In-laws £30k savings - can anyone help please?

margaretclare

nicknameless wrote: »

Thanks. It's not that they aren't concerned with growth, but rather totally risk averse and see the stocks and shares label as "i might lose all my money if recent experience is anything to go by".

Well, my recent experience says different. Savings in any form of cash savings account would have been gradually eaten away by inflation. Starting from zilch, my savings in a S&S ISA have recently just gone over £10K, that's in the last 10-15 years. The FTSE is now approx 5900. However, it's a mindset and you can't convince people who don't want to be convinced.

How did they manage to save the £30K in the first place? Didn't they take any risks at all?

Incidentally, ISAs are what they say - individual savings accounts. I assume the £30K is a total between the two of them? Plenty of scope there for spreading the risk. Bad thing to put it all in one place.

psychic_teabag

qpop wrote: »

Santander savings would pay them ~£78 a month in income, which may be welcome.

At the moment they can supplement that with up to £180 pa from Halifax using reward current accounts - IIRC, they can open one each plus one joint, and then just pass £1000 through each account per month to get £5 per month per account - can use standing orders to automate the process. Though I don't know how strict Halifax are about opening these accounts these days.

indie80

If they haven't used their ISA allowance for this year 2011/2012 and the following TAX year then they could affectively tuck away £21,960 ( £5,340 + £5,640 * 2) between them in the next two months where they'll get better interest than they currently are - all TAX free. It just depends how much they are going to want in the next year to live off of.

For ISA's take a look at:
www moneysupermarket com | savings | cash-isas |
www moneysupermarket com | savings | fixed-rate-cash-isas |
(as a new user it won't let me post direct links)

The more competitive cash ISA's tend to come out closer to the end of the TAX year.

If they can afford to it would be best for them to put their money away for a fixed period in an ISA as you get a much better interest rate.

qpop

indie80 wrote: »

If they haven't used their ISA allowance for this year 2011/2012 and the following TAX year then they could affectively tuck away £21,960 ( £5,340 + £5,640 * 2) between them in the next two months where they'll get better interest than they currently are - all TAX free. It just depends how much they are going to want in the next year to live off of.

For ISA's take a look at:
www moneysupermarket com | savings | cash-isas |
www moneysupermarket com | savings | fixed-rate-cash-isas |
(as a new user it won't let me post direct links)

The more competitive cash ISA's tend to come out closer to the end of the TAX year.

If they can afford to it would be best for them to put their money away for a fixed period in an ISA as you get a much better interest rate.

You may have overlooked this, but they're under the tax-paying threshold so ISAs are less of a priority than the top interest rates.

As an addendum to psychic teabags devious plan to squeeze maximum cash out of Halifax, IIRC R85 forms can still be provided, raising the monthly payment to £6.25

Mikeyorks

qpop wrote: »

IIRC R85 forms can still be provided, raising the monthly payment to £6.25

Halifax say 'it isn't interest' ....... so you can't use an R85. But you can reclaim the £1.25pm 'tax' direct from HMRC on an R40 after the year end.

nicknameless

thanks gang - any more ideas please keep them coming as i can then do a little bit of research and present informed options to them to get a little bit more money for them over the next few years.

nicknameless

margaretclare wrote: »

Well, my recent experience says different. Savings in any form of cash savings account would have been gradually eaten away by inflation. Starting from zilch, my savings in a S&S ISA have recently just gone over £10K, that's in the last 10-15 years. The FTSE is now approx 5900. However, it's a mindset and you can't convince people who don't want to be convinced.

How did they manage to save the £30K in the first place? Didn't they take any risks at all?

Incidentally, ISAs are what they say - individual savings accounts. I assume the £30K is a total between the two of them? Plenty of scope there for spreading the risk. Bad thing to put it all in one place.

yep that is a total between the two of them

calypso_rhapsody

If they are so risk averse that the really won't look at any form of S&S investment, then it may be that looking at RPI linked savings accounts might make sense. There are, i believe, a couple on the market at the moment - in links above i would think.

The best such accounts (at least for tax-payers, not sure how they compare for non tax-payers) are usually with NSandI although there are no available issues at present - may be worth keeping some money in accessible savings in case a new issue is announced (won't be befor next tax year). At least that would protect against inflation downside.

nicknameless

could anyone recommend some low risk profile S & S ISAs or equivalent that i might look at to talk to them about for a portion of their savings?

innovate

S&S ISAs should only be considered if you have a medium- to long- term investment horizon (5+ years, I'd say). Not sure I would recommend to 65+ year old people, with no apparent prior investment experience, to do anything other than exploiting the best savings accounts. They'd probably check any investment daily and could be suffering from huge anxieties if things go down for a few months - - as they can easily do.

If nicknameless is convinced the money should get invested, perhaps you can give them a guarantee, using your own money, that they won't lose anything of their initial £30K?