£20k need to invest

Doomcow

true a7man, but if you are 61, not to sound ageist, but many people just want a bit of an easy life, and make sure that theres enough for those special moments, like taking the kids out for a weekend and so on, but you get my jist.

yes there are many assumptions in what i say, but its still valid for the majority of people who dont want the hassle of funds / stocks / shares etc... everyone says they want the greatest return, but that brings the greatest risk.

anyway, jeffy22, i'd still pump at least the first 3600 in a cash isa with a decent rate and some in a fixed account followed by a basket of funds for rainey days and emergencies. ok, as dunstoh says, this might not be the best for tax purposes, but it'll give the best piece of mind that the money is relatively safe and theres easy access to fast cash if need be (say the car broke down or the roof fell in).

personally as he has no other savings id shy away from stocks, shares, funds and the likes.

if you feel 10k is too much for an instant access acct, then put another 3600 into the ISA in april (or less then top up later in the year).

no mess, no stress approach.

www.moneysupermarket.com for a comparison. for ease of access, check out other threads on these boards, and if all else fails, stick to the big well known british banks / building societies, since the govt are least liekly to let these go pete tong - like royal bank of scotland, halifax, northern rock, yorkshire, nationwide, clydesdale etc.

dunstonh

When is his next pension credit review? Will the money see his pension credits wiped out?

Doomcow

premium bonds are safe yes, but you have to win to get anything.

nothing wrong with buying a few £100 on the off chance though, but i wouldnt put all the money into it, it'd be more of a fun to do thing, like the lotto but you get your money back at the end of the day.

Doomcow

pension credits - just reading into them..

maybe you could get round by you saving for him - but you'd need to have a good relationship, be disciplined and realise its not your money.

jamesd

For those not in a care home Pension Credit calculations assume £1 in weekly income for eveery 500 in savings over 6,000. So they will assume £28 a week in increased income for him and this is likely to reduce his Pension Credits.

Doomcow, benefits fraud isn't an acceptable recommendation here. Your other suggestions are equivalent to recommending growing poverty over time because they won't even keep up with inflation. If you want safe you should be considering suggesting index-linked National Savings Certificates.

jeffy22, Premium Bonds won't lose the capital but also won't keep up with inflation, so the money will gradually decrease in value over time. For this year they aren't too horrible but with inflation expected to rise in a year or so he'd be better off in index-linked National Savings Certificates.

He'd really probably be better off with a mixture of investments in a stocks and shares ISA and some of the National Savings Certificates. The S&S ISA could hold three funds, for example:

1. Corporate bonds (not savings bonds)
2. UK Equity income fund (something like Invesco Perpetual Income)
3. Global growth (something like Neptune Global Equity)

These do go up and down in value but they are the way to go for trying to keep up with inflation long term. He might go with this sort of split:

3600 cash ISA this tax year
3600 cash ISA next tax year
3600 S&S ISA this tax year
3600 S&S ISA next tax year
5600 NS&I Index-linked National Savings Certificate

With just 36% in investments that move up and down that should be a pretty stable mixture overall. The cash ISAs provide for certainty and immediate spending and availability money; the National Savings Certificates provide some growth over inflation and certainty, with easy access if needed; the investments provide an attempt to keep up with inflation, easy access if needed but some ups and downs.

Only the investment part has a chance of getting more than the 10% growth and income he needs to keep up with the rate at which Pension Credits assumes he's making money. If he wants to do that he should be putting more into the S&S ISA, shifting some from the cash ISAs to do it.

Ultimately, unless he's only getting a little in Pension Credit, the Pension Credit rules are going to gradually drain away most of this money and leave him with no more than 6,000. It'll take 10-20 years to do that, depending on just how well his investments do. If he's getting more than £28 in Pension Credit it seems that he'd lose that much and end up needing to find almost £1,500 a year himself from savings to keep the same spending.

Any health issues (yes is a good answer here, if they reduce his life expectancy)? I'm trying to get a good idea of whether pension payments plus an annuity purchase with the pension money might be worthwhile. How much does he get in Pension Credits, exactly, so it's possible to know how much he's at risk of losing?

Is he getting any other means-tested benefits?

Does he have a wife? What is her situation?