Advice about savings for elderly aunt?

Lancs1961

Hi all,

I'd be very grateful for any advice here.

My aunt has lived frugally for her whole life, and managed to save £60k which she has in a 3 years fixed term ISA with Nationwide.

She had a fall earlier this year and is now going to need to pay for care and a new, more accessible bathroom.

Her ISA doesn't mature until May 2021 but she need to get at the money to pay for the care and the bathroom. Googling suggests to me she can do this by closing the ISA, but will need to pay an early access penalty equivalent to 9 months' interest to do so.

The question is what is best to do with the balance afterwards. She'll be using about 4K for the bathroom, and maybe another £2k for a boiler-related problem, so she'll have about £54k left. After that she'll need about £350pw for care. She has a pension but it only brings in about £1,000pm. We've applied for Attendance Allowance for her, but if she gets it it's only going to be the lower rate i.e. about £58 pw. She will therefore continue to need to dip into her savings while she continues to need care, which could be forever (she's now 86).

Is it best to put it in another ISA but one where she can have ready access to it as she needs it, or would it be better to put it in some other kind of savings account? My family have zero knowledge about these things, but we'd like to advise her about the best way forwards. She's going to try to close the ISA next weekend, and so we'll need to know pretty quickly what she should do with the balance.

Any advice very gratefully received.

Albermarle

Presuming that she will want to keep the money in a savings account , as opposed to investing it in stock market related products ?
In that case she probably does not need to save in an ISA anymore as nowadays you can earn quite a lot interest tax free anyway. A normal savings account will tend to pay a better rate of interest and of course if it is a fixed term one it pays a bit more .

My family have zero knowledge about these things,

As you probably realise this makes your family vulnerable to making bad decisions about financial matters and I suggest you start to remedy this asap .
Here are some links to reputable websites ( like this one and government backed ones ) to get started.
https://www.moneysavingexpert.com/banking-variant/
https://www.moneyadviceservice.org.uk/en

DiggerUK

You seem to be saying that your Aunt needs £6k, + ongoing care expenses. Why not take outa 0% deal on a credit card that needs clearing shortly after May 2021. Could she arrange a loan that can be cleared post May 2021.

You say she has pension income. Have you visited one of the charities or council agencies who advise on elderly benefits. Does she have assets that can be liquidated.

All in all I feel that you should do all you can to buy time to get you through till May 2021, it'll give you time to sort things out. Best of fortune..._

xylophone

https://www.ageuk.org.uk/information-advice/care/paying-for-care/paying-for-homecare/


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



She might consider holding enough for the renovations/boiler/ one year's fees in an instant access account, and perhaps have a look at term accounts for the balance?

Malthusian

Does she have Lasting Powers of Attorney in place?

I don't really see the point in tying funds up in her situation for an extra % of interest given that her care needs could increase without warning. Unless she insists on eking out every penny.

Bobziz

Have you contacted the LA re disability aids and home adaptations? They can provide up to £1000 worth of kit for free. Ramps, hand rail, grab bars etc.

Katiehound

Is it possible to remove a part of the ISA without closing it down completely?

badger09

Katiehound wrote: »

Is it possible to remove a part of the ISA without closing it down completely?

Obviously, that depends on the T&Cs of the specific FR ISA held by OP's aunt, but, in common with most FR ISAs, Nationwide's current offering does not allow partial withdrawal. Closure, with penalty, is the only option.

Lancs1961

Many thanks, all - I'm very grateful for advice and will follow all links.

We've applied for Lasting Power of Attorney, but aunt still has capacity and so it will be her decision. We just hope to be able to gather some information and advise her.

The LA have installed quite a lot of adaptations in my aunt's house, and other than the bathroom there isn't really anything else we can think of that might help.

I'm not sure whether she'd qualify for a loan or a credit card, but I do know that she wouldn't want to go down those routes even if they were the best option. She's elderly and very risk-averse, and would not be able to see either of those routes as anything other than risky.

I'll go away now and read through all of those links. Again, thank you, and I'll definitely be taking the advice to learn about finance.