Advice please on my mum's savings

Lynt_3

My mum (82) is relying on me to advise her on how to manage her savings :eek:
:rotfl:
She thinks I know more than she does!

She opened a Monthly Income Account with Principality a few years ago.
She presently has £65,000 with them. The interest rate is poor now.
She has to give 60 days notice for withdrawals so as not to be penalised.

She is a bit suspicious of internet banking, but I think I can persuade her.

She has already made 2 withdrawals in the past few months.
What is the best thing to do.
If she removes all her money in the near future, will she lose all the interest?

I feel sorry for her, thinking that she can rely on me to advise her.:(

So what would you guys advise?
Any thoughts MUCH appreciated.
HELP!

Lyn x

opinions4u

Lynt wrote: »

My mum (82) is relying on me to advise her on how to manage her savings :eek:
:rotfl:
She thinks I know more than she does!

She opened a Monthly Income Account with Principality a few years ago.
She presently has £65,000 with them. The interest rate is poor now.
She has to give 60 days notice for withdrawals so as not to be penalised.

She is a bit suspicious of internet banking, but I think I can persuade her.

She has already made 2 withdrawals in the past few months.
What is the best thing to do.
If she removes all her money in the near future, will she lose all the interest?

I feel sorry for her, thinking that she can rely on me to advise her.:(

So what would you guys advise?
Any thoughts MUCH appreciated.
HELP!

Lyn x

I know little about the Principality so can't advise specifically on the account - gut reaction is that she should be able to make as many withdrawals as she likes without interest loss, as long as she gives notice.

A couple of other thoughts, given Mum's age:

1) Does anybody have a POA to look after her affairs as she gets older? If not, see a solicitor and arrange it as it can make life easier if her mind deteriorates with age. If hse remains sharp, you simply never use it. I'm assuming there's a will - if there isn't do this at the same time!

2) While the thought of paying for care may not be in your minds at the moment, it is possible that one day Mum may need to pay care home fees out of her savings. If she has no plans to spend her savings, she could consider giving away money to family members regularly - starting now. This is something best done by discussion with those who are likely to inherit. Making any funds remaining with Mum joint accounts can also make things easier later on.

From personal experience, I wish I'd done all these things with my Grandmother a lot earlier!

Lynt_3

opinions4u wrote: »

I know little about the Principality so can't advise specifically on the account - gut reaction is that she should be able to make as many withdrawals as she likes without interest loss, as long as she gives notice.

A couple of other thoughts, given Mum's age:

1) Does anybody have a POA to look after her affairs as she gets older? If not, see a solicitor and arrange it as it can make life easier if her mind deteriorates with age. If hse remains sharp, you simply never use it. I'm assuming there's a will - if there isn't do this at the same time!

2) While the thought of paying for care may not be in your minds at the moment, it is possible that one day Mum may need to pay care home fees out of her savings. If she has no plans to spend her savings, she could consider giving away money to family members regularly - starting now. This is something best done by discussion with those who are likely to inherit. Making any funds remaining with Mum joint accounts can also make things easier later on.

From personal experience, I wish I'd done all these things with my Grandmother a lot earlier!

Thanks for the reply opinions4u (great user name )
If she takes out more than 20% of her savings, I think she loses the interest on that amount. So she would lose all the interest onthe 65k is she takes it all out. Something around £190, I think.
We were talking the other day, about me handling her affairs, so I may see a solicitor re POA. She has a will, so no problem there.

I just want to do the right thing for her, re her savings (which will go to me and my brother one day, if she doesn't spend it all before then! I wish she would to be honest. She deserves some fun in her life, bless her)
I had thought about joint accounts, but was concerned how that would affect my income tax.

I just feel we should move out of Pricipality to somewhere with better interest, but not sure best thing to do. Mum worked hard all her life for her money.
Thanks for taking the time. Much appreciated.
Lyn

Reaper

Here are some suggestions to get you started.

Firstly, put in a withdrawal notification request for the full amount in 60 days time. Assuming this building society has the same policy as the others I have encountered you can cancel the withdrawal any time during the 60 days. Indeed some people regularly hand in withdrawal notices they have no intention of going through with "just in case".

If you get the current advertised rate then it is 5.01% AER, or 3.92% Nett. Does she pay income tax? If not fill in form R85 so that the interest payments are tax free, if she has not already.

I doubt that it is worth the loss of 60 days interest to move it to a better account, so I'd suggest waiting. The only reason for moving sooner is if she is worried about being above the £50,000 guarantee the government offers savers in case the company folds. If so then move £15,000 out now and the rest later.

As the 60 days draws near look around at the current interest rates. If she has no intention of using all the money then how about some of it in a fixed term/fixed interest account which tend to pay better rates, and the rest in instant access so she access it easily whenever she wants.

As opinions4u says there are also considerations for managing her money and inheritance tax as she gets older.

Lynt_3

Thanks very much Reaper. Some good advice there.

I forgot to mention, that mum will be out of the country, after mid November, for at least 6 months. She is being very brave, and flying to the other side of the world!
This means, that she won't be here to sign anything when opening a new account. Won't be a problem, if it is an internet account
I guess this is where the POA comes in.

Cheers for your time.
Lyn

Reaper

When opening an internet account they often ask for some form of identity/address to be posted to them, such as a Council Tax or utility bill. So make sure you have access to them if she is opening it while out of the country.

Best of luck to her on her travels, I'm sure she will have a great time.

Lynt_3

Thanks. She is going to NZ to stay with my brother. They will be on the beach on Christmas day, while I will be here fretting whether or not to switch on my (VERY expensive) oil central heating!

She lives with me. All the bills are in my name.
She will have her passport with her. So not sure how to get round that.
I guess we could open an account now, and then all I have to do is transfer money over.
Does that sound like a plan?

Gawd! I wish I knew what I was doing! :rolleyes:

Cheers for your support.

Jake'sGran

Oh, how wonderful for your mother to be having such a long holiday in such a lovely place. Believe it won't be as hot as Australia which she will probably be glad of. I would give the full notice too and then put it in a UK bank or building society in which you have confidence. I have just put a large sum in the Kent Reliance building Society. The account is paying 6.45% with instant access. From Tuesday the guarantee of her money being secure is a max of £50000.00 so you could perhaps put it in two separate accounts. Birmingham Midshires have a one year fixed rate paying 7%. On the front pages of this site Martin lists the best accounts.

Lynt_3

Thanks Jake'sGran. Some good ideas. Yes, lucky mum going to such a beautiful place.

I had long chat with her, trying to persuade her to open an e saver account, because of better interest. She decided to decline because if I suddenly drop dead :eek: she wouldn't be able to access her account.
She's got a point.
I was feeling quite well and healthy, til she said that :rotfl:

I will need to look at passbook accounts. Phone account no good, because she is deaf!
Looks like Post Office, or a better account with Principality, both just 4 miles away ( I will still have to drive her there)

Thanks guys.

Jake'sGran

Hello again Lynt, My husband would be exactly the same as your Mum if I popped
off - and I do have a serious heart condition - so I have written everything down for my daughter who is one of my executors. She will be the main one really and will get a good inheritance. Her husband is being a bit weird lately so I don't like the idea of him spending my money but...that's life. It's a shame about not being able to have telephone accounts as some of them are paying good rates.

Lynt_3

Hi Jake'sGran
I am going to look into postal accounts. It is a shame she won't go for e-savings, but I can understand her reasons.
Maybe putting something in a Principality Fixed account, could be a start, and then a postal somewhere else. But where??
Having even a small amount of money, is a headache these days isn't it.

She will have to give 60 days notice to Principality first. I just thought we could open an account now, and just put in a tiny amount, and then, I could transfer on her behalf, while she is sunning herself on the other side of the world.
Oh, I don't know..............