How best to invest £20,000 from an endowment policy

I've got £20,000 from an endowment policy (astonishing, I know), and I'm looking into how best to invest to get a reasonable return without excessive risk. Any thoughts much appreciated!!

Do you have a clear idea as to when you might want your money back? This will give you a considerable steer on how you should be investing.

Under 5 years, you should stick with Cash – the returns won’t be great, but it's too short a period to give the ups and downs of the stock market a fair chance for success.

For timescales beyond this, a stocks and shares ISA will give you plenty of choice and completely tax free returns.

Use an investment platform service as this provides the greatest choice of investment, research, tools to help you choose, and mobile apps so you can check how your money is doing on the move.

A popular low cost approach would be a passive fund which tracks the UK stock market, the FTSE All Share. Active fund managers are more expensive, but have the potential to give you better (and worse) returns that a tracker.

Equity income funds work well for first time investors, as they invest in companies which pay much of their profits to shareholders, known as dividends. Reinvesting rather than spending the dividends has proven a good investment strategy to boost returns.