How to manage mums funds

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  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
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    I think you need to have a frank discussion with her doctor as next of kin and get a handle on her prognosis. If there's a good change of your Mum seeing her 90s then the enhanced annuity might be worth considering and you can cover inflation from the rest of the estate. Watch out for IFA fees.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • Malthusian
    Malthusian Posts: 10,944 Forumite
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    bostonerimus wrote: »
    I don't think the OP needs an IFA, he/she and the siblings should be able to deal with the finances once a plan is in place and I would either do an enhanced annuity or a simple NSI savings bond ladder.

    If you mean a care annuity then they can only be taken out with advice so your post is contradictory.
    Dansmam wrote:
    Thanks for all your contributions. Any views on waiting for interest rates to rise?

    If we were having this conversation a few years earlier and you'd decided to wait for the inevitable interest rate rise, you'd spend seven years sitting on your hands.
  • xylophone
    xylophone Posts: 44,427 Forumite
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    It is so what Mum would want - she is riddled with various physical things and can’t deal with complicated decisions but she is thoroughly enjoying seeing her grandchildren grow up and I’m sure she has her 90s in her sights. A determined lady.

    I spoke to relative who had just been to see his "determined lady" - (now almost stone deaf so he writes down his comments and questions...).

    She was telling him that she had just had her latest blood test - it seems that a low blood count can now be added to her list....but she soldiers on!

    SOLLA for adviser? https://societyoflaterlifeadvisers.co.uk/
  • Heedtheadvice
    Heedtheadvice Posts: 2,461 Forumite
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    edited 12 October 2017 at 12:05PM
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    There have been plenty of posts advising getting independent advice. I can only reiterate that but would add getting it soon before you make any decisions as to where to put any cash!
    Premium Bonds (and other 'good' ideas) might not be legally appropriate.
    Remember with POA you have got to act in your mum's best interest. That might not be preservation of capital especially as has been written increased care costs and prospective longevity or if she need extra care later or a change of home.

    For harmony sibling agreement is good but who actually has POA? It is that/these person(s) who need to get advice and make the decisions. It could be that other siblings disagree but it is those with POA that have the responsibility and you then need to take the professional advice, not make what might seem sensible decisions straight away. Act on behalf of your mother and protect yourself.

    Not professional advice but I would keep money temp in a bank account(s), get the doctors opinions written(!), meet with a good IFA armed with all the information (get recommendations locally as to who to choose!) and then take that advice.

    Lots of good info and ideas on here but you have no idea those that are good and legal for the POA to implement! As Linton and others have said get professional advice.....and soon!
  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
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    Malthusian wrote: »
    If you mean a care annuity then they can only be taken out with advice so your post is contradictory.

    I'd get quotes and compare costs and taxes. I'd try to avoid an IFA, but I understand that in the UK the market is arranged so that you have to go through them to get certain products. Whether an annuity (care or not) is appropriate is going to depend greatly on life expectancy.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • enthusiasticsaver
    enthusiasticsaver Posts: 15,594 Ambassador
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    Dansmam wrote: »
    This made me laugh out loud 😉. It is so what Mum would want - she is riddled with various physical things and can’t deal with complicated decisions but she is thoroughly enjoying seeing her grandchildren grow up and I’m sure she has her 90s in her sights. A determined lady.
    Thank you ALL for your suggestions.i am pretty clear that we should
    1. Put her excess funds into NS&I as a stopgap. Possibly £50k I premium bonds. She would enjoy a win! And it’s not a bad place to wait to see if interest rates improve.
    2..check what’s on offer as annuity
    3. Check instant/quick access-best interest rates and transfer in without long tie ins to be free to transfer when/if rates rise - can’t be far off, surely? ( views welcome)
    4. Find an IFA that offers sensibly priced advice for her - pretty uncomplicated imho - situation. The only complication as I see it is in the unknowns of life expectancy and potential for increased care costs/interest changes and inflation. So as attorneys we can only take advice and make our best guess.
    FYI on the sibling front, there are a lot of us but we (and our partners) have a pretty united view that we put mum’s interests first. Everyone is working and while I’m sure we could all find a use for an inheritance (someone suggested it would be naive not to take account of that and if would always have been in the mixfor Mum and dad who each had something from their own parents) it’s not top priority for any of us . We just emptied and sold the family home with no fall-outs and I don’t anticipate anything but amicable rowing in future. It’s how we were raised 😉
    Thanks for all your contributions. Any views on waiting for interest rates to rise?

    Sounds like a good plan. Views on interest rises are mixed. I personally cannot see them rising much with the level of personal and government debt in this country particularly with stories coming out of recessions due to Brexit etc. I think we are stuck with low interest rates for some time - great for borrowers but lousy for savers.
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  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
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    enthusiasticsaver wrote: »
    Sounds like a good plan. Views on interest rises are mixed. I personally cannot see them rising much with the level of personal and government debt in this country particularly with stories coming out of recessions due to Brexit etc. I think we are stuck with low interest rates for some time - great for borrowers but lousy for savers.

    In the OP's situation the value of the annuity is purely longevity insurance.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
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    Heedtheadvice wrote: »
    There have been plenty of posts advising getting independent advice. I can only reiterate that but would add getting it soon before you make any decisions as to where to put any cash!
    Premium Bonds (and other 'good' ideas) might not be legally appropriate.
    Remember with POA you have got to act in your mum's best interest. That might not be preservation of capital especially as has been written increased care costs and prospective longevity or if she need extra care later or a change of home.

    There is more than enough money in the OP's mum's estate to cover the expenses given in the original post, even with inflation. I don't see any reason to risk the capital.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • bigadaj
    bigadaj Posts: 11,531 Forumite
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    bostonerimus wrote: »
    In the OP's situation the value of the annuity is purely longevity insurance.

    In what situation is it not?
  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
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    bigadaj wrote: »
    In what situation is it not?

    There was a time when fixed annuities had some return and interest rate and mortality credits were quite attractive. I actually have a small deferred annuity that I bought back in 1987 and locked in some nice high interest rates, it was pure luck as I had no idea what I was buying. The average interest rate has been 6% and this year it will return 4.3%, it has a guaranteed minimum of 3%. A couple of years ago (age 55) I went through the exercise of getting a quote for turning it into a lifetime annuity and I got a payout rate of 7% and a growth rate (interest plus mortality) of 5.5%, not bad assuming I lived at least an average lifespan. But I have enough guaranteed income, and it's a fairly small amount, so I just keep it as a bit of fixed income that I'll never touch and will go my grand niece when I croak.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
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