Stepped Income savings

Jannyt_2

My mum, who is in her 70s, has a stepped income account with Halifax which is due to expire. She relies on the monthly income which she gets from it and does not want to switch to an account where she loses this income. Looking at the account the interest rate is 4% for the 1st year, and then goes up in half % increments until the end of 5 years when the monney is then released. Does anyone know if this is a good investment or if there is anything else out there which is similar which will give a better income.

jon3001

Jannyt wrote: »

Does anyone know if this is a good investment

Personally I'm not a believer in using deposit account/savings as a generator of income. The inflation risks and risks of interest rate variations are too great.

I'd be looking at investing in a spread of income producing assets such as: equity income, high yield bonds, corporate bonds, REITS/property funds.

VCTs (with their high dividends) could be worth including too.

opinions4u

Jannyt wrote: »

My mum, who is in her 70s, has a stepped income account with Halifax which is due to expire. She relies on the monthly income which she gets from it and does not want to switch to an account where she loses this income. Looking at the account the interest rate is 4% for the 1st year, and then goes up in half % increments until the end of 5 years when the monney is then released. Does anyone know if this is a good investment or if there is anything else out there which is similar which will give a better income.

The AER is 5% for 5 years.

This is there or thereabouts for a 5 year savings plan and does allow early closure subject to a penalty after 6 months, but no withdrawals.

Product detail linky.

Take a look at www.moneyfacts.co.uk to see what else is out there though.