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

pleasedelete

I must be dense- I dont get it. She has £148,000. The capital will last 20 years or so at the rate that she want to spend it. How old is she?

jimjames

pleasedelete wrote: »

I must be dense- I dont get it. She has £148,000. The capital will last 20 years or so at the rate that she want to spend it. How old is she?

According to the reply she is 82.

Archi_Bald

FlossieandTwts wrote: »

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.

Her receiving an annuity doesn't mean you cannot care for her. It's just an agreed sum of money arriving in her account.

As I mentioned earlier, getting £8K p.a. out of £148K requires quite a lot of risk taking. You did not answer the questions how much risk your mum is prepared to take and what tax rate she pays. From the additional information you provided, I can guess she doesn't want more than low risk, and that she is currently a basic rate tax payer, so if you want to achieve £8K net, you'd need to get £10K gross. That means you would need to get about 6.8% return. This might be possible with high risk investments but will be totally impossible with savings in the foreseeable future if ever.

Looks she has no other alternative but to start using her capital. With an annuity, she could guarantee her monthly income but you'll probably find that managing the money in savings might suit her needs better.

She might be able to get around 3% gross for £50K in a number of current accounts, but the rest will be around 1.3% gross max. You also must make sure you don't have more than £85K in the same financial institution - see FSCS protection. The max interest after basic rate tax will be some £2,200 a year, declining as the capital declines.

xylophone

At £8000 a year she has enough capital to last until she is over 100 although this is discounting the effects of inflation.

She might use a mixture of cash deposits and stock market investments.



She might consider using her ISA allowance for this tax year and next in stocks and shares.

She might look for funds paying a monthly income - http://www.telegraph.co.uk/finance/personalfinance/investing/11040675/Revealed-The-top-investments-for-monthly-income.html

might be worth a read. Charles Stanley might suit as a platform.

She might consider a Santander 123 bank account - 3% on up to £20,000 and cashback on direct debits. She would need to pay in £500 per account month but this should be easily arranged.


She might want to consider the NS&I pensioner bonds.

The above would use £70,000 +.

She might then put £8000 into an easy access account and draw down £150 a month for her use, and the balance into a one year and a two year bond.

You could then take stock after a year?

http://www.thisismoney.co.uk/money/article-1621507/Best-savings-rates-Fixed-rate-accounts.html

G_M

She's unlikely to qualify at present, but have you looked at nhs Continuing Care?