Savings account for 90 year old

Eliza_2

Afternoon all

My mother in law is selling her house and moving to private sheltered accommodation. When the house is sold she will have just under £500k and is wondering what to do with it. Her income from pensions is about £2k a month, more than enough for her rent and other expenses, in fact her current account will grow bit by bit once her moving expenses are paid but she's planning holidays etc with it. Obviously her accomm is self financed.

She wants to give some of the house proceeds to family, kids, grand and great grand -kids as cash gifts and then just stick the rest in a savings account to await the need for nursing home fees if/when it comes to it. We reckon she'd need £50k a year for that eventuality (straight care home about £35k) and the chances of her needing 10 years worth of nursing home care are fairly unlikely despite being in rude health at the moment. So 2 questions:

1 How much to reasonably give away yet retain enough for her own future care needs? - she intends to fully self finance so no state help required. Maybe retain 7 years nursing home money and give the rest to family? 8 years? How on earth do you predict this?

2 Can anyone advise where best to stash this cash? She doesn't want to actively manage anything apart from the spending of it! There'll be no eventual iht liability I believe at the moment as her threshold is £650k to include her late husbands part. She'd rather just shove it into a savings account, paying max interest, min tax and easy speedy access. Or as near as poss.

Anything else she needs to think about? Tax for herself or recipients?

Thank you for any advice.

xylophone

She could hold the lot in NS&I income bonds.

https://www.nsandi.com/our-products

Otherwise she can spread it about.

http://www.thisismoney.co.uk/money/article-1583859/Best-savings-rates-General-savings-Internet-branch.html

With regard to care home fees, I have known three people who went into care homes at 90+ and were there for far longer than the average two years often cited.

One of those people is currently paying fees in excess of £60,000 a year.

It may be best not to make over generous gifts.

trailingspouse

She should hang on to her money. It's lovely of her to offer gifts to the family, but the family need to be sensible enough to say Thanks but no thanks.

Being brutal - if she dies in the near future, you'll all get your money soon enough. If she lives a long time, she'll need the money.

ChesterDog

She can and should avoid completely the quandary of how much she can safely give away, by keeping it all.

The financial security she currently has is in itself of huge psychological (and real) benefit, not just to herself but also to her family.

If she really wants to do so, she should give away some small, token sum and leave it at that.

Nobody knows what they will need in the future, and for how long. Even - and perhaps especially - at ninety years old.

Eliza_2

Thanks all. That's fine, the family doesn't need the money, she would just like to give some away as she feels it's family money not hers and she likes to be in a position to help, what with great-grandchildren off to University etc. We have been trying to persuade her to keep it all so will keep arguing thus.

That being so, where would it be best for her to keep it? In a normal savings account, in the NS&I bonds as previously advised? Any other thoughts? It's well above the bank protection limit though she would like it all in one place to limit the paperwork as much as anything.

She is fretting about this a bit so it would be good to help her, fretting isn't needed at that age! (well, fretting about money isn't needed at any age!)

Eliza_2

I've just looked up info about the NS&I income bonds and it says they're not suitable for people who want the interest to increase the value of the investment but are for those who want to take it as monthly income. She doesn't need income so this doesn't sound quite the thing. Thanks

ColdIron

NS&I Income Bonds at 0.75% pay the interest to her bank account monthly so she could use it to supplement her spending. Alternatively there is the NS&I Direct Saver which has a slightly lower rate of interest of 0.70% but keeps it in the account. The good thing about the NS&I accounts is that you can put it all in one place as it is totally secure but at the cost of lower interest. You can get better than 1% (see post #2) but will have to spread it around several accounts

Zanderman

Eliza wrote: »

I've just looked up info about the NS&I income bonds and it says they're not suitable for people who want the interest to increase the value of the investment but are for those who want to take it as monthly income. She doesn't need income so this doesn't sound quite the thing. Thanks

Don't go for NS&I Income Bonds then, go for another NS&I product, like their simple direct savings account https://www.nsandi.com/direct-saver That's just a savings account, easy access (though online) and a similar interest rate to the bonds. Not quite sure why income bonds were suggested.

Archi_Bald

She could also put £50K into NS&I Premium Bonds

Archi_Bald

Eliza wrote: »

I've just looked up info about the NS&I income bonds and it says they're not suitable for people who want the interest to increase the value of the investment but are for those who want to take it as monthly income. She doesn't need income so this doesn't sound quite the thing. Thanks

That sounds irrelevant. She doesn't have to take the monthly income - she can just leave the money sit there if she doesn't need it.

xylophone

She could have both the income bonds and the direct saver and give instructions for the interest to be paid into the direct saver.

https://www.nsandi.com/files/published_files/asset/pdf/income-bonds-application-form.pdf

Once the accounts are set up she can just leave them alone if that is what she wants.