Mums Finances

mjr600

A year has past since my father passed away and all the financial affairs are now sorted out. I have had a good read of the advice available on the site and would be grateful of your advice on our plan for my mothers future finances.

She is still working, although passed retirement age, with the state pension, private widows pension and her salary she takes home £2000 a month. This would drop to nearer £800 a month if she gave up work (3-5yrs away).

She has £225,000 in the bank, in an account that pays next to nothing at the Bradford and Bingley, £3000 in a Bradford and Bingley Isa and £55000 outstanding on a Bradford and Bingley mortgage (she's the old fashioned perfect customer).

At some point in the next two years it is likely that about £100000 will be spent on a property in southern Brittany but until then she wants to ensure that her money is working as best it can.

So the plan is to pay off the mortgage, save what would have been spent on the mortgage and try and follow the 3 tier saving scheme Martin suggests on the site.

What would you do with the £170000 remaining until the purchase of the French property to ensure the best return.

Thanks in anticipation

Jake'sGran

mjr600 wrote:

A year has past since my father passed away and all the financial affairs are now sorted out. I have had a good read of the advice available on the site and would be grateful of your advice on our plan for my mothers future finances.

She is still working, although passed retirement age, with the state pension, private widows pension and her salary she takes home £2000 a month. This would drop to nearer £800 a month if she gave up work (3-5yrs away).

She has £225,000 in the bank, in an account that pays next to nothing at the Bradford and Bingley, £3000 in a Bradford and Bingley Isa and £55000 outstanding on a Bradford and Bingley mortgage (she's the old fashioned perfect customer).

At some point in the next two years it is likely that about £100000 will be spent on a property in southern Brittany but until then she wants to ensure that her money is working as best it can.

So the plan is to pay off the mortgage, save what would have been spent on the mortgage and try and follow the 3 tier saving scheme Martin suggests on the site.

What would you do with the £170000 remaining until the purchase of the French property to ensure the best return.

Thanks in anticipation

If she is averse to risk it might be best to put it in a high interest internet savings account with easy access. Some are paying around 6% now (e.g. Ice Save 5.7%) but look at the best buy tables. In her shoes, I would put the full amount in an ISA each year either £7000 in equities or £4000 in equities and the balance in a cash mini ISA. She may not like the idea of being invested in the stock market though. It all depends on her attitude to risk. Many of us on these boards have done well by investing in Unit trusts etc but if she is uncomfortable with that she'd be best to go for the savings account.