What would YOU do with an unexpected windfall?

In this episode, Helen and Clare imagine what they would do with an unexpected windfall - and look at what you have told us you would do. You’re a pleasingly sensible bunch, with the majority of you saying you’d put that windfall towards savings and investments.

But what else should you be thinking about? From care costs, to pensions, and whether you should lock money away for the long-term, Clare and Helen dig into the different things you should be thinking about.

Use the player icons above to listen on your favourite podcast app, or read the full transcript below.

This podcast isn’t personal advice. If you’re unsure what’s right for you, seek financial advice. Pension and tax rules can change, and benefits depend on personal circumstances. Investments can fall as well as rise in value, so you could get back less than you invest.

Full podcast episode transcript

0:00:02 Helen Morrissey: Hello and welcome to the Switch Your Money On podcast from Hargreaves Lansdown. I'm Helen Morrissey, I'm Head of Retirement Analysis.

0:00:11 Clare Stinton: And I’m Clare Stinton, Financial Wellbeing Lead. This week, we're talking all about financial windfalls. Those times when an unexpected lump sum of money lands in your lap. We've all imagined it, haven't we? What we would do if we got that knock on the door and someone tells you that you've just won a million pounds. Helen, if that were you, you got the knock on the door, what would you do with one million pounds?

0:00:35 Helen Morrissey: Oh, what a lovely thing to think about, Clare. So, I mean, I think first and foremost, I would get that mortgage paid off. That'd be a really big thing. You know, I'd also like to think that I would invest some too, maybe give some gifts to family. But first things first, I would be going on a lovely long holiday. How about you, Clare?

0:00:53 Clare Stinton: I've got to agree. After so much rain, I think at this point we've had over 40 consecutive days of rain and it's only mid-February so I'd start by booking a holiday for some much needed sunshine. And then the sensible hat would go on. I'd of course look to top up my ISA and pension using my allowances before the end of the tax year and then I'd max them both out again on the 6th of April because, as they say, the early bird catches the worm. And then after that I'd pause. I'd let the excitement settle before I got carried away, and I'd think carefully about how that money could best support my long-term plans and goals. But Helen, I'm sure that we could talk about the possibilities of this and how we could spend that money all day.

0:01:33 Helen Morrissey: Absolutely, I mean, when we think of windfalls we do tend to think about things like winning the lottery or getting an inheritance. Now these things do have the potential to change our lives for the better but only if they are managed carefully. So research from April 2025 conducted by HL alongside opinion of 2,000 people and in that research we asked people what they would do with an inheritance. Now the good news is that people were incredibly sensible. Fifty three per cent said that they would put some into savings, 27% said investments and housing issues did loom large with almost one in five saying that they would pay off the mortgage or else use it to buy a house. Pensions were also popular with 17% saying that they would top up their pension. Only 16% said they would just have fun with it and 12% said they would just spend it as they go.

0:02:27 Clare Stinton: Really interesting, just 16% would splash the cash on fun. One in two would put some in savings. I think that really highlights that we are a nation of savers, especially when compared to just one in four who would look to invest it. Saving is a great first step, but long-term investing has the potential to take you further, especially if you've already got an emergency fund tucked away for a rainy day. It is great to have the extra money, but it's really important not to rely on getting a windfall. The potential pitfall is that people wait for that influx of money before building the foundations of their financial resilience, isn't it Helen?

0:03:01 Helen Morrissey: Yeah, you're absolutely right, Clare. You know, it can lead to people under saving for retirement, for instance, because they're expecting some kind of inheritance. So again, research that we did last April showed 32% of people believe that they would need an inheritance to support their income in retirement.

0:03:20 Clare Stinton: All kind of potential issues here, in particular with people living longer, people are likely inheriting later in life, which means you lose out on that lost growth opportunity in your pension. And there's a huge benefit in starting early, getting that money into your pension as soon as possible because of compound growth, which is where you can earn returns on your returns, as well as the initial sum that you invested. And that over a really long timeline can really help with the heavy lifting and growing your pension pot. Helen, what are the other concerns at play here?

0:03:50 Helen Morrissey: Yes, so I think it's important not to base your long-term planning on getting something like an inheritance. For a start, your loved one might change their mind over time. You could have an argument, for instance, and then find that you receive nothing. Or there could be new members of the family that come along that mean that everyone else gets that bit less. It's also worth thinking about the timing issues. So we are all living longer, and that could mean that you end up waiting far longer for an inheritance than you maybe would have thought. There's also a significant chance that care costs could eat up a significant chunk of someone's savings and leave them with far less than you thought so that can really have an impact on the amount that people can inherit. It's always better to make your own plans wherever possible.

0:04:34 Clare Stinton: That's a really good point. Though we are living longer, it's not necessarily healthier, so there could be a cost for care. As we said at the outset, there are different types of windfalls. How can people prepare and put a windfall to work supercharging their financial security?

0:04:50 Helen Morrissey: So, we need to have a look at what other so called windfalls might be coming your way to see how you can use them to boost your resilience. So, the first one is if you are lucky enough to get a bonus, then you could use some of that to beef up your finances. So, you could, for instance, pay some of this into your pension if you can afford to. If you're lucky enough have access to what's known as a bonus sacrifice scheme, then you can ask for a certain portion of the bonus to be paid directly into your pension and get the benefit of tax relief at your marginal race as well as National Insurance savings. Bonus sacrifice is like salary sacrifice which you may well have heard of and this is where you make an agreement with your employer to reduce your salary in exchange for a benefit. Because the salary’s lower, you pay less income tax and National Insurance and the employer also saves on their National Insurance bill too. It can be used to manage your tax bill if your bonus means that you're close to breaching a threshold, for instance, you know, into paying a higher rate of tax. Because you're sacrificing a portion of that bonus, then your salary can be kept below those thresholds. It's a very tax-efficient way of boosting your pension.

However, I do need to say that changes are incoming to salary sacrifice arrangements from April 2029. The amount that is exempt from National Insurance contributions will be capped at £2,000 a year for employee contributions made via salary sacrifice. As a result of these changes we do expect salary and bonus sacrifice to be very popular in the run-up to these changes.

0:06:23 Clare Stinton: Always getting the pension mention in their first Helen. What options do people have if they might want to access the money that they're putting away before age 55?

0:06:33 Helen Morrissey: There's always room for a pension mention Clare, but you know as you say you might not want to tie up your money until retirement. You could look across the market and see what you could get from savings accounts for instance. You could consider other options such as cash and stocks and shares, ISAs as well. Tax free income and in the case of stocks and shares, ISAs, that potential for long term investment growth it just means that you're making the most of your money and making it work as hard as possible.

Again, you do need to bear in mind that from April 2027, if you're aged under 65, you will only be able to put £12,000 a year into your cash ISA. I would say more widely as well, if your get that windfall, you need to think about what your key challenges are. So, you know, I talked a lot today about investing to grow your wealth but it is also worth saying that a bonus can also give you a great opportunity to pay off debt which can then free you up to do other things. You need to take a holistic view of your finances and work out what your priorities are before you make decisions.

0:07:36 Clare Stinton: Some great ideas there and for anyone who's recently come into a windfall or has money landing imminently, there is just over a month left before the end of the tax year and that means that there's still plenty of time to make use of any unused ISA and pension allowances. With self-assessment season just behind us, some people may also be receiving communications from HMRC about any rebates due, which could provide a timely opportunity to plan for those as well.

0:08:04 Helen Morrissey: Yeah they can and you know it's always nice to, you know, it's a lovely surprise to get a tax rebate from HMRC but what I would say is be very careful. You know I've had many a text and email over the years supposedly from HMRC saying that I'm due a rebate when I know that I’m not. This is really fertile ground for scammers so you should be very careful. Check email addresses carefully, don't click on links or give over personal details. If you fall foul of a scam, you could find yourself with much less money than when you started so always check with HMRC directly if you get any such communication around a rebate.

0:08:43 Clare Stinton: Great information there. It's important to stay vigilant. Of course the ultimate windfall is a big win on the lottery or premium bonds, isn't it?

0:08:51 Helen Morrissey: Absolutely, so the chance to win a life-changing sum of money is one factor behind premium bonds continued popularity. However, the chances of winning big are tiny and they are getting tinier still. So while you may still buy them, you need to make sure that you are getting the best from your money elsewhere, whether that be in savings or investments.

So now we've come to our stat of the week time Clare and you know, given that we've just mentioned enduring appeal of premium bonds, this is gonna be the source of my question. So what are the chances of winning a prize? Is it 16,000 to one, is it 22,000 to one or is it 28,000 to one?

0:09:37 Clare Stinton: I am going to go for the middle option, 22,000 to one.

0:09:42 Helen Morrissey: That is right Clare, so that is two weeks in a row.

0:09:44 Clare Stinton: Can I make it to three, the hat trick next week?

0:09:48 Helen Morrissey: I think I need to make the questions a bit harder so we'll see. [laughs] That's it for this week but before we go, we should remind you that this was recorded on February the 16th, 2026 and that all information was correct at the time of recording.

0:10:03 Clare Stinton: Nothing in this podcast is personal advice. If you're unsure about what's right for you and your circumstances, you should seek advice.

0:10:10 Helen Morrissey: Tax rules can change and benefits depend on circumstances. Pension money cannot normally be accessed until the age of 55, going up to age 57 from 2028.

0:10:21 Clare Stinton: Over periods of five years or more is when investing typically offers better returns than cash savings, but investments go up and down in value so you could get back less than you put in. So all that's left is to thank our producer, Elizabeth Hodson.

0:10:35 Helen Morrissey: And to thank you all very much for tuning in and we'll be back again soon. Goodbye.

0:10:40 Clare Stinton: Bye.