Best high interest savings account or investment for 82 year old

janterry

My father (82 yrs old) has just taken his life savings out of a With Profits (that's a laugh!) Bond with Abbey. He had 40k invested but now has only 36k left. What is the best savings or investment account for him to put his money into now. He needs to have a monthly income from his savings and obviously doesn't want to take any risks with what money he has left.

baldbloke_2

Can you do better than taking Monthly Interest on a Fixed-Rate Bond from a Building society or similar. If you check the latest offers they seem to be around 5% - Saga are offering just above that and somewhere like the Skipton BS or Chelsea BS seem to offer regularly high interest Bonds.
The result would be say 4% net on £40k = £1600 (ish) or about £130 pcm.

There would be no risk and you can review the investment each anniversary.
I see little point in making things more complicated for this level of investment if no risk is acceptable to your father.

Try https://www.moneyfacts.co.uk for your research.

Chadsman

Make sure he puts £3k per tax year in an ISA.

It may be worth him considering giving away some to avoid Inheritance Tax.
Not advice.
DYOR

codetown

Nationwide 65+; simple, easy to use, no risk and available both high street and via cash machine widraw. Not top interest (I think around 4.6% gross), but still interesting to have some savings building up and easy access instantly.

janterry

Many thanks for your replies. We will certainly look into all of these options. Any more suggestions will be welcome.

Mikeyorks

Reading between the lines - sounds as though this is his sole income other than pension? In which case it is possible that the income from the £36k (wherever you put it) will not push him into tax? If that's the case make sure you file an R85 in order the interest is gross - and check if there's any tax refund, for the same reason, due for previous years.

If the tax situation is as anticipated above - an ISA is not the right vehicle!

lisyloo

The highes paying account is the HiSAVE account from ICICI bank
The rate is 5.15% and it pays out monthly.

http://www.icicibank.co.uk/index.html

There were initially some issues with service but this may have been down to lots of people applying when it first came out.

You will need to get a certified copy of a passport or driving licence and some people have found this difficult.

I don't understand the previous comment about the ISA.
If his income is possibly pushing him into paying tax then I would have thought that putting £3K into a cash ISA would be a good idea as the income is tax free.

Mikeyorks

lisyloo wrote:

I don't understand the previous comment about the ISA.
If his income is possibly pushing him into paying tax then I would have thought that putting £3K into a cash ISA would be a good idea as the income is tax free.

Don't think it could have been much clearer?;) The OP is lacking in that sort of detail - yet it is significant when considering the additional age allces involved. An ISA is not a panacea in all cases and misses the basic requirement of 'monthly income'??

If the tax situation is as anticipated above - an ISA is not the right vehicle!

lisyloo

Don't think it could have been much clearer?

Sorry it is still not clear to me.
(Genuine apologies if I'm being thick).

If this persons income is about to push him into paying income tax then he should seek to avoid this.
One mechanism would be to put £3K into a cash ISA as the income from ISAs are tax free.
Are you saying this isn't the BEST mechanism.
As far as I can see it is ONE mechanism.

and misses the basic requirement of 'monthly income'

I don't believe it does.
There are many instant access ISAs that you can make regular withdrawals from (not necessarily all of them).

If the tax situation is as anticipated above - an ISA is not the right vehicle!

It would be really helpful (for me and possibly the OP) if you could expand on this and say what the right vehicle might be.
As far as I can see an ISA has tax free income and allows a regular income to be withdrawn. The only failing is the £3K per year limit.

Mikeyorks

No - I'm not saying an ISA is not a suitable vehicle if one pays tax. What I am saying is that the taxation position is entirely unstated - but - reading between the lines, and taking the OPs father's age into account ......

He needs to have a monthly income from his savings and obviously doesn't want to take any risks with what money he has left.

.....he is probably not paying tax. And I then cited that probability when making the ISA remark.

In any event - I don't consider that an ISA in any meaningful way meets the 'monthly income' requirement? A best easy access ISA is going to yield around 4.5% which equates to just over £11 monthly (the £3k limit is not a failing - it's a fact). Any withdrawal over that leads to erosion of capital. Your ICICI suggestion (tax situation assumed negative - again) is a much better bet - and particularly if gross interest is appropriate.

But a cash annuity might be more apt - but it's an area I'm totally unfamiliar with and was hoping someone more expert would slide that in. But that does depend on the OP attitude to giving up the capital / inheritance expectations.

Ted_Bloke

codetown wrote:

Nationwide 65+; simple, easy to use, no risk and available both high street and via cash machine widraw. Not top interest (I think around 4.6% gross), but still interesting to have some savings building up and easy access instantly.

Look too at Coventry BS 65+ offering 5.25% for first year only. If it's not too complicated he could feed in up to £2,000/month . Makes him all of £78 (if not taxpayer) richer than Nationwide after a year.
Not thrilling but that seems to be the sort of money we're talking about.