Advice wanted please re investment for elderly mother

welshyyyyy_2

Hi, I'm not after free financial advice so much as just someone to confirm what I'm thinking of doing is okay or not ..so comments welcome please. Due to me having had some particularly bad advice from a so called "financial advisor" in the past I am somewhat wary of them, hence hoping for more impartial advice here (and having some excellent advice on here in the past)

The situation is that my mother (who is 82) was widowed last year and there are two children, myself and my sister (in our fifties and both financially solvent with no desire to have anything to do with this money)
My mother has some investments that my father set up many years ago but she has no idea about finances so has asked me to look into them - she has some money in ISA's and some money in a couple of investment bonds. She has no mortgage and no debts
The query is regarding one investment bond, it is currently worth approx £80,000 but being unit linked it obviously goes up and down, at the moment it is doing quite well but at her age she doesn't want any risk at all, and in the past few months it has gne down a couple of thousand (but has recovered recently) and she would rather the lump sum be safe rather than earn any more interest (if there's a risk that it could do down, and the potential of it falling a lot e.g. Brexit) so there are maybe a couple of options that I'm thinking of

1: I need to contact the company to check that any surrender value wont be subject to any MVR (market value reduction) as it says in their literature

Assuming that the full amount could be cashed in, that then leads on to where it could be safely invested. As I said my mother doesn't want any risk at all to the capital (and doesn't need an income from it either as she has a small pension which is sufficient)

So....
1: should I ask the company whether we can move the full amount into a different account e.g. one that isn't unit linked (do such "bonds" exist)?

2: We could take out £50,000 of this and put it into Premium Bonds (which would give the no risk that she is looking for) and the potential of a small amount of "interest" each month (I know Premium Bonds are often frowned upon but would I think serve a purpose in this case)

This then leads to the other £30,000, are there any other "safe" places to invest it (at minimal interest), as safety is the main requirement?

I'm not sure whether this is enough information to make any informed decisions but really I suppose what I'm asking is would taking the money out of the bond and putting it into premium bonds be sensible and also as this is withdrawing a long term investment would there be any tax implications for my mother (standard rate taxpayer) or would it just be seen as just "moving" her money from one place to another ?

Grateful for any advice
Thanks

A_T

NS&I offer products other than Premium Bonds - all equally safe.

welshyyyyy_2

just looking at those now, thanks

Tom99

Usually online savings accounts give better interest and you can always 'help' your mother set one up.
I also found being a joint account holder on my mother's current account useful from doing her shopping to getting the best deals on utilities etc. Less faff than using a LPA but you should have those in place as well in case they are needed.

AnotherJoe

Without getting into educating your mother on what "safe" means, since this approach will undoubtedly lose value through inflation, and looking at things she might think are "safe" steer clear of PBs, you can do better
Create a savings ladder with most of it and set some regular savers up with the rest.
For example, you put £15k each into a 1,2,3,4 and 5 year fixed term savings "bond".
When the 1 year bond expires put that into a 5 year bond, same for the 2 year etc.
After 6 years you have it all in bonds with the highest interest, 5 years but each year one fifth becomes available to access should it be needed.

This assumes that there's nothing special about what the money is earmarked for and it's there really to be left to teh kids or grandkids and she isn't spending it down. You could also look at changing the term, perhaps only going out to 3 year products if the money might be needed sooner.
Make sure you use actual savings accounts and not these fake savings products advertsied that promise 8% or whatever andnd in actuality are scams or disguised high risk investments. . Anything over about 2.5% will be dubious.

welshyyyyy_2

thanks for the advice, we have just submitted an LPA so that will be in place in a few weeks time

re the savings, its not earmarked for anything special, its there for my mum and any potential future care needs

i'll look into those stepped savings bonds, thank you both

AnotherJoe

BTW, by "bond" i mean any fixed term savings account. Could be an Atom 1,2,3 year fixed accounts for example, or anyone else that does them. It doesn't have to be called a "bond".
They dont even have to be with the same organization, pick whichever gives highest rates for those durations.

Robin9

Other than money does she need to invest in her home ? Downstairs bathroom, stair hand rails .................. ?

xylophone

You can check savings rates here

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