72 yr old with £20k to invest

He-man_2

Hi 

My mum has around £20k to invest, leftover from a pension. She’s 72 years old with a modest pension income of around £22k a year but with no mortgage etc. She has a small cash pot but lives a fairly frugal lifestyle. She doesn’t envisage needing the money for anything in a few years but I’m wondering where would be the best place to put it and what sort of find to go do. I was thinking an income fund or one of the pre packages funds but low risk. Any thoughts or things I should be considering particularly?

thanks I’m advance! 

Robin9

£20k if she can 5% is £1k but she'll be lucky to get 1-2%

She may do better investing in her house to reduce her running costs and preparation for her future years -  insulation, bathroom facilities 

Daliah

She should not be considering any investment if neither she nor you have experience in investments. She should keep her money in savings. If I were her, I would put the lot into Premium Bonds and dream of a big win which probably won't materialise but at least she still has her cash

Premium Bonds are a safe place for a 72-year old to park £20K in, particularly if £20K is essentially her emergency fund (e.g.how would she pay if the boiler or washing machine packs up, new bed needed, roof leaks etc etc). 

Daliah

To add, I wouldn't recommend investing the £20K, if it's the totality of savings, for anyone, regardless of age

He-man_2

Daliah said:

She should not be considering any investment if neither she nor you have experience in investments. She should keep her money in savings. If I were her, I would put the lot into Premium Bonds and dream of a big win which probably won't materialise but at least she still has her cash

Premium Bonds are a safe place for a 72-year old to park £20K in, particularly if £20K is essentially her emergency fund (e.g.how would she pay if the boiler or washing machine packs up, new bed needed, roof leaks etc etc). 

Thank you. She has around £20k spread across easy access and a couple of fixes for emergencies. I definitely wouldn’t park it in premium bonds as aside from the fscs protection I don’t see really the benefit given the odds of winning big. Thanks though 

Daliah

He-man_2 said:

Daliah said:

She should not be considering any investment if neither she nor you have experience in investments. She should keep her money in savings. If I were her, I would put the lot into Premium Bonds and dream of a big win which probably won't materialise but at least she still has her cash

Premium Bonds are a safe place for a 72-year old to park £20K in, particularly if £20K is essentially her emergency fund (e.g.how would she pay if the boiler or washing machine packs up, new bed needed, roof leaks etc etc). 

Thank you. She has around £20k spread across easy access and a couple of fixes for emergencies. I definitely wouldn’t park it in premium bonds as aside from the fscs protection I don’t see really the benefit given the odds of winning big. Thanks though 

Money in PBs is as safe as in FSCS protected accounts, and the returns are unlikely to be worse than those from instant access accounts. I would recommend you read up about Premium Bonds on the MSE website, and on the MSE Forum.

masonic

Low risk in the current climate is unlikely to return more than cash. Low risk has performed exceptionally well during a period of falling and historically low interest rates, but this cannot continue as the tide turns. If she has essentially a year's expenditure saved up before this money, then investing it could be appropriate, but she'd need to commit to putting it away for more than just a few years. Spending some of it on home improvements would seem like an investment option to prioritise. While it might be difficult to get out of a (presumably) life-long habit of frugality, she may be in a better position now to enjoy the money than in the future.

He-man_2

Daliah said:

He-man_2 said:

Daliah said:

She should not be considering any investment if neither she nor you have experience in investments. She should keep her money in savings. If I were her, I would put the lot into Premium Bonds and dream of a big win which probably won't materialise but at least she still has her cash

Premium Bonds are a safe place for a 72-year old to park £20K in, particularly if £20K is essentially her emergency fund (e.g.how would she pay if the boiler or washing machine packs up, new bed needed, roof leaks etc etc). 

Thank you. She has around £20k spread across easy access and a couple of fixes for emergencies. I definitely wouldn’t park it in premium bonds as aside from the fscs protection I don’t see really the benefit given the odds of winning big. Thanks though 

Money in PBs is as safe as in FSCS protected accounts, and the returns are unlikely to be worse than those from instant access accounts. I would recommend you read up about Premium Bonds on the MSE website, and on the MSE Forum.

Yes I said aside from the protection you get. As as she’s not anywhere near £85k with any one institution the safety aspect of premium bonds is pretty irrelevant to us the premium bonds rate is at 1% according to mse which we could beat in a one or two year fix. 

He-man_2

masonic said:

Low risk in the current climate is unlikely to return more than cash. Low risk has performed exceptionally well during a period of falling and historically low interest rates, but this cannot continue as the tide turns. If she has essentially a year's expenditure saved up before this money, then investing it could be appropriate, but she'd need to commit to putting it away for more than just a few years. Spending some of it on home improvements would seem like an investment option to prioritise. While it might be difficult to get out of a (presumably) life-long habit of frugality, she may be in a better position now to enjoy the money than in the future.

Thank you that’s very helpful. Have tried to get her to spend it! She might give it to my brother and I instead 🙄

london21

Low risk funds, but is she willing to take risks?

He-man_2

london21 said:

Low risk funds, but is she willing to take risks?

Yes she understands the risks and would be putting it away 3-5 years possibly more depending on needs.