Where to put £250,000 life savings?
IceTry
Posts: 27 Forumite
My 80 year old mother has recently told me she has above life savings (plus her own small flat). She has kept them all in one bank so far!
I told her she needs to take some steps to spread the risk, especially taking into account the FSCS savings compensation limit of £85K per institution. Also, I have considered advising her to put her money in different kinds of account. Her aim is to minimise her risk but create some return as well.
How about splitting it four ways? Does that sound like a reasonable idea?
1. Basic Savings accounts £75K
2. Investment account(s) £75K
3. Premium Bonds £50K
4. ISAs £50K
But (a) have I missed something?! (b) any suggestions for Investment accounts (we really are babes in the wood here)?
Any advice really appreciated!
Thank you.
I told her she needs to take some steps to spread the risk, especially taking into account the FSCS savings compensation limit of £85K per institution. Also, I have considered advising her to put her money in different kinds of account. Her aim is to minimise her risk but create some return as well.
How about splitting it four ways? Does that sound like a reasonable idea?
1. Basic Savings accounts £75K
2. Investment account(s) £75K
3. Premium Bonds £50K
4. ISAs £50K
But (a) have I missed something?! (b) any suggestions for Investment accounts (we really are babes in the wood here)?
Any advice really appreciated!
Thank you.
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Comments
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You have missed that NS & I is fully guaranteed by the UK government.0
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Given your mother's age and risk appetite I'd say your idea sounds about right. Remember though that you can only fund cash ISAs at a rate of £20k a year, so in the meantime you could consider a short-term (1-2 year) bank bond - or use some of NS&Is other products, such as their Income Bonds and Investment Guaranteed Growth Bond (£3k only in the latter). In fact I'd say £75k in a bank savings account is probably overkill - consider reducing that to £10k and up the amount allocated to NS&I holdings.: )0
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Mum might want to consider a financial insurance policy - gold, the real stuff, in her own possession. That's sound advice given that Jacob Rothschild, a man who knows is onions, is a fan.
http://www.telegraph.co.uk/business/2016/08/15/rothschilds-rit-capital-dumps-sterling-assets-as-it-braces-for-t/0 -
Carrieanne wrote: »Mum might want to consider a financial insurance policy - gold, the real stuff, in her own possession. That's sound advice given that Jacob Rothschild, a man who knows is onions, is a fan.
http://www.telegraph.co.uk/business/2016/08/15/rothschilds-rit-capital-dumps-sterling-assets-as-it-braces-for-t/
Gold is a volatile commodity and if the OP is looking to minimize risk it is not a good choice.“So we beat on, boats against the current, borne back ceaselessly into the past.”0 -
My 80 year old mother has recently told me she has above life savings (plus her own small flat). She has kept them all in one bank so far!
I told her she needs to take some steps to spread the risk, especially taking into account the FSCS savings compensation limit of £85K per institution. Also, I have considered advising her to put her money in different kinds of account. Her aim is to minimise her risk but create some return as well.
How about splitting it four ways? Does that sound like a reasonable idea?
1. Basic Savings accounts £75K
2. Investment account(s) £75K
3. Premium Bonds £50K
4. ISAs £50K
But (a) have I missed something?! (b) any suggestions for Investment accounts (we really are babes in the wood here)?
Any advice really appreciated!
Thank you.
If your Mum has all her money is a simple bank account you are swapping the risk of the institution failing (probably low) for more risky investment accounts....I assume you intend to invest is some equities.
At age 80 does your Mum need capital appreciation or is she more interested in capital preservation? What sort of Investment Accounts and ISAs are you thinking about?“So we beat on, boats against the current, borne back ceaselessly into the past.”0 -
Don't over complicate things. Leave some in the bank and put all the rest in an NS&I Direct Saver (0.7%, fully protected even above £85k). Easy, job done.
https://www.nsandi.com/direct-saver0 -
bostonerimus wrote: »Gold is a volatile commodity and if the OP is looking to minimize risk it is not a good choice.
Yes, fair comment. My post read that she invest the lot in gold. I had meant to say a percentage, perhaps 10% or 20%.0 -
Carrieanne wrote: »Yes, fair comment. My post read that she invest the lot in gold. I had meant to say a percentage, perhaps 10% or 20%.
The OP stated that;
Her aim is to minimise her risk but create some return as well.
There is no return on gold. Gold involves risk; the price fluctuates.
I would suggest a 0% allocation to gold myself.
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...But (a) have I missed something?! (b) any suggestions for Investment accounts (we really are babes in the wood here)?
See
http://www.moneysavingexpert.com/savings/savings-accounts-best-interest0 -
MShe has kept them all in one bank so far!
Provided it wasn't some little know offshore bank (as recommended by a certain Mr Lewis), then so what?
Would you like to describe a scenario where a big name UK bank fails and the UK government actually allowed it to fail and to default on its retail customers so the £75k protection kicks in.
If things got to that stage, then frankly FSCS rules would be the least of her problems. Stocks of tinned goods, water, and ammunition would be the bigger issue.0
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