OAP Savings

Bald_Hedgehog

Hi
I'd like some opinions on my Mum's circumstances.
She's a standard little old lady.
Age 88, lives in her own house, widowed.
She has her pension for income and about £25k savings. This is sufficient for her needs.
It's what to do with her savings that I'm concerned about.
Lloyds have just persuaded her to put the £5100 max in an ISA. However, as she is a non taxpayer, is there any benefit in that?
She likes to have instant access to her money.
I'm not over impressed with Lloyds as they have dropped the interest on her savings account to 0.1%

Any ideas much appreciated.
Thanks
Dave

pressuredrop_2

1. Is the ISA pointless? Probably.
2. 0.1% interest on savings? Move it, would be my suggestion.

margaretclare

Any ideas? Only this - don't be persuaded by anybody about where to put your money. Especially not by anybody at a bank - they obviously have an axe to grind.

If your Mum is completely out of the tax bracket - annual income less than £9K or thereabouts - then yes, probably an ISA is pointless. The only point of it would be if the annual interest added to her pensions income took her back into the tax bracket.

There are accounts which pay more than 0.1%, but it's a question of looking around to find them. I have an account with the Market Harborough BS which is paying 2.20%. Most of my savings go into the S&S ISA with Hargreaves Lansdown but this is not easy access.

amcluesent

>Any ideas much appreciated.<

Probably a good time to sign an affairs lasting power of attorney while she has her faculties, then you can run her savings over the web and get 2.5% to 2.8% with no penalty.

TBH there's no obvious reason why someone aged 88 needs £25K to hand, you'd get 3% online with a limited number of withdrawals per year.

margaretclare

amcluesent wrote: »

>Any ideas much appreciated.<

Probably a good time to raise enduring power of attorney while she has her faculties, then you can run her savings over the web and get 2.5% to 2.8% with no penalty.

As I understand it, having enduring power of attorney DOESN'T give you the ability to play around with her savings.

She could look on the web for herself! Members of the 'silver surfers' group that DH is a volunteer for, do this without trouble. Even if they haven't a computer, they can use the ones at the library.

Wanting instant access may be a problem. Better rates usually from a traditional BS, but there are fewer of these on the high street since so many have amalgamated. Have a look at this: http://www.moneysavingexpert.com/savings/savings-accounts-best-interest

martinman3

Sorry, but I disagree with those comments about this ISA being pointless.
Currently, if you want branch access then instant access ISAs are way better than taxable accounts.

The Lloyds Cash ISA Saver that I assume your mother has pays 2.50% AER which is good, and I would put another £5100 in it as soon as possible for the new tax year after 5th April. The only point to mention is that there is a bonus of 1.50% for the first 12 months from account opening so she will probably need to move it after that.

Jake'sGran

I am getting 3.5% with EGG with instant access but like most savings accounts like this it includes a bonus that will end in August i.e., after twelve months. Last night I had a look to check something else and noticed their current instant access is paying only 2.5%. These are not ISA accounts.

This week there has been a lot of negative comment in the press about banks not playing fair with the accounts which include a bonus. I have just read that the two worst banks are part of Lloyds TSB which we all now own. I don't buy cash ISAs because until I am 75 the tax free pay for me is £9490.
This gives me plenty of scope to earn gross interest on non ISA accounts I also buy high yielding shares and the tax is already deducted from the dividend.

You should get your Mum to move her money to one paying a better rate and
usually this means not an ISA. Have a look at the list at the top of this section BEST BUY GUIDES SAVINGS ACCOUNTS..

Biggles

margaretclare wrote: »

As I understand it, having enduring power of attorney DOESN'T give you the ability to play around with her savings.

Signing one now is always a good idea.

If she were to sign a Lasting Power of Attorney now, she could give him the ability to open savings accounts for her (but doesn't have to).

If she didn't, and she lost mental capacity before signing one, he would be unable to take any actions without going through the Court of Protection.

margaretclare

Biggles wrote: »

Signing one now is always a good idea.

If she were to sign a Lasting Power of Attorney now, she could give him the ability to open savings accounts for her (but doesn't have to).

If she didn't, and she lost mental capacity before signing one, he would be unable to take any actions without going through the Court of Protection.

Yes, I'm aware of the value of an EPA. DH and I have one for each other, but that doesn't mean we meddle with each other's savings!

Biggles

margaretclare wrote: »

Yes, I'm aware of the value of an EPA. DH and I have one for each other, but that doesn't mean we meddle with each other's savings!

Hence the careful wording of my second sentence!
;-)

Bald_Hedgehog

Thanks everyone for your responses to my questions.
It gives me something to take back to my Mum. Then comes the difficult bit - getting her to listen to me rather than some bandit on commission.