Smart ways to save and invest your newfound wealth

There’s no feeling quite like receiving a large and unexpected sum of money. Known as a financial windfall, an unexpected influx of money can come from several sources, such as a bonus, an inheritance, or a lawsuit settlement. Receiving a windfall of money can be exciting and even life-changing. But it can also come with challenges.

Whatever your circumstances, our guide answers key questions about how to handle a financial windfall.

First things first

Take a deep breath. A sudden financial windfall can leave you feeling both excited for the future, but also overwhelmed. Before you rush into making any decisions or impulse-buying, take some time to process the situation and figure out your next steps.

You might consider putting some of the money into a high-interest savings account or invest to make a profit from your cash.

When in doubt, seek professional financial advice advice to decide how best to navigate your newfound wealth.

Establish a goal

Think of your newfound wealth as a long-term investment that can provide you with a secure financial future. After all, how you plan to save your money is just as important as how or where you’re looking to spend it. A good place to start is to decide your goals.

If you’re meeting with a Financial Adviser, you can work with them to decide what you’d like to achieve with your windfall. Whether you want to put the money towards a house deposit or invest in your pension, make a list of your options and order them by importance.

Some of these financial goals may include:

  • Paying off high-interest debts, such as your credit card or personal loan balances
  • Paying off part of your mortgage or becoming mortgage-free
  • Starting a business
  • Building an emergency fund
  • Personal development, such as further education
  • Saving for a house deposit
  • Contributing towards your retirement fund

Once you’ve chosen and prioritised your goals, you can assign them a timeline and cost.

Invest in a diverse portfolio

If you’re looking to invest in your future, a financial windfall could give you the opportunity to invest in a diversified portfolio. If you’re new to investing, you have a handful of options to consider.

1. Cash

Cash is often an overlooked part of building a portfolio, but it has an important role to play. Cash is low on risk, but it doesn’t have to be low on returns.

During opportune times, when the base rate is higher than the rate of inflation, you can earn greater returns on your cash savings.

Having funds in a savings account can also provide peace of mind. For example, in the case of an unexpected event, such as a medical emergency, it’s useful to have cash readily available. Cash is typically held in instant access accounts, giving you the flexibility to withdraw it quickly should you need to, or fixed-term accounts where you lock your money away for a higher interest rate (in most cases).

Whilst you’re deciding where best to invest your windfall, it’s worth considering putting it in a high-interest savings account to grow and protect your money.

Explore: the ultimate guide to growing and safeguarding your savings.

2. Stocks & shares ISA

Also known as an investment ISA, a stocks & shares ISA is a tax-free way to invest in shares and investment funds, up to an annual limit (the current annual limit is £20,000).

You can invest in:

  • Funds – shares or bonds from various companies in one investment
  • Bonds – a loan issued by a corporation or a government
  • Shares in individual companies or organisations

With a stocks & shares ISA, you don’t pay tax on dividends, capital gains or income you receive from your investments held in the account (up to the allowance).


In simple terms, a share is a divided-up unit of a company’s value. For example, if a company is worth £200 million and there are 50 million shares, each share is worth £4. Those shares can increase and decrease in value over time.

4. A stock market

A stock market is where buyers and sellers meet to sell shares from companies listed on a stock exchange. In return for your money, a business offers you a share in its future, so you own a very small proportion of the company and become a ‘shareholder’. You can then choose to trade this piece of the company with anyone who wants to buy it from you.

Investing can offer high returns on your money and give you the chance to achieve long-term financial goals, such as contributing to your retirement fund or buying a house.

But there are risks associated with investing, which you may want to consider. Making money on your investments isn’t guaranteed. Ensuring you have a diversified portfolio can help. It means you have a range of asset types and investment options, which can limit your risk and help you achieve higher returns.

Consider your retirement accounts

While retirement may seem a long way off for some, the sooner you start building wealth for retirement through saving and investing, the more time your money has to grow in value.

If you have a pension scheme in place, either privately or with work, you could top it up by paying extra contributions. You could also invest some money in a savings account or ISA, keeping the funds aside for retirement.

One rule of thumb is to aim to have a pension pot worth ten times your annual salary by the time you retire.

Settle any high-interest debts

Is one of your goals to be mortgage-free? Or do you want to wipe your loan or credit card debt? If you’re looking to make the most of your newfound wealth, paying off your debts may save you a significant amount in the long-term, especially if you’re paying interest on what you’re borrowing.

Clearing your balance can save you money on interest and improve your credit score, giving you a fresh start with your finances. Remember to watch out for any early repayment charges, which can be pricier than you’d expect. Have a clear budget in mind of how much debt you’re looking to repay, so you don’t end up compromising on your other financial goals.

Ask the professionals

A Financial Adviser can help you to decide where to put your newfound wealth. When choosing a professional, make sure they’re qualified, reputable and trustworthy.

Whatever their title, all Financial Advisers in the UK need to be regulated by the Financial Conduct Authority (FCA). This means there are rules and regulations they must abide by when dealing with you. Most Financial Advisers will also need to have achieved certain qualifications depending on their specialism.

Review your strategy

Here are some tips on how to review your financial strategy:

1. Review your long-term goals

Decide on your financial goals and what you’d like to achieve. Do you want to clear any outstanding debts? Or contribute towards your retirement fund? Check in with yourself regularly to see how you’re progressing and whether your goals are realistic.

2. Review your expenses and budget

Keep track of your monthly outgoings and your personal budget. How much are you able to save each month? What areas are you spending the most on? Having a complete picture of your monthly finances can help you to identify opportunities to save.

3. Review your debts

Do you have a car on finance that you’d like to pay off? Or a personal loan you’re looking to clear? Check how much you need to pay and try to tackle the debt with the highest interest rate first, to save yourself money.

4. Review your taxes

It’s important to understand the potential tax complications of your windfall. Speaking to a professional can help you manage this. They can explain what taxes you’re likely to pay, such as Inheritance Tax and Capital Gains Tax.

Nurture your newfound wealth, with Flagstone

If you’ve received a lump sum of money, it’s important to consider how you’ll manage and nurture your cash. Our platform lets you move money around different savings accounts in a few simple clicks – so you can make sure you're earning the best possible returns.

If your windfall is over £85,000, you'll need to divide it up and deposit it into different banks to ensure the highest level of financial protection. Our cash deposit platform simplifies the process. You can spread your cash across different banks, all from one place. Enabling you to gain maximum FSCS protection.

See how Flagstone can help you achieve your savings goals – try our cash deposits calculator today to get started.


This article is not advice. If you would like to receive advice on your savings and investments, consider speaking to a Financial Adviser.



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