Mum's pension - what to do?

kgall

Thanks yet again. I shall phone her two pension providers and ask what the possibilities for buying an income are. I am increasingly thinking that getting her to sit down with another (good) IFA or FA would be sensible. Is there any suggestedroutefor choosing one? (She is in Gloucestershire).

jem16

kgall wrote: »

I am increasingly thinking that getting her to sit down with another (good) IFA or FA would be sensible. Is there any suggestedroutefor choosing one? (She is in Gloucestershire).

Using https://www.unbiased.co.uk to search for those locally would be a good start.

dunstonh

Someone did explain to me why they could be good idea in certain circumstances, didn't apply to me so can't remember it but I think it was something to do with having a reasonable chance of a win with alot of bonds and the winnings being tax free?

In my case, it was someone that didnt want any risk based investments whatsoever. Didnt want to listen about shortfall risk or inflation risk but had just become paranoid about banks going under and investment risk.

The chance of a win is low. The average rate varies but when expressed in the same ways as a savings account it is around 1.5% currently (it is published). For a higher rate taxpayer, it can be beneficial.

I am increasingly thinking that getting her to sit down with another (good) IFA or FA would be sensible.

IFA not FA. FAs are restricted advisers. This could be a tiny insignificant restriction but in most cases it is a much larger restriction. Typically limiting providers to a handful or even just one. IFAs are not allowed to restrict.

atush

I think PBs are only reasonable for small holdings for a flutter, or for HRTaxpayers who have maxed out pensions and Isas perhaps.

Cygnus_Alpha

kgall wrote: »

Thank you all so much for the advice. It brought a tear to my eye that so many people took the time to be helpful. I must apologise for teh very long delay in replying - I was due in hospital the day after last positing for a minor op which turned into a rather longer stay than expected and I am only now just catching up with things.

My mum has decided not to draw her pension early and won't be investing more into it. In many ways it was the easiest thing for her to do without too much downside. I have to say, I was slightly disappointed with a financial adviser she went to see who advised her to put her £40k redundancy money into premium bonds.

I am now looking at whether paying off the mortgage of investing the money would be best (bearing in mind there is also the lump sum to come through next year when her pension starts). But should I also be considering an anuity? (I don't really understand them).

Thank you all again.
K

Buying an annuity with the £40k won't give you much income. But nonetheless it's worth looking into.

Paying your mortgage off - that depends on what interest rate you are paying.

Also it is not a bad thing to keep some liquidity and not tie up the entire £40k. Although your father wasting the money again might be a concern.

mumps

atush wrote: »

I think PBs are only reasonable for small holdings for a flutter, or for HRTaxpayers who have maxed out pensions and Isas perhaps.

Yes I do know a couple in their 80s, good pension, investments and a lovely house. They have the maximum of PB, I think this might be £50k. They seem to have a win most months, most small amounts but they have won £500 and £1000. The return isn't a big deal for them but they love it when they have a win. For someone who can't get out much and enjoy their money it might be worth it for more than just financial reasons but HRT might be significant for them.