Parent With Savings

michmar72

My Dad (73) and Mum (63) have their pensions, house is paid for and they are lucky enough to have 18k savings, at the moment it is in a post office account.

Today my Mum said they are thinking about buying a house,for a family firned to live in, I don't think this is a good idea for two reasons, the whole buisness and pleasure thing and I am concerned if the property is empty how they would pay the mortgage and other bills? Being retired would they even get a mortgage?

I suggested that as its money they may need to get thire hands on, they put all in premium bonds.

Does anyone have any other suggestions on they can best invest their cash?

Thank you

Reaper

They both sound like terrible ideas to me. I can't see them getting a mortgage if they are not earning and even if they could why blow their pension on mortgage payments? I think the family friend should rent, after all they would anyway be renting off your parents.

As for premium bonds since they pay out 1.5% on average I can't see the point. Stick it in an ISA or if they don't need it for a while National Savings Index Linked Bonds - designed to last 5 years but worthwhile for less time too as long as they don't need the money for at least a year.

Loughton_Monkey

Any thought of buying a house with £18K savings are absolutely ludicrous. Even for a young couple earning huge money.

As to the savings, then they ought to be in some Internet account earning 3%. Or some in a higher rate fixed bond - or perhaps inflation-linked national savings. Not in the Post Office.

gvlewis

I would echo the comments already expressed.

It is always a good idea to have some money handy for unexpected events, particularly as you get older and develop health problems. I too would suggest investing in National Savings Index Linked Bonds which would be easy to access but give protection against inflation. Having your wealth locked away in bricks and mortar would cause a headache should you need the cash in an emergency.

dunstonh

Sounds like a bad idea so can only echo the above.

Not many would think that taking a mortgage out in your 70s to buy an investment property would be a good idea (mortgaged buy to let is a high risk transaction). Especially if you dont have much capital behind you already.

Premium bonds are rubbish for the majority of people. Especially those that dont have much.

atush

I agree, they are in no position to help out someone by buying a house. They could instead offer to rent that friend a room. In whihc case they would have a place to live, and your parents would be in receipt of income.

And if they don't need the income monthly, they should put some of that cash (ie say 15K)into an NSI ilsc. The other 3K could be on the highest easy access isa or savings acct.

michmar72

Thanks all, I'm glad you agree, at least I can tell them I got other opinions, cheers

ses6jwg

*Engages Gordon Ramsey mode*

OK. 18k savings. Nice. Go.

£10680. That's £5340, each, OK. Santander Flexible ISA, Go. Instant Access, Yes, 3.3.%, f*ucking lovely.

NS&I, Yes? Good. Index linked savings, high inflation, f*cking government, GO. 5 Years, but accessible.

Good.

18k. Done.

erdd2

What is the "fiends" position, responsibility, risk, need would concern me!

atush

Andhow close are these friends? will they have acess to cmputers, passwords and bankcards?

lisyloo

Or some in a higher rate fixed bond - or perhaps inflation-linked national savings. Not in the Post Office.

I'm interested to know what's so bad about the post office?
I put my folks money in the highest instant access savings account and in Feb I believe that was the post office at 2.9%.
They are 83 and we don't want to tie the money up. They have £13K and we would like them to enjoy as much of it as possible.
They have just had a new bathroom/kitchen and gone on holiday.

Is there something I should know aboutthe post office? or is that comment not necessarily correct in this context (highest instant access account)?