Monthly Income for a Pensioner

stephenadarglas

Hi all

My father is 74 and has a lump sum of £20000 to invest in a rock solid investment (it's all he's got besides a small pension) that will provide a monthly income. He has no other savings.

Any advice or help will be much appreciated.

Regards

Steve

exil

OK.

Safest bet is an annuity. At 74 he could get £174 a month. That's equivalent to
a return of 10%. Assume he doesn't pay tax so would get it all.

Disadvantage? The capital is surrendered to the annuity company, so nothing
to leave to anybody at death. If this is no problem....

And the money can't be taken by the state to pay for residential care should he need it (though the income would)

codetown

If it is a more traditional saving account you look after (where you keep the capital and try to make it grow a bit), then I would reccomend the Nationwide Monthly Income 65+.

It is from a rock-solid institution, it gives 4.5% interest and a passbook and can be freely operated in any local Nationwide branch and also has a card.
So he can take money out very easily even without trasferring them to a current account.

To compare with what proposed earlier, on 20.000 pounds this will give you an interest of: 900 gross a year, i.e. 75 pounds gross a month.
If he pays basic tax then it will be 60 pounds a month of interest alone.

Of course the capital will always be there to take when and as needed in any needed chunks (as it is a normal savings account).