You have €800k in savings plus a house worth €1m.
If you are getting a real return of 3% on these, that would be about €50k per annum. In other words, you could run your capital down by €50k and still maintain your wealth in real terms.
Your investments should be in the stockmarket to get the best long term return. I am not sure if you have other taxable income as you say "we were both self-employed". If you don't have other taxable income, you should buy a portfolio of shares directly. Your tax credits would use up most of the taxable dividends, so this element of your income would be tax free.
If you have other taxable income, you could either buy unit-linked funds or invest directly in shares. The advantage of unit-linked funds is that if you buy a low charge fund, you can cash part of it as you need it.
People make a false distinction between income and capital. An investment which is paying at 5% income is the same as an investment rising at 5% a year but paying no dividend. You just have to cash part of it as you need it.
But most of all, €300k in cash is just too risky. Over the next ten years it will decline in real terms. In other words, in ten years, you will be able to buy a lot less with €300k than you can buy today due to inflation.
To reduce the long-term risk, put the money into the stockmarket as soon as possible.