£12000 savings for 96 year old

grantmo

Hi

My gran has asked me if I could do something with her savings. She is 96 years old and has £12000 which is sitting in a normal bank account. I'm not sure of the best place to put it.

I know the ISA allowance is £5100 so I could put £5100 in an Isa.

Not sure about the rest or if she pays tax like everyone else?

I see egg do a 2.8% savings account but I'm not sure if she would get the full 2.8% as she is 96?

Any Help from you experts would be great

Thanks
Grant

CLAPTON

people over 75 have a tax allowance of 9640 before tax is due so if her income is less than that she could register for interest tax free (R85 form)

lisyloo

I think you should find out her tax status.
She may well not be paying tax unless she has a good pension.
This is because elderly people get extra tax allowances, and some benefits that older people are likely to get are exempt from tax.
But you need to find out.

I have my folks money with ING but you have to remeber that this is not covered by the Financial services compensation scheme.
This means if the bank goes bust then there is no scheme in place.
ING are a huge bank but we are in interesting times.

but I'm not sure if she would get the full 2.8% as she is 96?

What do you mean by that?
Do you mean she might die before a year is up???
Interest is accumualted daily.
So let's say she dies after 6 months, then she would get 1.4%.

So I would first check her tax status.
Then get the best deal you can with a bank covered by the FCSC and then her money is as safe as it can be.
If she pays tax you ought to look at ISAs.
Clearly at 96 she woudl want something instant access.

grantmo

Thanks for your replies

I'll have to check her tax status. She is on a pension but I dont think she gets that much. I don't think she will pay tax on her pension.

What I meant with the 2.8% was the egg account was 2.8% gross so she might not get that if she was taxed.

lisyloo

Yeah right.
She probalby doesn't pay tax.
Egg would automatically deduct 20%.

You have two ways round this.
Establish she isn't a tax payer and fill out the R85 declaration and give it to Egg. They will then NOT deduct tax.

If you aren't sure then it might be easier to get an ISA where she won't have to pay tax anyway.
Can't you get a better ISA than 2.8%?

grantmo

lisyloo wrote: »

Yeah right.
She probalby doesn't pay tax.
Egg would automatically deduct 20%.

You have two ways round this.
Establish she isn't a tax payer and fill out the R85 declaration and give it to Egg. They will then NOT deduct tax.

If you aren't sure then it might be easier to get an ISA where she won't have to pay tax anyway.
Can't you get a better ISA than 2.8%?

Yes I can get a 1yr fixed for 3.25% from coventry BS but the max I can put in is £5100 so that would mean I would have to put the rest in a normal saving account.

MacsReturns

lisyloo wrote:

I have my folks money with ING but you have to remeber that this is not covered by the Financial services compensation scheme.

Surely with ING you have the Netherlands' compensation scheme instead, which is higher than the UK one (IIRC 100,000 Euro vs £50,000)? Yep, I'm with a Dutch bank

@grant - if your gran is not a tax payer then there'd be no benefit to an ISA so chase rates elsewhere - but you really need the tax status and the income figures to be sure. GL.