HELP - my mother has 130,000 to invest and needs 8,000 a year income - any ideas??

FlossieandTwts

My mother has sold her flat and is living in extra care housing - she has lost her benefits now that the capital is released and she needs about 8,000 net a year income before she starts spending the capital. this is inevitable I think on some level and she has to cover her rent. we need some advice as to how to split the savings/investments to maximise her interest.

Many thanks in advance to anyone who passes comment - I,m very grateful.

catherine

Archi_Bald

You are asking for 6.15% after tax, which will be impossible to achieve without taking quite a lot of risk.

How much risk is your mum prepared to take (as in: how much would she accept to lose)? How old is she? What tax rate does she pay?

Vortigern

Ask an IFA about "immediate needs annuities"

xylophone

Are you saying that your mother needs £8000 net a year on top of any state pension/private pension/attendance allowance she may have?

How old is your mother?

atush

That is what I was going to say- what is her other income?

Vortigern

A friend with a parent in care recommended CareAware

I have not yet needed to use their services.

FlossieandTwts

Thanks so much all, for your rapid replies -

She has been on all the eligible benefits - housing benefit pension credit etc - Things have taken a bit of a downturn for her in the last four years - we lost my dad - she endured a gruesome lifesaving op - she bought a retirement flat which continued to charge her maintainence fees of £478 for the last 8 months and on selling have taken almost £10,000 in management fees and selling fees. in addition to the dip in the housing market she's lost almost £30,000 in four years. Because her flat is now sold(due to increasing care needs) and she is renting from a housing association @ £278 per week; and her savings total £148,000 she is no longer eligible for help other than the higher rate of attendance allowance that she gets.
We just want to maximise her income from savings/investments to ensure it doesn't eat into her savings too much. - she's 82 and is really concerned that she leaves something for us 5 children. She is my world. she gets £305.85 income per week currently (dad's pension, att allowance and state pension) - leaves her £29.81 per week.

colsten

FlossieandTwts wrote: »

she's 82 and is really concerned that she leaves something for us 5 children. She is my world. she gets £305.85 income per week currently (dad's pension, att allowance and state pension) - leaves her £29.81 per week.

I am afraid, leaving something behind for her children must take second priority after her own needs. She has £29.81 a week plus £148,000 in savings, which is a lot more than many other people have.

If she receives £305.85 a week, that makes £15,904 a year - a lot more than the £8,000 you originally mentioned. Are the £8,000 in addition? Ignoring inflation, and ignoring any interest, £148K would last for some 18 years if £8K gets drawn out each year. As has been suggested already, probably her best course of action to make the best of here money is to talk to an IFA about an "immediate needs annuity".

FlossieandTwts

Thanks for your reply Colsten

Wow! Can't help feeling that you had a bit of a go at me really - I am aware that her needs come first - I am a qualified nurse and health visitor and I have power of Attorney and am just making enquiries according to her wishes.
I have worked in the public and charity sector for 30 years and am acutely aware of her fortunate position in comparison to most of the people I have had the honour of caring for in my career.

I'm not sure I made it clear enough for you in my last post - yes she has £305.85p a week minus £278 per week rent leaves her £27.80 approx (or per annum £15904.0 minus her rent £14456) leaves £27 per week) without dipping into the lump sum. The £8000 i mentioned equates to approx £150 per week in addition to the £27 would take her to the same level of benefits that she was entitled to before the sale of her property. (presumably the gov deemed that income as a decent level for a woman of her age and severe disabilities).
Please do not misunderstand me - I am not suggesting that she should be entitled to or has a right to anything more than what she already has ( her state pension was based on her contributions and she worked full time other than maternity leave for us five - my father also worked full time all his life - as a child I remember acutely the extreme poverty. My father worked refusing to be registered as disabled having had a lung removed - working 7 days a week 12 hour shifts - their money was bitterly hard won. They were incredibly proud and determined and honourable.
It's just that I came on here asking for advice on how to maximise her interest so that she can draw down a monthly income and maybe safeguard as much as she can of her capital - I am aware that this may not be possible and have explained that to her. Personally I would help her blow every last penny on having a good time - (but then we get into deliberate depreciation and that's a whole other topic) Is it so wrong of her to want to get as much interest as she can - She not an HSBC tax evader/money launderer or banker - just an elderly woman who struggles to keep upright ~44 times in A+E in 12 month)
She doesn't need 'immediate needs annuity' yet,in fact not ever - I will care for her until my last breath.I am unwilling to surrender that honour.

FlossieandTwts

Thanks Xylophone
she's 82yrs
Rent = £278 per week/£1112 per month
Current pension/state pension/att allowance = £305 per week
that leaves her £27 a week - she needs more than this for transport/food/ telephone/ council tax/ household cleaning, repair clothes, disability equipt etc - Just want to maximise income from savings so that she feels she's not depleting the capital too much.

xylophone

How old is your mother?

What exactly does the "extra care" flat provide?

Presumably there will be an increase on her widow's pension - state pension and AA will both increase in April.

Do you have Power of Attorney for your mother?

Does she have the best current account for her needs?