Last year I put 200k under my matress and my mate put 200k in Icesave.....

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I'd be extremely concerned about fire hazards with that amount of cash sitting in the house. I think I'd have to have fire blankets and extinguishers in every room or even better a fireproof safe

Bernard_Coleslaw

Aegis wrote: »

No, you have it exactly wrong. Here's the maths:

Person A:

Keeps £200k under the bed for 2 years.

End result = £200,000

It's worse than that, surely? A bit of modest inflation in the meantime would have nicely eroded the value of your paper currency.

Aegis

Bernard_Coleslaw wrote: »

It's worse than that, surely? A bit of modest inflation in the meantime would have nicely eroded the value of your paper currency.

Absolutely. I didn't factor that in because there's essentially no point in doing so for the purposes of the calculation. Inflation will scale down what each lump sum is worth by the same percentage, so the bank savings will still be worth the same fraction more than the mattress lump sum. All in all, the person claiming money was better off in terms of value under the mattress than in the bank was talking rubbish no matter how you look at it.

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It's probably a good idea to get around means testing. Both my late Grandmother and Great Aunt left huge stashes of cash (£1000s, some of it in really old notes) in carrier bags under the carpet in their homes when they passed away to avoid means testing. Luckily they tipped us off about it (but didn't provide us with the exact location) in their later years. Why they didn't just spend it on themselves instead I could never understand but I guess that was the mindset of that generation.