Managing inherited cash without the hassle

When a client receives an inheritance, whilst it is often a financial blessing, it can be an emotional and vulnerable time for them and they may feel overwhelmed, especially since the sums involved can be larger than they’ve experienced before. As a result, often the best first step is to pause rather than rushing into long-term planning - or spending. But pausing doesn’t mean leaving that cash sitting idle, or unprotected.

Keeping funds in a current account means earning little or no interest. Effectively, your clients are throwing money away - money that could be working towards paying for professional fees or achieving future financial goals. There’s also the risk that sizeable balances may exceed Financial Services Compensation Scheme (FSCS) protection, even though it has recently been increased to £120,000 per person, per banking licence. 

The good news is that there are a few solutions.

Short-term protection: Financial Services Compensation Scheme (FSCS) Temporary High Balance cover 

For cash received following certain qualifying life events, including inheritances, main property sales, personal injury compensation or redundancy, the FSCS has an extra string to its bow - Temporary High Balance (THB) protection of up to £1.4 million per person. But this extra cover lasts only six months from the date the money is first credited.

That limited window gives advisers valuable time to help clients consider their long-term financial strategy - but action is needed before protection falls away. After that, just the £120,000 limit will apply, so they then need to decide what to do with the cash – either splitting it into multiple savings accounts or leaving some of it at risk. 

The very best rates can be achieved by scouring the whole market and opening as many accounts as required to maintain FSCS coverage. But chasing rates, completing numerous applications, and keeping track of interest returns can become a major administrative headache, particularly for executors and beneficiaries navigating a difficult period. And with the reduction in the cash ISA allowance, plus an increase to the tax rate on cash savings coming into force in 2027, this means that it’s more important than ever to earn as much as you can from your savings. For too many years now, high street banks have relied on our inertia and so pay some of the lowest rates on the market. 

So, for those who don’t have the time, or the inclination, the funds could be placed with National Savings & Investments (NS&I). 

National Savings & Investments (NS&I)

All funds held with NS&I enjoy government-backed protection, which makes it popular for those with large cash holdings. However, clients often sacrifice competitiveness for that security, with rates rarely keeping pace with the wider market. However, the good news is that there is a smarter solution: Cash Savings Platforms.

Cash Savings Platforms

Cash platforms are increasingly used by advisers to manage large client cash balances – helping them to earn competitive savings rates, without all the hassle. 

With one application, clients gain access to a panel of banks and building societies. Funds can be split across multiple providers, helping to maintain FSCS protection. When a better product becomes available, money can be easily switched within the platform without new paperwork or delays. 

And when a savings product matures, clients can quickly move into the next most suitable option or transfer funds back to their current account - all from one secure portal. 

Another benefit that a cash platform can provide is an annual statement of all the interest earned from all the providers, making it simple to work out what tax is due. Gone are the days of waiting for your clients to chase their banks and building societies to get the accurate information needed. It’s all there at the click of a button. 

How clients are using platforms today

Giles Hutson, Chairman of the cash platform, Insignis, notes a strong rise in use among inheritance beneficiaries. He says

“With the “Great Wealth Transfer” gaining pace, increasingly large sums will pass between generations - and often as cash. Advisers who help clients manage those funds responsibly from day one, strengthen their roles as trusted professionals. 

Insignis is seeing a material increase in clients and their advisers using our service as part of their inheritance planning. Many existing clients on the platform are opening accounts for their children or grandchildren, and many new clients are opening accounts based on inheritance proceeds. 

In the event of an inheritance received, the average deposit stays on the platform for approximately one year while a longer-term plan is put in place for the proceeds. In the event of gifting to children and grandchildren, funds can stay on for very short periods of time if the deposit is used to pay down a mortgage or much longer if the recipient client is saving for an event such as a house purchase. And clients will often keep the account open for future use, even once the initial inheritance has been dealt with."

As intergenerational wealth transfers accelerate, professionals who can offer efficient, secure and competitive solutions will be best placed to support clients through what can be a challenging period. Cash platforms such as Insignis provide a straightforward way to protect large balances, optimise returns and reduce administrative strain at exactly the moment clients need clarity and confidence. To explore how partnering with Insignis could enhance your client service and streamline cash management, find out more about becoming an Insignis partner.

Become an Insignis partner

This article is intended for general information only, it does not constitute individual advice and should not be used to inform financial decisions.

The value of your investments can go down as well as up, so you could get back less than you invested.

The information in this article is based on current laws and regulations which are subject to change as at future legislations.

Please note that the Financial Conduct Authority (FCA) does not regulate estate planning or cash advice.

The information in this article is correct as at 10/12/25.