Best way to invest £350K

mikeopvc

Just after some advice here please.

My mother has been awarded £350k compensation for a medical negligence claim and I would like to help her use it in the best way possible.
She got a cheque yesterday for £250k and the solicitor will release the remaining £100k once the legal aid has been sorted, the £250k has been deposited into the local Santander branch and they have scheduled a meeting for her to speak to someone in 4 weeks.
I'm sure the bank has her best interests at heart as well as their own but in the meantime I would like to get some other suggestions to put to her before she goes into the bank meeting.
I have asked her to arrange a meeting for myself and my 2 sisters to sit down and have a chat next week.

She currently lives in a housing association for the elderly and loves it there as she feels part of a little community, so will continue to live there but will now have to pay the rent instead of claiming it.

I don't know what the bank will be suggesting but I would like her to invest in property, admittedly I'm a little biased with this suggestion as I am a builder so would like to oversee any property projects that she does undertake. She is open to suggestions as she hasn't a clue herself what to do, I don't know what my sisters will be suggesting but I think the meeting will be interesting to say the least,

Any thoughts, opinions welcome,

Thanks in advance.

slopemaster

"I'm sure the bank has her best interests at heart as well as their own"
:rotfl::rotfl::rotfl:

I think your idea of a family conference is a good one, but the idea of going in to see the bank less so.

What is appropriate for your ma will partly depend on her age and state of health - you mention 'housing for the elderly'... Depends on how willing she is to actively manage an investment like property, or whether she is happy for you to manage it for her.

Sounds like she has no pension, as you also mention benefits..... I wonder about a pension or some sort of guaranteed annuity?
And there are investments which will cover any future care home costs, but I don't know much about how they work.

This sounds to me like a case where it would be worth PAYING to see a proper INDEPENDnt financial advisor, rather than the bank's one. Some expert advice about these issues could be very valuable.
BUT, she does not have to take this advice.

I am like you, I wd put it in property - and for some reason, no financial advisor ever suggests that! But nevertheless, I think she/you need to understand the other options

AnotherJoe

Forget Santander. See an IFA, as said, pay for one.

Does she need that hassle of property unless you take it all over for her?

xylophone

https://societyoflaterlifeadvisers.co.uk/ Might be of interest.

If she requires advice, it would be advisable to consult an IFA rather than a bank.

It seems that your mother has secure accommodation and a modest pension income - she seems to receive housing benefit - does she also receive Pension Credit?

She should advise change of circumstances where required.

mikeopvc

I agree the bank meeting is not a good idea, this is why I want to get suggestions to put to her first then hopefully she'll agree to cancel the meeting at the bank.
It's obvious that when she went into the bank yesterday with the cheque they just brainwashed her into believing that they are the best people to advise her on what to do with all that money, I've already explained to her that it isn't wise to keep it all in one bank as she's only covered for £75K if something goes wrong.

She was on DLA lower rate mobility and also housing benefit but she has been told that she will no longer receive any of these, she will have to pay the rent herself and live off her own cash, this is why I want her to put the money to good use and actually have a bit of income instead of just spending it.
She actually was awarded almost £400k but has had nearly £40k deducted by the department of work and pensions to pay back the benefits she has claimed while the case was ongoing.

I will look into getting in touch with an IFA

I am more than happy to manage any property investments for her, and am sure my sisters will be able to contribute also.

bostonerimus

How old is your mother? and how much annual income does she need to generate. Is the goal to leave a substantial inheritance?

I don't think that hassle of property and and locking up capital in bricks and mortar is necessarily a good thing when you are older.

xylophone

She was on DLA lower rate mobility

I had thought that DLA was not means tested - have you checked?

mikeopvc

bostonerimus wrote: »

How old is your mother? and how much annual income does she need to generate. Is the goal to leave a substantial inheritance?

I don't think that hassle of property and and locking up capital in bricks and mortar is necessarily a good thing when you are older.

My mother is mid 60's, she doesn't need to generate a massive amount of income, she does want to make sure we are all financially stable both now and after her passing. She said the first thing she is going to purchase is her funeral so we wouldn't need to worry:(
I said jeez mum you're only in your 60's why the heck are you worrying about things like that? Bless her:o

I'm thinking if she was to purchase a property that needed refurbishing I could do the work for her and she would benefit from the profit, even if it was only a few grand then at least it would cover her annual rent charges, She wouldn't need to tie it all up in bricks and mortar as there are a lot of properties out there for £100k - £120k which could turn a profit with a £10k - £20k investment. I figured just one per year would be a reasonable target and she'd still have well over £100k to put in banks, ISAS etc.

Can anyone advise what amount of profit she could make per year before having to pay capital gains tax etc. as this is sure to be one of the questions raised by one of my sisters?

Thanks

mikeopvc

xylophone wrote: »

I had thought that DLA was not means tested - have you checked?

I will check that out, thank you.

I do think it's a bit unfair that she has to repay the benefits that she received because at the time of claiming she was actually entitled to them, she was broke and unable to work through no fault of her own.
It's like giving someone on the dole their JSA for years then telling them they have to pay it back when they get a job!

xylophone

https://www.gov.uk/government/publications/compensation-social-security-benefits-and-lump-sum-payments-technical-guide/compensation-social-security-benefits-and-lump-sum-payments-technical-guide-html-version

The above may throw some light.

slopemaster

She can make 11300 capital gain each year, on top of her income, before paying any tax. But she can't do this doing-houses-up and selling them thing too many times, because the Revenue will then say she is trading in property, and tax it as all income instead. Especially as she would not be living in it at any point.

What she could do is buy a property, you do it up for her, then she lets it out. This way she has an income, and also an asset which should always keep pace with inflation. (Unlike money in savings accounts etc.)