In our weekly series, readers can email any questions about their finances to be answered by our expert, Rosie Hooper. Rosie is a chartered financial planner at Quilter Cheviot and has worked in financial services for 25 years. If you have a question for her, email us at money@inews.co.uk.
Question: My husband is in his mid-80s and I’m in my mid-70s. We will shortly have around £50,000 of inheritance to invest, and have considered whether stocks and shares ISAs are a sensible investment at our age. We are both in reasonable health but both do have long-standing health issues. Is it sensible to invest at our stage of life or are there better options?
Answer: It is very common for people in their 70s and 80s to wonder whether investing still makes sense, especially when an inheritance is on the way and the question becomes what to do with a meaningful lump sum. Age and health inevitably play a part in that thinking, but they are not the whole story. What matters more is your timeframe, your goals and how comfortably you can leave the money to rise and fall in value.
Even in your mid‑80s, the timeframe can be longer than many people assume. Statistically, someone in that age bracket could still be planning over seven to ten years and that is long enough for a cautious or balanced investment to be considered. The fact that you are both in reasonable health, despite long‑standing issues, suggests this money is not something you expect to spend immediately, which strengthens the case for investment.
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A stocks and shares ISA is often a sensible home for part of a lump sum because any growth or income inside it is free from income tax and capital gains tax.
With around £50,000 to invest, the timing works in your favour too. You could use this year’s £20,000 allowance each, and then again once the new tax year begins in early April, allowing you to shelter the whole amount across two tax years.
This year, the Easter bank holiday falls awkwardly, which effectively shortens the practical window for making end of year ISA contributions.
Although the tax year officially ends on April 5, anyone wanting to avoid last minute delays might prefer to make contributions before the long Easter weekend begins on April 5. It is simply a point about avoiding cut‑off stress rather than any change in the rules but it catches people out every year when Easter falls on tax year-end.
It is also worth remembering what an ISA cannot do. While it is tax-free during your lifetime, it still forms part of your estate for inheritance tax. This is where your objectives really matter.
If the money is intended to support you during your lifetime, then the tax‑free growth and income an ISA offers can be valuable. But if the priority is passing money on and your estate could face inheritance tax, there may be little benefit in growing a pot tax-free only to have a larger sum assessed later.
That said, many households are well below the inheritance tax thresholds, especially when the residence nil‑rate band applies, and if that is the case for you, then this concern may be less relevant. In those circumstances, an ISA is often exactly the right home: simple, flexible and tax efficient during the years you are most likely to draw on it.
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The final question is risk. Investments can fall as well as rise, sometimes sharply, so you should only consider this route if you are comfortable leaving the money untouched for several years.
If you expect to need the full £50,000 soon, keeping it in cash would be safer. But if the intention is to provide for your needs gradually over time, then investing a portion in a cautious ISA could allow the money to work harder without taking excessive risk.
Ultimately, the decision is not just about age. It is about what this inheritance is meant to do for you, how long it needs to last and whether you want the simplicity and tax advantages of an ISA. With a clear plan and realistic expectations, investing can still be entirely appropriate well into later life.
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