenge a will from one third to a half payout on that basis.

Might be worth contacting Citizens Advice and see if you can enter a claim for backdated Carers Allowance.

According to data from the Land Registry and National Statistics, the current house price is 5.0 times the average salary, compared with the average since 1930 of 3.4. Therefore a 30.6% fall is required merely to return to the long term trend, ignoring the markets tendency to overshoot in either direction. As ever, anyone using borrowed money to purchase above the long term trend is taking on significant risk. Historically, the property market has taken some time to resume steady growth after a period of deflation, in 1992 it took 3 years, 1980 2.5 years, 1977 1 year, 1970 1 year, 1955 1 year, 1948 1 year, 1934 4 years, enabling potential purchasers time to wait for a period of stability before committing to purchase rather than attempting to guess at a low point.

As an equity investor of two decades and a landlord for one, I think that Zopa offers the best risk vs. reward. Interest rates of ~7% after charges and defaults, however you have to loan your money out for 3/5 years, but during that period you are receiving capital repayments as well as interest every month.

I think you can invest your money in stock market.