The most suitable option for you will depend on your plans and financial requirements over the next few years.
Bearing in mind the sum of money at your disposal, you should seriously consider seeking professional advice. To find the details of an independent financial adviser (IFA) in your area,visit unbiased.co.uk or vouchedfor.com.
You mention that you are hoping to travel and if you're planning to use some of the inheritance money to fund or part-fund your holidays, then you'll need to keep some of the money in an account where you can access it as and when you need it.
Work out roughly how much you think you'll need to keep in cash-based accounts to fund your travelling and any other major expenditure you have coming up in the next couple of years, so you know how much of your money you could afford to lock away.
Also, before you sit down with an IFA to discuss your options think about what you want from the bulk of your money - are you looking for medium-term growth or are you more comfortable with low-risk and more short-term ideas?
It's worth considering whether you want a monthly or annual income from it to supplement your state pension or whether you're happy for it to accrue in the account or investment you choose.
Aside from putting your money in cash-based products where interest rates are currently very low, you may wish to consider moving some of your tax-free balance into a stocks and shares-based Isa. However, professional advice is essential before going down this route, so you fully understand the risks involved.
Andrew Hagger is founder of personal finance website Moneycomms.co.uk