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  • FIRST POST
    • IceTry
    • By IceTry 17th Jun 17, 7:35 PM
    • 23Posts
    • 11Thanks
    IceTry
    Where to put £250,000 life savings?
    • #1
    • 17th Jun 17, 7:35 PM
    Where to put £250,000 life savings? 17th Jun 17 at 7:35 PM
    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.
Page 1
    • Daniel54
    • By Daniel54 17th Jun 17, 7:53 PM
    • 569 Posts
    • 661 Thanks
    Daniel54
    • #2
    • 17th Jun 17, 7:53 PM
    • #2
    • 17th Jun 17, 7:53 PM
    You have missed that NS & I is fully guaranteed by the UK government.
    • Flobberchops
    • By Flobberchops 17th Jun 17, 7:59 PM
    • 553 Posts
    • 378 Thanks
    Flobberchops
    • #3
    • 17th Jun 17, 7:59 PM
    • #3
    • 17th Jun 17, 7:59 PM
    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.
    I work for a UK bank, but any comments made on this forum are solely my personal opinion. Caveat Emptor!
    • Carrieanne
    • By Carrieanne 17th Jun 17, 11:50 PM
    • 63 Posts
    • 58 Thanks
    Carrieanne
    • #4
    • 17th Jun 17, 11:50 PM
    • #4
    • 17th Jun 17, 11:50 PM
    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/
    • bostonerimus
    • By bostonerimus 18th Jun 17, 12:36 AM
    • 872 Posts
    • 439 Thanks
    bostonerimus
    • #5
    • 18th Jun 17, 12:36 AM
    • #5
    • 18th Jun 17, 12:36 AM
    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/
    Originally posted by Carrieanne
    Gold is a volatile commodity and if the OP is looking to minimize risk it is not a good choice.
    Misanthrope in search of similar for mutual loathing
    • bostonerimus
    • By bostonerimus 18th Jun 17, 12:40 AM
    • 872 Posts
    • 439 Thanks
    bostonerimus
    • #6
    • 18th Jun 17, 12:40 AM
    • #6
    • 18th Jun 17, 12:40 AM
    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.
    Originally posted by IceTry
    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?
    Misanthrope in search of similar for mutual loathing
    • Zanderman
    • By Zanderman 18th Jun 17, 8:17 AM
    • 1,231 Posts
    • 3,621 Thanks
    Zanderman
    • #7
    • 18th Jun 17, 8:17 AM
    • #7
    • 18th Jun 17, 8:17 AM
    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-saver
    • Carrieanne
    • By Carrieanne 18th Jun 17, 4:00 PM
    • 63 Posts
    • 58 Thanks
    Carrieanne
    • #8
    • 18th Jun 17, 4:00 PM
    • #8
    • 18th Jun 17, 4:00 PM
    Gold is a volatile commodity and if the OP is looking to minimize risk it is not a good choice.
    Originally posted by bostonerimus
    Yes, fair comment. My post read that she invest the lot in gold. I had meant to say a percentage, perhaps 10% or 20%.
    • antrobus
    • By antrobus 18th Jun 17, 4:09 PM
    • 15,044 Posts
    • 21,383 Thanks
    antrobus
    • #9
    • 18th Jun 17, 4:09 PM
    • #9
    • 18th Jun 17, 4:09 PM
    Yes, fair comment. My post read that she invest the lot in gold. I had meant to say a percentage, perhaps 10% or 20%.
    Originally posted by Carrieanne
    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.
    • antrobus
    • By antrobus 18th Jun 17, 4:12 PM
    • 15,044 Posts
    • 21,383 Thanks
    antrobus
    ...But (a) have I missed something?! (b) any suggestions for Investment accounts (we really are babes in the wood here)?
    Originally posted by IceTry
    See
    http://www.moneysavingexpert.com/savings/savings-accounts-best-interest
    • Altarf
    • By Altarf 18th Jun 17, 4:37 PM
    • 2,843 Posts
    • 1,677 Thanks
    Altarf
    MShe has kept them all in one bank so far!
    Originally posted by IceTry
    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.
    • IceTry
    • By IceTry 18th Jun 17, 8:57 PM
    • 23 Posts
    • 11 Thanks
    IceTry
    Thanks everyone, sounds some good stuff to mull over.

    I hear what your saying Altarf : "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".

    However, my mother's money was all in Santander which of course is a Spanish bank, so that may or may not make a difference. I can't remember what happened with the Icelandic bank, but I don't think everyone got their money back when it went under.

    "Stocks of tinned goods, water, and ammunition would be the bigger issue" made me laugh though!
    Last edited by IceTry; 18-06-2017 at 9:01 PM.
    • Carrieanne
    • By Carrieanne 18th Jun 17, 10:34 PM
    • 63 Posts
    • 58 Thanks
    Carrieanne
    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.
    Originally posted by antrobus
    That's your opinion and you're entitled to it. Mine is the original poster and his/her mother ought to invest more thought about the return of her money rather than a return on it. The government guarantees to return up to a maximum sum. That requires faith in politicians, and of course there's no backstopping with regard to its purchasing power. You won't be surprised to learn that I fully expect expect the debt bubble to pop by year's end.
    • Zanderman
    • By Zanderman 18th Jun 17, 11:28 PM
    • 1,231 Posts
    • 3,621 Thanks
    Zanderman
    That's your opinion and you're entitled to it. Mine is the original poster and his/her mother ought to invest more thought about the return of her money rather than a return on it. The government guarantees to return up to a maximum sum. That requires faith in politicians, and of course there's no backstopping with regard to its purchasing power. You won't be surprised to learn that I fully expect expect the debt bubble to pop by year's end.
    Originally posted by Carrieanne
    The government guarantees it all in NS&I. And that has been the case for decades. The OP's mother is 80 - so probably not in it for the longterm (but could be around for another 30 years or so if lucky I guess!) and specifically wants minimal risk.
    • eskbanker
    • By eskbanker 19th Jun 17, 12:48 AM
    • 5,466 Posts
    • 5,270 Thanks
    eskbanker
    However, my mother's money was all in Santander which of course is a Spanish bank, so that may or may not make a difference.
    Originally posted by IceTry
    Unless she actually went to Spain, her money will be with Santander UK plc and thereby fully protected under FSCS (up to £85K) as with any other UK bank - the location of their corporate parent doesn't come into it.

    I can't remember what happened with the Icelandic bank, but I don't think everyone got their money back when it went under.
    Originally posted by IceTry
    All UK savers did.
    • greenglide
    • By greenglide 19th Jun 17, 9:29 AM
    • 2,841 Posts
    • 1,820 Thanks
    greenglide
    All UK savers did.
    We did, indeed!

    If (when?) it should happen again I suspect that the government would not be as generous. We have been warned and I would imagine that the number of people who have over the guaranteed amounts is less than there was.

    If Barclays, Nationwide, Coop, ...... failed spectacularly would taxpayers who didnt have money in it want savers to be bailed out? The bail out of the savers and of the banks wasnt entirely popular last thim!
    • Linton
    • By Linton 19th Jun 17, 9:44 AM
    • 8,204 Posts
    • 8,074 Thanks
    Linton
    We did, indeed!

    If (when?) it should happen again I suspect that the government would not be as generous. We have been warned and I would imagine that the number of people who have over the guaranteed amounts is less than there was.

    If Barclays, Nationwide, Coop, ...... failed spectacularly would taxpayers who didnt have money in it want savers to be bailed out? The bail out of the savers and of the banks wasnt entirely popular last thim!
    Originally posted by greenglide
    The money is guaranteed, it's not something the government has to decide on the fly. If it wasnt guaranteed any whisper of bank being in difficulty could lead to a run on the bank which would ensure it did fail. And once one bank failed there is a danger of a domino effect endangering other banks.
    • greenglide
    • By greenglide 19th Jun 17, 12:02 PM
    • 2,841 Posts
    • 1,820 Thanks
    greenglide
    I was talking about amounts in excess of £85,000 which the government paid out in the Iceland mess.

    I have no reason to believe they would not meet the £85,000 guarantee in a future mess but not go above that.
    • dunstonh
    • By dunstonh 19th Jun 17, 12:27 PM
    • 89,502 Posts
    • 54,962 Thanks
    dunstonh
    That's your opinion and you're entitled to it. Mine is the original poster and his/her mother ought to invest more thought about the return of her money rather than a return on it. The government guarantees to return up to a maximum sum. That requires faith in politicians, and of course there's no backstopping with regard to its purchasing power. You won't be surprised to learn that I fully expect expect the debt bubble to pop by year's end.
    Originally posted by Carrieanne
    It isnt about opinion. it is about facts. You are recommending a risk based option that requires a volatile pricing to show a profit or a loss.

    That is not at all consistent with what the OP is asking for.

    Also, the FSCS is not funded by the Govt. it is funded by a levy on financial institutions. The Govt can lend money to the FSCS but this is a loan that has to be repaid by the financial institutions.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • IceTry
    • By IceTry 19th Jun 17, 3:10 PM
    • 23 Posts
    • 11 Thanks
    IceTry
    "You won't be surprised to learn that I fully expect expect the debt bubble to pop by year's end"

    What do you mean by that CarrieAnne?. Could you explain - I am genuinely interested how you come to this conclusion and what it might mean for savings and the market.
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