How will I survive this?

Added: 2026-05-27

[00:00:00]This morning, new figures from the Office for National Statistics confirmed what most of us already knew. That is UK unemployment has risen to 5%. Youth unemployment, that is to say people between 16 and 24, is sitting close to 16%. And yet Rachel Reeves is stood at the dispatch box telling us that her economic plan is working. Meanwhile, insolvencies in January 26 were 41% higher than in December 25.

[00:00:29]151 companies entered administration in that month alone. TGI Fridays, Claire's, the original factory shop, Game Quiz Clothing, River Island closing 32 stores, cancer research shutting 88 charity shops, the British retail consortium warning that the NI increase will cost the retail sector 2.3 billion pounds a year. And by the end of 2025, more than 56,000 jobs were formerly at risk, a figure nearly 9% higher than the same period the year before. And this is the economy that Rachel Reeves has built and gloats over. Now, you might be wondering, what has anything of that got to do with the question in the title of inheriting 600,000?

[00:01:13]Well, everything really, because this channel, this is my money channel, exists precisely for moments like this one. when the economy is being mismanaged, when jobs are disappearing, when businesses are going under that have traded for decades or even hundreds of years in some cases, and they are closing without warning, and when people in charge of the country's finances either don't understand money or don't care about the consequences of their decisions. I'm not quite sure which. On this channel, we talk about real money, real businesses, and how to win at both, regardless of what the government does.

[00:01:45]So, welcome back. I am Daniel Shenmith.

[00:01:47]I run the Black Belt Barrister channel.

[00:01:48]I am a barristister. I'm a qualified mortgage adviser. I've been in business for well over 20 years. I've bought and sold dozens of properties in that time.

[00:01:56]I'm completely financially free. I have zero debt. I'm a self-made multi-millionaire. And I would love to talk about money and business and wealth creation with you on this channel. Not as any kind of preachy guru sense, just what works, what doesn't work, mistakes I've made and how you can avoid those mistakes. And I would love to talk to you about those things. So, please do subscribe to the channel. Thank you very much. So, someone left me a comment recently on one of my recent videos here and they said that they've just inherited a property. It's a very good question. Just inherited a property worth around £600,000 and it was completely debtree, I think.

[00:02:32]So, they have no idea what to do. Do they sell? Do they rent it out? Or do they just sit on it or what do they do?

[00:02:38]So, I'd like to give you a framework that I would actually use and I'm going to give it to you in a certain order because I think that really matters and probably more than most people realize.

[00:02:48]So, before we even get into the question itself, I'd like to talk to you about this framework because I think the framework can apply to everybody and then you can fit this into it. So, if you come across such a question, you'll have a better idea of what you might want to do with it or at least what you might want to consider. And so before we talk about any single investment and for the avoidance of doubt, none of this video is to be taken as investment advice or legal advice or anything of the sort. But before we talk about property or stocks, pensions, anything at all, the first question I would have for you is, do you have any debt? Like any debt at all, be that credit cards, personal loans, car finance, buy now, pay later, this sort of stuff, any of it. Because here's the maths of it all, which is somewhat alarming really, especially to someone who grew up in the 80s. So, the average credit card in the UK is charging somewhere between 20 and 25% APR with a market representative APR average including the fees of something around a staggering 36%.

[00:03:48]And by law, the representative APR must factor in annual card fees alongside the interest rate and everything else because high-end reward cards and airline cards often charge massive annual fees and that sort of stuff which you'll be familiar with. So the first question is about these. A personal loan might be between 8 and 15%, even cheap debt at 5 or 6% is almost certainly costing you more than you probably reliably earn anywhere else. So before we talk about investments, before we talk even about inflation or anything else, we need to talk about the debt because these sort of percentages are killing your wealth. It is as simple as that. In other news that might alarm you, Hallmark's Cards has just had 2.8 million customer accounts leaked by hackers, including names, phone numbers, email addresses, dates of birth, you name it. Hallmark hasn't even at the time of recording put out a statement yet. That is data that you gave when you were buying someone a birthday card now floating around on the internet somewhere. And believe me, data brokers would have listed it within weeks. They are buying it. They are selling it. It's moving on. And lots more people are getting it and so on. And if you think Hallmarks will be the only company that has a leak like this, think again. These happen week in week out. And this is exactly why you need to take control of who has your data. Whenever you've bought something, they've got your data.

[00:05:13]You might need to go back to them and get it removed from their system so that it can't be leaked and shared and sold and so on. And that is exactly why I partner with Incogn on this channel, which is set up specifically to contact all of these companies, data brokers and marketers, and even companies that you know you've worked with or given your details to, and you can ask them to remove your data from their systems.

[00:05:37]Because remember, if your data is leaked and it's out and about there, you might get your identity stolen and that might cause all sorts of havoc on your life.

[00:05:47]But with Incogn, you can save hours and hours of contacting all these companies using UK and US law to insist and require that they remove your data from their servers, reducing or eliminating the risk that it gets leaked and stolen and your identity then gets stolen. And as they're a partner to my channel here, you will get 60% off the annual plan using my code Daniel Shenmmith, which I'll put as a link in the description below. It's an ongoing service, so you'll get access to a dashboard. You'll see just how many hundreds of companies, which will amaze you, confirm they've got your data, confirm when they're removing it, and when it's been removed.

[00:06:24]So, don't forget the code Daniel Shan Smith for 60% off. You'll be amazed how many companies remove your data. So, paying off debt that carries 20% interest is something of the equivalent of finding a guaranteed risk-free investment, returning 20%. And that investment just doesn't exist anywhere in the legitimate financial world. No one can guarantee that. Now it admittedly some of it might rock it and you might get some great results. We've got some really good results on some of our trading. But a guaranteed 20% just doesn't exist. So clear it all of it.

[00:07:00]All of the debt before you do anything else. That is your main focus. And if you want a tool to help you do that, I have a free spreadsheet which you can sign into my website pro.blackbellbar.com and you'll find it on the free section on the top right hand side. And then of course you can check out all the other uh things that are on there as well. But that is the first thing you do. You'll budget everything into that spreadsheet and pay off your debt. Now this is not exciting. I accept it is not uh it's not even pleasant sometimes for some people to face up to the debt that they have.

[00:07:33]But pound for pound it is the highest return financial decision you will have every single time because this debt is a guaranteed amount that it's going to charge you but you won't get a guaranteed amount in the stock market or anywhere else. You might get good returns but the interest that they charge you on your debt is most certainly more reliable than anything else. So even at a relatively low mortgage rate at four or 5% there's a guaranteed cost you're going to pay each and every month year on year for decades. Eliminating it and there's two things here. There's something I come across the other day which is not only will it eliminate your monthly outgoings and your financial resilience will suddenly go through the roof and you own your own home outright and no lender has a charge over it or anything else. But the real thing is that the emotional value of that, the very real stress relief value is unquantifiable. You cannot possibly understand how free you will feel when you eliminate that debt.

[00:08:39]You'll see all sorts of adverts sometimes literally screaming at you down the camera, don't pay off your mortgage with respect to them. They obviously haven't and they obviously don't understand how freeing that sensation is because the emotional value of having that reliance is real and it's consistently underweighted in financial conversations. So the security of knowing that no one can repossess your home because there's nothing outstanding on it. The freedom that it gives you, it gives you the power to say no and the your ability to take a bit more risk elsewhere because you own your home. So anything else is something of a game because you own your house. I cannot emphasize that enough. So on the one hand mathematically if your mortgage rate is 4% say and you believe that you can consistently earn 7% in a diversified portfolio keeping the mortgage and investing might look better on a spreadsheet. And you'll get some comment warriors saying, you know, this is not the best advice, blah blah blah, but your mortgage payment comes at a cost, not just a monetary cost. And also, if you've inherited a 600,000 property with no mortgage on it and or even if there's a remaining mortgage on it or whatever, paying off your mortgage gives you freedom and peace of mind that you've never known before. And so, there comes the first hint at an answer to this question. If you've inherited a £600,000 property mortgage free and you've got a remaining mortgage of £150,000, then paying it off leaves you with £450,000.

[00:10:19]That's not spending the money. That's eliminating a liability before you invest the capital, which is the correct order in which to do things. The alternative is to become an incidental landlord, which comes with its own problems, which I'll discuss later. Of course, interjecting a warning here.

[00:10:35]Always get proper advice on your specific numbers, etc. You know, don't just dismiss them and run out and do something. But these are general answers and possible strategies to this situation. Another significant step in this process is to understand the tax before you spend or move a penny. This is the part that people skip and it's often the part that causes the most damage and that is after obviously working out the legalities of whose property it is, whether there's any probate problems or anything of the sort. Now, normally you do not pay capital gains tax just because you inherit the property and you do not pay stamp duty merely because it passes to you. But there may be inheritance tax at the estate level, rental income tax if you let it out, and capital gains tax if it later rises in value and then you sell it as a non-main residence. And you need to know this before you commit to anything. And that again feeds into becoming an incidental landlord because if you're right up in a tax bracket and you then uh start taking some sort of income from the property, that might skew things. And so if you haven't got one already, you should really hire a qualified accountant who specializes in property, estates, and uh the tax of this nature. Not just a friend who thinks he knows a little bit and not just this video. This video is to give you a framework of how to think about it to go away and get the proper professional advice because advice is necessarily somebody sitting down with you discussing your specific situation.

[00:12:11]A professional with letters after their name, and I've got several, um, will then have a specialism in those areas. A good accountant will save you multiple times of their fee. So now, once the debt is gone, the mortgage is cleared, you understand the tax, what do you do then? Or what do you do with what remains? If you've paid off your mortgage for example, then we come into the real structure of making money and investments. And here's how I would structure it. So this is not absolutely what you should do. This is what I would do. And so this is an order of priority.

[00:12:53]Pension first of all and the carry forward strategy. This is one of the most powerful. Now, this is arguably one of the most powerful yet most underused tool available to ordinary investors in the UK. So, I want to spend a good amount of time talking about it because most people walk straight past it. They think that is for when I'm older. That's for when I'm retired. I don't want to think about that now. Don't need to think about that now. All sorts of excuses. And that used to be me. And so, I had to play catchup for a while. But let me put it like this. The annual pension contribution allowance is £60,000.

[00:13:30]So every pound that you contribute attracts income tax relief at your marginal rate. So if you're basic rate taxpayer, the government tops up every pound you put in by 20%. For higher rate taxpayers, 40% additional rate above 125,000 odd at 45%.

[00:13:51]In practical terms, that means higher rate taxpayers contributing £40,000 to their pension only actually pays £24,000 in of their own money. The government adds £16,000 tax relief. That is a guaranteed instant 67% return before the money is even invested in a single thing. And so in effective terms, a £40,000 gross pension contribution can cost a4% taxpayer £24,000 after full tax relief. Although part of that relief might come through the tax return rather than being added directly to the pension. That is a guaranteed instant 67% return before the money is even invested in a single thing. Nothing in the legitimate financial world does that. But do bear in mind that the ultimate pension withdrawals may be taxable. But here's the bit that most people haven't even thought of, the carry forward. You are not limited to this year's allowance, which is great for those of you that are going to play catchup because you can go back for three complete tax years and use up any unused annual allowance from those years. So in theory, someone with enough relevant UK earnings and sufficient unused allowance could contribute up to £240,000 gross in a single year. That will be this year's 60,000 plus unused allowance from the previous 3 years. But bear in mind the taper, the money purchase annual allowance, and being registered in a relevant pension scheme for each of those years. If your partner also has unused carry forward allowance, you can effectively double that figure between you, helping you to play catch-up, which is again another way that you might utilize this money if you come into an unexpected windfall. But of course, again, you need to get proper advice on this for your specific circumstances.

[00:15:48]The taper rules for high earners are specific and the mechanics of your carry forward need to be done correctly. But don't skip the conversation altogether.

[00:15:58]is one of the most genuinely powerful tax efficient strategies available sitting there in the rules and most people never use it. But you've probably heard the phrase that the wealthiest people use the rules to their best advantage and some people seem to think that that's unfair. But those are just the rules. So you can play it in exactly the same way and use the rules.

[00:16:23]Next comes the stocks and shares ISA at 20,000 a year. This is another essential rapper. Rapper is just somewhere you can put the money for some sort of tax relief. Up to £20,000 per person per tax year. All growth and income inside the ISA, so inside the wrapper, is permanently free from capital gains tax and income tax, not deferred, free forever. There is no carry forward, however, with ISIS and so you use it or lose it every April. But again, if you have a partner, that's £40,000 a year sheltered between you. Max this out every year without fail if you have the funds to do so. Make it a permanent habit. As soon as you can get it done over 20 or 30 years, the compounding effect of a sheltered growth inside an ISA is extraordinary.

[00:17:21]You've probably read or heard that the best performing accounts are those found to belong to people who've died because they leave them alone over a long period of time and they grow and they grow and they compound and they grow some more.

[00:17:34]So you can copy this deliberately by putting it in over time leaving it forgetting about it and over time the growth is absolutely extraordinary. Now, for most people, you should probably look at lowcost, globally diversified index funds inside the ISA wrapper. Not stock picking, trying to time the market, not chasing last year's top performance. A broad lowcost index tracker held consistently over the long term. These again are found to be the best performers. And if you need a seamless and highly regarded platform to get started with a cash iser or stocks and shares Iser, then check out E Toro, which we use, and I'll put a link to that in the description below. Not a sponsored video, but I am an affiliate to E Toro, so you can check that out below. It's seamless to sign up. Next, we'll talk about a general investment account. Once you've maximized out your pension and your ISA contributions, a general investment account, a GIA is where the rest can go. Unlike the ISA and the pension growth and income on a GIA are taxable, but you still have your annual capital gains allowance currently at £3,000 per person per year, and you can manage disposals across tax years to minimize that tax liability. The GIA will give you the flexibility that the ISA and the pensions don't. There are no contribution limits. There's no lock in.

[00:19:02]It's accessible at any time for amounts that exceed what you can shelter in tax efficient rappers such as the pension and the ISER and so on. This is the natural next home for it. Next, we will talk about premium bonds. And again, don't dismiss these just because they've got some bad rep from some people talking about them. At the end of the day, premium bonds are backed by the Treasury. The price fund rate is currently at 3.3%, rising to 3.8% from the July 2026 draw.

[00:19:33]Your capital is backed by the Treasury, but the return is not guaranteed.

[00:19:38]Crucially, however, all prizes are tax-free.

[00:19:41]The maximum holding per person is £50,000. So, if you have a partner, then between you, that's obviously £100,000.

[00:19:50]Premium bonds are not going to make you rich. But for money that you want to keep safe, completely accessible, completely tax-free on the returns. It's just a sensible part of the picture. If you have that money and you want to put it there, that is something else you can use. Now, just a quick word on some of the alternatives for completeness because they do come up in conversation.

[00:20:11]There are some other tax efficient vehicles worth being aware of, but we need to be honest about where they sit and it's all down to risk profile which I'll come back to. We've got VCTs, venture capital trusts, and we've got EIS's, enterprise investment schemes. They offer headline tax relief. That sounds extraordinary. 30% income tax relief, capital gains deferral, potential inheritance tax relief. And the reason those numbers look so attractive is because the underlying investments are early stage, often unproven, illlquid small businesses, and many of them fail.

[00:20:49]The minimum holding periods are sometimes quite long. The there's a real complexity about them. And so these are really tools for some sophisticated investors who've already fully optimized their pension, their ISA, and everything else. They're working with special advisers sometimes or they just really know what they're doing and so they are just special vehicles for certain types of investors. Again, it depends on your risk profile. Then we have offshore investment bonds. These can be useful for specific estate planning and tax deferral strategies, but they are complex and they depend entirely on your individual circumstances and they are certainly not a starting point.

[00:21:30]Then we have lowc UK government bonds, guilts. They can be used to generate tax efficient returns by separating the income element from the capital gains element. But again, it's a specialist tool, not something for beginners, but it's something to consider. And so coming full circle, my position on all of these is to max out your pension with the carry forward allowances, max out your ISA, consider premium bonds, consider a GIA, and get proper specialist advice before going anywhere near any of these more complex or more risky rappers. The simpler tools are usually the more powerful ones and far more powerful than most people realize.

[00:22:10]And they'll serve for the vast majority of investors extremely well without the risk or indeed the complexity.

[00:22:18]But now let's talk about the property in question itself.

[00:22:23]The brief answer because this deserves its own video and I will do one. But the simple answer is as follows. Whether you sell, whether you rent or whether you hold the inherited property depends on your existing financial position, your current tax position, your appetite for risk, your obligations of being a landlord, which again I will come on to, and whether the yield after all the costs and the stress and everything else of being a landlord actually makes sense to you. So, let's talk about that because being an accidental landlord, that is to say, a non-professional landlord. You've inherited a property or you've moved and you decide to keep it or whatever the reason is, I say incidental because or accidental because you didn't you didn't mean to. You didn't go out and say, "I'm going to buy this as an investment property and make that my business." For most people, it's not your business. And if it isn't your business and you know nothing about it, it's generally something you should steer clear of. The number one rule for business is don't invest in a business or don't start a business in something that you've no idea about doing. So there are many businesses that I wouldn't go near because I don't understand them. The same is for landlords really. Even if you've got an agent and agents in my experience are generally terrible. All they do is remove you one step away from the tenant and they they do sort of handle some of the admin and various bits and pieces but ultimately in my experience agents are terrible. But otherwise, you have to do it all. So, it's the the lesser of two evils, as it were. But either way round, being an accidental landlord or being a professional landlord even is often a legal minefield. There are gas safety certificates. There are electrical installation condition reports. There are EPCs. And in England and Wales, the move to an equivalent EPC rating as standard by October 2030, subject to the detailed rules and exemptions. Always worth bearing in mind. And something else you have to stay on top of. There's deposit protection, right to rent checks, the new writers, rent reform, whatever they call it, rights that you need to give them the information for. There's legionella assessments. There's, you know, all sorts of different things that you have to get right. And that is before you find a good tenant who's likely to pay and get the tenency agreement sorted out. And as the barrister who's been to countless, I've couldn't possibly count how many landlord tenant cases where they've gone wrong because the landlord didn't have one of the other thieves in place and the tenants not paying and so on and so forth. Get the compliance wrong. And the consequences are not just costly and serious, but they take a long time. And so if you're going to rent it out, you need to go into it with your eyes open.

[00:25:04]Get all of the information pretty much back to school. Even if you use an agent, you need to fully understand it because with the law and especially the new law and the new rights, it really does bash landlords over the head. And that's before you look at all of the deductions that you're not allowed to make anymore as a landlord, which I'll get into in another video. Probably, like I said, it deserves a full video by itself. And if and when I do it, I'll link it. But what I'm kind of saying is for most people, it's not a great move.

[00:25:35]Most people will think that, oh, just let it out and it'll be some extra money and that'll take care of that. It'll go up in value over time and blah blah blah. But in many cases, you know, if you put the money into say a GIA, then it might outperform the property market anyway. There's risks involved and all the rest of it, but really there's the risks of being involved in a landlord and you know you can lose as much in one year that might offset gains that you would have made otherwise anyway. So, it's a bit of swing and roundabouts, but particularly if you don't know what you're doing. And so, overall, the framework again that I would urge you strongly to think about is number one, clear all debt. Every penny of it, the highest interest rate first ideally, or if you want a psychological win, the smallest uh balance first, but you know, financially speaking, the highest interest first would work better. But again, there's a free spreadsheet on my website, which I'll link down below.

[00:26:27]Secondly, pay off or seriously pay down or make a plan to continuously pay down your mortgage. Don't listen to the stupid adverts that say don't pay off your mortgage because they don't know what they're talking about. Once you've paid it off, you will feel a sense of relief that you cannot possibly explain.

[00:26:43]And most importantly, you cannot buy.

[00:26:46]You simply cannot buy that peace of mind. Seriously, it gives you this position where you can say, "No, I don't want to do that. I don't want to do that work. I want to do this. I want to do that. or I want to take some time off or I want to do what I enjoy or whatever.

[00:26:58]It gives you that peace of mind to do that when you know you don't have a mortgage.

[00:27:04]Those of you who don't have a mortgage, let the others know in the comments that's exactly where you sit right now.

[00:27:09]You are sitting pretty and happy because you don't have a mortgage. Let them know in the comments so they can see that you're there. The security of owning your own home outright has a value. You cannot put on a spreadsheet. You cannot put a number on it. You cannot go out and buy it. It is just there.

[00:27:25]Thirdly, understand your tax position before anything else. Get professional advice. Know exactly where you stand because you cannot do anything until you understand that. Fourthly, maximize your pension using your carry forward up to £240,000 with full tax relief, £60,000 a year. Then into stocks and shares, IS20,000 a year, permanently taxfree. I did another video on ISIS which I'll link down below or you'll find it in the playlist. Then you've got general investment accounts for amounts beyond the tax efficient rappers um with careful management of capital gains tax and so on. And then if you've got something left or you just want something that little bit more secure, bearing in mind the um inflation rates and everything else, then you've got premium bonds for safe accessible tax-free holdings up to £50,000.

[00:28:14]And consider only with specialist advice who will properly advise you on your risk appetite, the more complex structures, VCTs, the EIS's, offshore bonds, low coupon guilts, and only after you've got everything else sorted. I wouldn't even go near those until you've got everything else sorted.

[00:28:33]And know what you're doing with the property specifically. Get advice on the property, both legally, financially, and everything else about that property, even from agents. Just ask them, "Is this likely to rent? Is this likely to be a good runner? What am I likely to attract if I sell the property?" And so on. Know exactly where you stand. And with the economy that we're in, unemployment and businesses going under and a chancellor who appears to believe that the answer to everything is to tax you more and rejoin Europe or whatever.

[00:29:06]In that sort of environment, understanding how to protect and structure and grow what you have is absolutely essential. No one else is going to do that for you. So again, I um this is not preachy. This is what I would do. This is the strategy that I would go through and consider this exactly what we have done step by step and I can tell you that you know daily fluctuations on a healthy account can go up more than somebody will earn at any kind of salary and it is staggering once you achieve that certain level on top of having no mortgage and the freedom of sitting your own in your own house with no mortgage you cannot buy that. So again, drop your questions below in the comments. I try to read as many as I can. Um, even if I don't respond to you all, this is exactly the conversation that we are here for. Uh, so please do subscribe to the channel if you want any more of this content. As always, thank you for watching.