Investment for grandma?

superflygal

Hi folks,

Grandma has £100,000 to invest.

Can anyone suggest a safe place for this cash?

She needs instant access, or not too long a tie in.

Thanks x

innovate

Firstly: "instant access" and "investment" are incompatible. For investments, you need a 5+ years horizon. Everything else is "savings".

So let's assume we talk savings. But: surely your grandma doesn't need instant access to all £100K?

Is she a tax payer?

The answer is probably to spread the money over a number of different savings accounts, some instant access, some 2-3-4-5 years fixed term (still can have the interest paid monthly). If she is a tax payer, £5,640 should go into a cash ISA this financial year, similar amount next, and so on.

All savings accounts need regular review for interest rate changes.

BTW, do not keep more than £85K (incl allowing for interest) in any single financial institution. If your bank goes bust, anything over £85K might be lost.


Can grandma manage her financial affairs herself? does she do Internet banking? Do you need to help her regularly? Do you have a POA?

jimjames

How old is "grandma"? The term could refer to someone from their 40s/50s to 80s or more.

The advice would be very different for each age but as above investing is not for instant access.

jamesd

Say more about what she means by "safe". Will she accept the value decreasing due to inflation, or taking no income to keep up with inflation? Will she accept any part of it in investments where the value averages going up by 5% plus inflation but goes up and down by 10% a year, by 20% a year or by 30% a year as well?

superflygal

Hi folks,

Yes she is a taxpayer. she is 60s. she wants access as she might move to a new property, and doesn't want cash tied up with penalties.

SFG x

jamesd

How soon is might? If it's within five years she should stick to savings accounts. If it's longer term then use of investments as well for part of it could be fine. Investments don't usually have explicit penalties, just the risk of being in a down time when there's a need for the money.

If it's because she's worried that she might not be able to cope in her current place I think it's better to move sooner rather than later, while she's still able to handle the stress of moving relatively easily. Then she can pick a place that will be good for her later and not have the added disruption of moving while also dealing with things like limited ability to move around.

sabretoothtigger

I would say get those inflation certs and if she has to cash it early and get zero then so be it but thats not a penalty exactly. Sounds like its all or nothing thing and she doesnt need this cash every day or this year even.
I think its capped anyway so will need a normal access ac for the rest