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  • FIRST POST
    • Dansmam
    • By Dansmam 10th Oct 17, 7:48 AM
    • 534Posts
    • 1,812Thanks
    Dansmam
    How to manage mums funds
    • #1
    • 10th Oct 17, 7:48 AM
    How to manage mums funds 10th Oct 17 at 7:48 AM
    We need to decide on a strategy for managing money (under power of attorney) for Mum who is living in a care home now. Combined savings and house sale leave her just under £600k. She needs £2k per month, after pensions and other income, to cover the care home fees so Iím hoping you good people can give us some pointers on best places to put her funds.
    About £40k left in ISA (old account at rubbish rate) rest is in current account after house sale and I believe we have 2 months protection left while we split it across institutions etc.
    Need to get a move on and put it to work as safely as we can. Sheís always put us first - canít let her down now.
    Help!
Page 3
    • bostonerimus
    • By bostonerimus 13th Oct 17, 2:38 AM
    • 1,211 Posts
    • 668 Thanks
    bostonerimus
    In what situation is it not?
    Originally posted by bigadaj
    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.
    Misanthrope in search of similar for mutual loathing
    • kkgree1
    • By kkgree1 13th Oct 17, 10:09 AM
    • 292 Posts
    • 152 Thanks
    kkgree1
    I (along with 2 other attorneys) manage my mother-in-law's finances who has lived in care for almost 3 years.

    Her house was sold before she moved (400k) and I spent a lot of time researching where to invest the proceeds.

    Some tips from us:
    - We took out an immediate needs annuity for her a year after she moved. This has been the best thing we have done as it pays half her care fees each month. It is worth getting a quote as there is no obligation to take it out. Please PM me if you want information on who we used.

    - We used a combination of fixed term bonds, fixed savers, easy access savings and premium bonds for the rest of her savings. Remember the 85k limit per institution.

    - One thing not mentioned but we struggled to open accounts with banks she hadn't previously used. Once you live in care it is more difficult to prove residence (you fail the electronic checks) and if you don't have a passport/driving licence you don't meet any of the ID checks. Not easy to get around!

    Take your time and research thoroughly. It would have been easier to use an IFA but if you are happy to do yourself, go ahead.

    Best of luck!
    • Heedtheadvice
    • By Heedtheadvice 13th Oct 17, 11:35 AM
    • 636 Posts
    • 316 Thanks
    Heedtheadvice
    Boston...
    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.
    I was not suggesting that capital should be risked just that the decisions taken should be appropriate and take into account all circumstances.
    You say there is more than enough capital to cover expenses. It is true a net return of 4% would meet the 2k a months current needs. However that is not easy to do without a potential risk to the capital and the possibility of cost and needs increases (not just inflation) ought to be considered. Costs could easily rise to say double that currently experienced if specialist care or medical support were deemed necessary or a move to a different or better home necessary. Only this week another provider of care has announced they are quiting owing to inability to provide care cost effectively.
    Add to that the real need for the POAs to get professional advice and you soon start to erode capital.

    I.e. keep an open mind and money langushing in low interest paying areas could be problematic!
    Last edited by Heedtheadvice; 13-10-2017 at 11:36 AM. Reason: minor changes
    • Dansmam
    • By Dansmam 13th Oct 17, 11:53 PM
    • 534 Posts
    • 1,812 Thanks
    Dansmam
    I (along with 2 other attorneys) manage my mother-in-law's finances who has lived in care for almost 3 years.

    Her house was sold before she moved (400k) and I spent a lot of time researching where to invest the proceeds.

    Some tips from us:
    - We took out an immediate needs annuity for her a year after she moved. This has been the best thing we have done as it pays half her care fees each month. It is worth getting a quote as there is no obligation to take it out. Please PM me if you want information on who we used.

    - We used a combination of fixed term bonds, fixed savers, easy access savings and premium bonds for the rest of her savings. Remember the 85k limit per institution.

    - One thing not mentioned but we struggled to open accounts with banks she hadn't previously used. Once you live in care it is more difficult to prove residence (you fail the electronic checks) and if you don't have a passport/driving licence you don't meet any of the ID checks. Not easy to get around!

    Take your time and research thoroughly. It would have been easier to use an IFA but if you are happy to do yourself, go ahead.

    Best of luck!
    Originally posted by kkgree1
    Thanks so much for the info and good wishes. I’ve sent a PM. We’ve already encountered the address issue as mum was living with one of us for a while and we changed her address for most of her routine letters. So no bills to show the P.O. to set up a redirection. If I was doing all this again I’d pay for the P.O. to redirect all post from day 1 but hindsight is a marvellous thing...
    Thank you ALL for the stream of useful thoughts. It’s much appreciated. To answer a couple of questions I am one of the attorneys and we’ve been reading up on our responsibilities. Mightily relieved to find the routine £20 birthday cheques to children and grandchildren are ok. We’ve just continued what Mum used to always send.
    Any tips on best risk free interest rates? Need to distribute funds across at least 5 more institutions pretty soon.
    Last edited by Dansmam; 13-10-2017 at 11:59 PM. Reason: Add info
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