investing for a pensioner

cygnus

Hi
l hope someone can help me on behalf of my mum. She is in her early 70's and only income is the state pension up until recently she received income support to top up her pension. She has now sold her house and bought a park home and so has a lump sum of approx £20K which means she can no longer get the income support and will have to fund the difference herself from the 20K. Is this right? if so where is the best place for her to invest the money? Also ages ago l heard Martin on the radio talking about a website for the elderly which gave really good advice does anyone know what it is?
Thanks everyone,
Cygnus

margaretclare

Hi Cygnus

'Fund the difference' between what?

She's allowed to have a certain amount of 'savings' while still being able to receive pension credit. Have a look at this: http://www.ageconcern.org.uk/AgeConcern/fs48.asp

I would suggest that she 'maxes out' her ISA allowance first, as Martin advises, his 'money fountain' idea. She doesn't want to be paying unnecessary tax on the interest on her savings.

HTH

Margaret

dunstonh

She has now sold her house and bought a park home and so has a lump sum of approx £20K which means she can no longer get the income support and will have to fund the difference herself from the 20K. Is this right?

Yes it is correct. The current situation is that you have to do these things before you get benefits not after. Although the benefit in question is not income support but pension credit.

For example, if you invest in investment bonds before retirement, they are not included in the means test for pension credit. If you do them after, they are.

if so where is the best place for her to invest the money?

It depends on what she needs with the money. An annuity could be an option as this disposes of the capital but provides an income for life. The reduction in capital would bring her below the pension credit amount again but the increased income could take her above.