Reinvest parents money with power of atourney

Janie2008

jonrock said:

Here's my dilemma.
I have a lump sum to invest for my Mum. 
I have LPA in place and she doesn't have the capacity to make financial decisions.
It seems much more practical to invest the money in my name in regards to dealing with the account online etc.
Am I doing anything wrong by doing that? Something like the NS&I Growth bond fixed.
I'm currently arranging an annuity to cover care costs till end of life so I will be investing what is left.
If it is under me then the interest will be seen as taxable? My Mother also has an ISA so its a little hard to
know which way to go regarding tax allowances.
Regards

You can't invest in your name as it's her money. 

elsien

Putting the money in your name is not an option. Whatever accounts or investments you use need be in her name using your power-of-attorney.
putting it in your name, makes it legally yours. Safeguarding queries aside if you’re hit by a bus tomorrow that money forms part of your estate.

Janie2008

You could consider moving it into a savings account with the same bank. It wouldn't be the best rate but would be better than a current account or a savings account with an established name such as Coventry building society that doesn't have the best rates but would be appropriate and something they might have done.

Linton

As others have said, it would be totally inappropriate to invest mother’s money in your name.  When you are considering doing something as her POA ask yourself how it benefits your mother given her circumstances. If you can’t give a convincing answer doing nothing is fine. Another question to help you make the right decision is what would mother do if she were capable.

xylophone

Am I doing anything wrong by doing that? 

Yes.

Your mother's money should be in an account in her name which you will operate as PoA.

https://www.nsandi.com/help/manage-money-for-others/manage-saving-for-adult#:~:text=of someone else-,Registering your authority with NS&I,us to update your account.

Presumably you have registered the PoA on all her existing accounts.

Has a subscription for the current tax year been made to her ISA? 

Doctor_Who

jonrock said:

Here's my dilemma.
I have a lump sum to invest for my Mum. 
I have LPA in place and she doesn't have the capacity to make financial decisions.
It seems much more practical to invest the money in my name in regards to dealing with the account online etc.
Am I doing anything wrong by doing that? Something like the NS&I Growth bond fixed.
I'm currently arranging an annuity to cover care costs till end of life so I will be investing what is left.
If it is under me then the interest will be seen as taxable? My Mother also has an ISA so its a little hard to
know which way to go regarding tax allowances.
Regards

As above, your mother's money must be in accounts in her name that you manage under the LPA in her best interest (my brother and I were attorneys for our late mother). She will have her own tax allowances (personal allowance, PSA, starter savings rate etc). 

jonrock

Thanks guys really helpful info.
It was just with online accounts these days it makes things a little bit more complicated to set-up and manage.
Unfortunately that great fixed term savings account has ended with NS&I.
There are some other providers but some I've never heard of and it makes me a little twitchy about giving a company I've never heard of a lump sum.
Regards

friolento

jonrock said:

Thanks guys really helpful info.
It was just with online accounts these days it makes things a little bit more complicated to set-up and manage.
Unfortunately that great fixed term savings account has ended with NS&I.
There are some other providers but some I've never heard of and it makes me a little twitchy about giving a company I've never heard of a lump sum.
Regards

All the savings accounts listed on MSE are FSCS protected, up to £85k per person. However, not all savings accounts can be opened with a POA. Have a read through this 🧵 https://forums.moneysavingexpert.com/discussion/6382232/opening-savings-account-with-power-of-attorney

cwep2

Using existing accounts/providers is simplest as they already have a relationship.

One suggestion - depending on the parent's tax situation - is to add money to the ISA and put it in a money market fund - this is extremely safe and is similar to a savings account in terms of risk, and you can sell units any time. There are many which track the SONIA rate (currently 5.18% so about 0.07% below BOE Bank rate - and this difference is pretty constant, say between 0.05 and 0.09% below for the last couple of years). Now 1. this is about the same as the best easy access rates right now, 2. in an ISA it's tax free so even at basic rate of tax on interest assuming £1000 allowance used up) it is better return than the NS&I bond. There is lots of info on these boards about MMFs.

I used this for my Father (for whom I have POA) as he would pay tax anyway. I do keep some in an instant access account (in his name) with Saga which I convinced him to and helped him open before he lost competence to manage his own money for any short term needs. He already had an ISA (actually 3 separate providers) and was a keen investor in his day, so I have largely kept most existing funds invested as they were, consolidated the three providers to one to reduce monthly fees, and put his £20k pa into these into MMFs to reduce his tax bill.

Vortigern

jonrock said:

Thanks guys really helpful info.
It was just with online accounts these days it makes things a little bit more complicated to set-up and manage.
Unfortunately that great fixed term savings account has ended with NS&I.
There are some other providers but some I've never heard of and it makes me a little twitchy about giving a company I've never heard of a lump sum.
Regards

If you still wish to use NS&I, I'd suggest you first open an account for yourself, online, using a minimal amount of your own money. You can then open an NS&I  account for your mum, by post, using your PoA.

You'll find that you can access both your own and your mum's account through the same login.