160K to invest from house sale help

MoneyPleaseHelp

Hello

My grandmother died and left my mum and dad her house. This has now been sold and they have £160k to try and maximise so they ask me for advice. So i ask you :-)

They own there house and are both retired have no savings or debts. They get 880 pension per month

This was as far as i got

Santandar 123 account keep 20K there and pay bills from account they have dd
2 X Santandar 123 2 year ISA (in July this would be £30K)
1 TSB classic plus £2000

then I get a little stuck. They only need enough cash in an instant savings account for emergency i was thinking £3 to 5K

They are over 65

many thanks in advance for any help

Wilkins

So far, so good. This is savings, though, not investment. If they are comfortable with a little risk, then you could go for some index funds or investment trusts for perhaps 20% of the total. The rest could be put into cash term deposits of varying maturity.

masonic

MoneyPleaseHelp wrote: »

1 TSB classic plus £2000

They can each have 2 of these (and a joint account I believe), with monthly £500 standing orders to cycle money around them to meet the funding condition.

MoneyPleaseHelp

Thank you :-) will take a look at cash term deposits

dunstonh

Are they looking to invest or save? Currently, they are looking at savings options and not investments.

What do they want to do with the money? (i.e. what are the plans for it)

MoneyPleaseHelp

They want to use some of the interest to top up their pension, the rest just put away and try and make as much money out of it. They don't need the money unless there are any unforeseen circumstances.

invest or savings i guess what ever is likely to be best return but not to risky

MoneyPleaseHelp

From my understanding as the total pension is 880 per month . They would not pay any tax on the savings or investments as the would be under the £10K per year (£20K for both)

dunstonh

MoneyPleaseHelp wrote: »

They want to use some of the interest to top up their pension, the rest just put away and try and make as much money out of it. They don't need the money unless there are any unforeseen circumstances.

invest or savings i guess what ever is likely to be best return but not to risky

Investments have investment risk but are less likely to suffer inflation risk and shortfall risk.
Savings dont have investment risk but are more likely to suffer inflation risk and shortfall risk.

using savings only to supplement income is quite a risky option unless very late in life. £160,000 today with interest drawn to supplement income will have the spending power of about £100,000 in 10 years. The interest it generates will be less in real terms too. When that happens, people then tend to draw capital and that results in lower interest and more capital is required and the spiral downwards begins until ultimately, the money runs out.

Subject to age, they may find a combination of savings and investments is the best option.

MoneyPleaseHelp

Is there any investments you suggest i research ?

dunstonh

MoneyPleaseHelp wrote: »

Is there any investments you suggest i research ?

No. 1) I cant because I am regulated by the FCA and it would be a breach if I did. 2) you havent given enough info to go on to do it anyway. All we can do at this stage on a discussion board is give generic information.

you need to ascertain your parents risk profile and capacity for loss. Look at their future needs. Consider what they have, look at inflation etc and then decide what is best to achieve what they need within all of that.