Help! 200k to Invest!

Sunday_Girl_2

Hello, hope someone can help...
Lost my Dad recently, and my Mum's got 200k to invest - Early pension payout etc.
She's 56, just about to go back to Full-Time work, but will need 90k in 7 years to finish paying off the mortgage.
Are there any investments she could make to live on instead of having to wear herself out before retirement age?
Any thoughts gratefully received.
Thanks.

Keep_pedalling

Sounds like she has an interest only mortgage, What is the interest rate on that?

Sunday_Girl_2

It is an 'Off Set' Mortgage. Not sure what the interest rate is / was.
Not sure what difference the Interest Rate would make? Could you advise? Thanks.

Al.

Sunday_Girl wrote: »

Hello, hope someone can help...
Lost my Dad recently, and my Mum's got 200k to invest - Early pension payout etc.
She's 56, just about to go back to Full-Time work, but will need 90k in 7 years to finish paying off the mortgage.
Are there any investments she could make to live on instead of having to wear herself out before retirement age?
Any thoughts gratefully received.
Thanks.

Why wouldn't your mum pay off the mortgage now - redemption penalties?

If she's 56, I wouldn't fixate so much on the investments - consider the 'wrapper'. In this instance, if she wants money to live on, i.e. an income stream, and if she has just started back to work, investing via a pension 'wrapper' (again, that word!) may be an idea. She's still a spring chicken, making £110/200k last thirty years isn't impossible, but has she any expectations of what she needs or what she requires the money to make for her?

Sunday_Girl_2

Pay off mortgage now - Interest Rates so low at the moment, seemed more sense to delay paying off now as may / might have needed to live on / make repairs.
Pension Investment - bit of a sore point... My Dad didn't make it to 61 - and had fully paid up into National Insurance - so didn't get to feel the full benefit of his contributions all those years.
My Mum knows she should be trying to plan ahead for her retirement (in 2027!) but I would be happier if she had a slightly 'easier' life - and didn't have to work so hard.
No specific need or requirement to make a fixed amount of money - but would be nice to think 200k could give her the best kind of financial return - with no risk. Would like her to have no worries about building maintenance, or possible home improvements. If she decides to move, could pay off the mortgage outstanding (90k) then?
BTW, have heard the term 'wrapper' before. What exactly does it mean? I assume, as a wrapper, it 'contains' something? Thanks for your help...

Sunday_Girl_2

BTW... Bank has been NO help at all. Don't want to give advice - just when my Mum needs it the most. Hence my enquiry here. Thanks.

Anonymous101

Sunday_Girl wrote: »

BTW... Bank has been NO help at all. Don't want to give advice - just when my Mum needs it the most. Hence my enquiry here. Thanks.

In my experience Banks don't want to help. They're just there to make money by selling you products.

Al.

Sunday_Girl wrote: »

Pay off mortgage now - Interest Rates so low at the moment, seemed more sense to delay paying off now as may / might have needed to live on / make repairs.
Pension Investment - bit of a sore point... My Dad didn't make it to 61 - and had fully paid up into National Insurance - so didn't get to feel the full benefit of his contributions all those years.
My Mum knows she should be trying to plan ahead for her retirement (in 2027!) but I would be happier if she had a slightly 'easier' life - and didn't have to work so hard.
No specific need or requirement to make a fixed amount of money - but would be nice to think 200k could give her the best kind of financial return - with no risk. Would like her to have no worries about building maintenance, or possible home improvements. If she decides to move, could pay off the mortgage outstanding (90k) then?
BTW, have heard the term 'wrapper' before. What exactly does it mean? I assume, as a wrapper, it 'contains' something? Thanks for your help...

Sometimes, peace of mind by owning your own home is priceless, and worth more than the expectation of making a few quid more (by investing). My advice would be to consider securing your mum's home first - it's a trade off between the cost of a course of action, versus the intangible value of it. If you were fixed/low/repayment for the duration, there'd be a more plausible case to continue as is, IMHO.

I can understand completely your point about longevity, but don't underestimate how long your mum might live for. You all had a horrible shock with your dad, but statistically, his death should not dictate best principles/best practice. Would not having a mortgage make things easier, emotionally at least?

A wrapper is the tax treatment you 'wrap' around money. Your wrapper could be an ISA, pension, investment bond etc. They all have unique characteristics and all have pros and cons in differing amounts to different clients. A pension, for instance, gives you tax relief (aka 'free' government money) going in, but is subject to tax when you draw it out.

If your mum is still numb, best to do nothing that can't be unwound. She might, for instance, really enjoy work - she might hate it. Your last point, 'no risk' is telling. You are understandably in shock, but if you want no risk, then there's definitely no merit in not considering paying off the mortgage as your money will make nothing for you, languishing in the bank. Bear in mind too, your mum has got to make the money last an appreciable term. That might involve engaging in some risk.

Difficult at the moment, I accept completely.

Al.

Sunday_Girl wrote: »

BTW... Bank has been NO help at all. Don't want to give advice - just when my Mum needs it the most. Hence my enquiry here. Thanks.

We should rename banks, 'money shops'. Maybe we'd better understand the modern nature of them.

Sunday_Girl_2

Thanks Al. Your thoughts are much appreciated.
Still not sure what to do now. Feel a sense of 'panic' coming on now - this Tax Year is drawing to a close - has my Mum missed the ISA Boat for this year? And anyway, are ISAs the best investment? Heard the interest rate isn't great - maybe better off changing to a Savings Account?
Not sure I am confident in helping my Mum find the best Investments - as you say, the money's not making anything languishing in the bank..
Work is a necessary evil - my Mum feels it will give her some kind of routine, but would happily do without it. Best to stick with the devil you know!
Thanks again for your help.

Sunday_Girl_2

BTW - renaming Banks 'Money Shops'...
Still wouldn't be right... In a shop you usually get helpful advice with which items to buy...
Not my Mum's experience in her local 'Money Shop'... That is if you can force them into giving you a face-to-face appointment. She feels very badly let down in her 'hour of need'.