Trying to sort out parent's finances - for retirement

pin

Very old time poster, no longer live in the UK, but very very occasionally visit these boards.

My parents are now in their mid 60s and I am trying to get a head round their finances. At the moment they are reasonably fit and healthy and my dad works part time, my mum doesn't work.

Their expenses are minimal, their mortgage has been paid off and they have no dependents anymore. From a day to day perspective they can rely on my dad (at the moment). They don't have any liabilities.

I reckon my dad has about 5 years before he will have to stop working. Other income is my mum's pension (don't know amount) and rental income from student properties (again, don't know amount).

From what I understand their assets (apart from their house) are as follows:

- 2 student properties (fully paid) about GBP350k
- Premium bonds about GBP80k
- One life endowment policy value of about GBP150k of which the term will be available shortly
- Cash in bank about GBP10k

They are very risk averse and haven't really invested (beyond the two student properties, which they are getting back something like 10% off their initial investment, still trying to find out from them what their yearly income is after costs). In addition they have no ISAs.

I have been for years and years trying to get them off the premium bonds, but my mum is resisting strongly saying she keeps on "winning" GBP50 every so often.

I managed to get them to put away GPB6k in some vanguard funds (Retirement 2025 and LS40).

I am keen on them cashing out their premium bonds and putting it all in the two Vanguard funds and also when the life endowment is available, also putting that in the vanguard funds. Am wondering though, should the be putting money in the Retirement 2025 and LS20 or just one or the other?

Any other thoughts / suggestions / observations would be very welcome.

Thanks!

Audaxer

As they appear to be happy to keep their money in Premium Bonds and seem to be quite well off, and clearly risk averse and not comfortable with investing further in Vanguard or any other investments, I'm not sure that you should keep trying to persuade them to do something they are not comfortable with. Their risk tolerance is different to yours.

Linton

As Audaxer says. 60 isnt normally old these days so unless there are factors you havent divulged they should be perfectly capable of running their own lives. If they arent, they can ask for help.

I think you should keep out of your parent's financial affairs unless asked.

ColdIron

If these were my parents who were very risk averse and had been strongly resisting my suggestions I'd leave them alone, they seem to know their business. Have they asked for your help?

Alexland

Sure its not going to generate a great return but if they are happy....

pin

Thanks all. Just to clarify, my parents have asked me to see if they can do something better with the money, so I'm not trying to butt in where my business does not belong.

Linton

pin wrote: »

Thanks all. Just to clarify, my parents have asked me to see if they can do something better with the money, so I'm not trying to butt in where my business does not belong.

OK it seems reasonable to explain the options dispassionately but I think you should leave the choice to them rather than try to persuade them in any particular direction.

Dazed_and_confused

They do seem to have a very strange mix of assets for people who are "very risk averse"

Premium bonds = makes sense
Vanguard funds = do they understand a portion could (probably won't but could) simply disappear overnight
Student flats = clearly my risk averse is on a different scale to your parent!

Bit confused as to why you provided a list of assets and then mentioned vanguard separately?

bigadaj

pin wrote: »

Thanks all. Just to clarify, my parents have asked me to see if they can do something better with the money, so I'm not trying to butt in where my business does not belong.

No one knows, but given current market levels then now may well not be the best time to put a lump sum into equity investment. And personally I think bonds may be worse, I have a significant amount in premium bonds because it is government backed and whilst returns are low there won't be capital losses which is eminently possible with both gilts and other bonds.

xylophone

Your parents might wish to consult an Independent Financial Adviser.

https://societyoflaterlifeadvisers.co.uk/

https://directory.moneyadviceservice.org.uk/en


https://www.unbiased.co.uk/financial-adviser/ifa-qualifications

Have they both made wills?

pin

Thanks all

Student flats were a punt, they "wanted to do something with their money". They seem to be doing well out of it.

I guess I'll probably suggest they leave things where they are at this stage in that case.

Yes, wills have been written.