£35,000 to invest, best options?

EltonJohnFan

Hi all,

I'm writing on behalf of my grandfather who's just received a cheque from the Department for Work and Pensions and he says it's money he was due from deferring his State Pension. Anyway, he has around £35,000 and because he doesn't have a bank account he's looking to open one as a matter of urgency and deposit this money and not touch it until he's around 75 or so. I have made a point to tell him that he should think about enjoying life a little bit more after a lifestime of working and raising a family but he's adamant that he wants to put this money away and says that he is thinking about his wife (my grandmother) and if anything should happen then he wants the money to go to her.

My grandfather has also told me that he as an additional £15,000 or so in a Post Office Card Account that has accrued over many years and is asking if this might affect him in any way? he's an honest person and wouldn't willingly cheat the government. He doesn't have a regular bank account and like many of his generation says he doesn't trust banks but he is keen to find out more about putting this money away and getting the best possible return he can. I'm looking for any information you can share with me on this so I can pass on the information and hopefully point him the right direction, doesn't want any risky investments with his money and has made that very clear, says he can't risk his money for any reason. Thank you for your help

Primrose

You don't say what age your grandfather is now and how long he has to go until he reaches 75 but I assume he's older than 65. It would also help to know whether he's a taxpayer, because if he is, he should consider putting at least £5100 in a long term (5 year) Cash ISA this tax year where the interest would be tax free. After April 5th next year, he can use up around £5200 for another year's allowance (which is due to increase slightly. Alternatively, you could search around and find the best long term savings bond for him. If he's worried about the money being available to your grandmother if he dies, there's nothing to stop him putting the bond in joint names then the money would automatically divert to her.

Tell your grandfather that any savings up to the value of £50,000 per individual (£100,000 for a joint account) is currently protected in the event of a bank going bust, and from January 1st, that amount will rise to approximateljy £85,000 per person.

ukmaggie45

This doesn't really answer your question, but if your Grandfather wants his money to go to your Grandmother, should he pre-decease her, he should think about making a will. If he hasn't done so already.

If he uses a solicitor to do so, don't let them name themselves as Executors. Family or friends can do it as I understand. For a relatively simple Estate it's supposed to be relatively easy, and there is help available from the Probate Service. My parents named their solicitor as joint Executor with my OH, and in the end we had to get another solicitor to sort out the mess the named one left.

And Banks are reputedly even more costly.

But I do think since your Grandfather seems to have a considerable amount to leave that he should consider a Will. Maybe your Grandmother could think about it too? I think a lot of people don't want to think about stuff like this, so it's good your Grandad has at least indicated to you what he wants. OH and myself never had anything much to leave (or so we thought - but there's the house of course...). So we never had Wills until my parents died and we had to sort the mess out. It's taken a toll on both of us, and at a time when I was grieving. We don't want our kids to go through those kind of problems when we go, so we've now made Wills and I feel much happier.

sleepless_saver

EltonJohnFan wrote: »

Hi all,



My grandfather has also told me that he as an additional £15,000 or so in a Post Office Card Account that has accrued over many years and is asking if this might affect him in any way? he's an honest person and wouldn't willingly cheat the government.

Is he claiming any means tested benefits such as council tax benefit, housing benefit or pension credit? If not, then it's nothing to do with the government.

If he puts his money into a savings account that pays interest, tax will be deducted from that at source unless it's an ISA. If his income is less than the personal allowance (£9490 for age 65 to 74) then he can get the interest paid gross instead.

Remind him that if he keeps his money in accounts that pay no interest, it loses value quite quickly because of inflation (in just the same way as keeping it under the mattress;)).

sleepless_saver

ukmaggie45 wrote: »

This doesn't really answer your question, but if your Grandfather wants his money to go to your Grandmother, should he pre-decease her, he should think about making a will. If he hasn't done so already.
.

Good point, and it's Will Aid month in November so he can get a simple will made for the price of a charity donation.