Savings help!

siross

Hi all,

I wonder if you could help.

Unfortunately my father passed away late last year and as a result my mother now has retired and with her pension and payout from the insurance she has a significant amount of money to put away.

She has just over £200k

She will want easy access to at least some of the money.

She may have a shortfall some months and may need to transfer money back from savings into her current account.

Am I right in thinking the best way would be to do the following:

£75000 in an easy access account (e.g. Tesco at 1.6%)
£75000 in another account (this could be a non easy access account if the rate was preferential)
£35k in another savings account
£15k in cash isa

We could then transfer money from easy access if needed and top up the isa on an annual basis with another £15k?

Apologies for the long post, it's very confusing!!

Thanks for any help in advance,

Simon

atush

IMHO, no.

All in cash is a recipe for long term disaster. As would be 100% invested.


You should, given the lack of knowledge, find a good IFA.

if not, give more facts such as her age any debt incl mtg, etc.

siross

atush wrote: »

IMHO, no.

All in cash is a recipe for long term disaster. As would be 100% invested.


You should, given the lack of knowledge, find a good IFA.

if not, give more facts such as her age any debt incl mtg, etc.

Hi, many thanks for the reply.

Age = 59
No debt, mortgage has been paid off and no car on finance etc...

Her monthly pension payments will be covering her bills and month to month living but she may need to dip into savings if she wants to go on holiday or any other larger expense...

bigadaj

I'd assumed your mother was older from your initial post, 59 isn't that old these days. She could well be looking at a good thirty years with that money to live on so seeing an ifa is likely to be worthwhile. With those sums I would have thought investing around £150k would be possible, with the remainder held in cash. Long term returns on investment should mean that your mother could draw say £5k a year to supplement income and still be optimistic about some capital growth, though as she is likely to be risk averse then drawing a smaller sum with lower risk investments may suit better.

atush

At 59, having all her money in cash is very unwise, as her Life expectancy (ie LE) will be 30 years or more and if 10 years or more, cash will under perform other assets.

We are not saying to invest all 200K, but as she has income as she needs, she should have some money (IMHO 50K) as cash, leave some invested as a pension (if some of the cash was in pension this would be easy) and some invested in S&S Isas and other assets.

But an IFA is needed here I feel.

unbiased.co.uk

xylophone

She is now around six years from her state pension?

https://www.gov.uk/new-state-pension/inheriting-or-increasing-state-pension-from-a-spouse-or-civil-partner

She can get a statement to help her plan.

On around £50,000 she can get reasonable rates with high interest current accounts.

She might wish to consider investment rather than savings with around £100,000.

Is she still working? Does she have a pension of her own? Even if not she can pay £2880 per annum into a personal pension plan and receive tax relief of £720.

An IFA could help her plan for the future.

https://www.unbiased.co.uk/

Al.

siross wrote: »

Hi all,

I wonder if you could help.

Unfortunately my father passed away late last year and as a result my mother now has retired and with her pension and payout from the insurance she has a significant amount of money to put away.

She has just over £200k

She will want easy access to at least some of the money.

She may have a shortfall some months and may need to transfer money back from savings into her current account.

Am I right in thinking the best way would be to do the following:

£75000 in an easy access account (e.g. Tesco at 1.6%)
£75000 in another account (this could be a non easy access account if the rate was preferential)
£35k in another savings account
£15k in cash isa

We could then transfer money from easy access if needed and top up the isa on an annual basis with another £15k?

Apologies for the long post, it's very confusing!!

Thanks for any help in advance,

Simon

Without anyone knowing your mum, or her needs, wishes and feelings, it's impossible to say what's best. A chat with an IFA needn't cost anything. The one thing that does strike me is that a large amount of her security has gone too; a slightly convulated route to arriving at a solution might be the order of the day.

siross

Thanks for all the advice guys. I'll let her know that a chat with and IFA is the way forward.

Al.

There are female advisers too, who might be able to empathise more with your mum. It doesn't make them automatically better of course, but sometimes, having a sense of the intangible does help. And you might like to be present too.

http://www.searchifa.co.uk/women/index.html

oatman

Fill up your Premium Bonds. OK, lousy rate but instant access. Put the rest away over various longer term dates and vehicles.